Report Producer:The first of its kind**
The following is an excerpt from the original report.
1 The overshoot of new starts is obvious, and the intensity of inventory reduction is higher than that of the previous cycle.
1.1 Inventories are declining rapidly, and new starts are falling significantly.
Residential new starts are over-falling and below '07 levels. 23 years ago, in October, the cumulative new construction of residential buildings was 5800 million cubic meters, down 236%。Assuming a consistent growth rate for the whole year, it is expected that the area of new residential starts for the whole year of '23 will be 6700 million cubic meters, below the level of '07. At present, real estate companies are mainly based on the strategy of sales and production, the overall sales downturn and poor financing, the total transaction volume of the land market has not yet recovered, and it is expected that it will be difficult to significantly improve the new construction in 24 years.
The magnitude and intensity of the inventory decline were higher than those of the previous cycle. As of 10/23, the total residential inventory area was 210.9 billion cubic meters, down 58.4 billion cubic meters, a decrease higher than the 44.1 billion cubic meters. At present, the land market has not recovered significantly, and there is still a 3 to 6-month cycle from land acquisition to construction, and it is expected that the inventory will continue to decline in 24 years. In terms of the removal rate, the area of residential sales in October 23 was -15 year-on-year7%, assuming that the annual growth rate remains unchanged, is expected to have an overall decontamination rate of 44% in 23 years, which is lower than the low point of the previous cycle as a whole.
1.2 Real estate companies continued to shrink their balance sheets, and the debt ratio fell rapidly.
The gearing ratio has rapidly fallen to 15 years. Over the past 23 years, the overall asset-liability ratio of the sector has accelerated to 768%, close to 2015 levels, and the starting point of the last cycle of leverage. The asset-liability ratio risk of the sector has been reduced, but the current asset quality has declined and the ability to decentralize has declined, resulting in liquidity risks that are difficult to resolve.
The debt side drives the investment side, and real estate companies accelerate the shrinkage of their balance sheets. The development model is mainly debt-driven assets. Since the 18-year macro deleveraging cycle, the growth rate of interest-bearing liabilities and total assets of the sector has slowed down in the same direction as a whole. The growth rate of interest-bearing liabilities in Q1 of '21 turned negative year-on-year, and the year-on-year growth rate of total assets in Q2 of '22 turned negative. The sharp decline in land acquisition by real estate companies and the decline in the intensity of construction under construction have led to a rapid decline in inventory growth. The entire sector has accelerated its balance sheet shrinkage, and the intensity of supply side has increased.
The gross profit margin is still in the bottoming stage, and the unit sales expenses are at a high level. In Q3'23, the gross profit margin of the overall sector fell to a new low of 175%, the downward trend has slowed down and is still in the bottoming stage. **The gradual settlement of land and the acquisition of land in the second half of 21 have not yet been settled, and the bottom range of gross margin will continue. The sales expenses of unit cash inflows increased, and real estate companies struggled to keep sales receipts. In the context of strong wait-and-see sentiment and de-escalation pressure, real estate companies choose to increase sales investment, including channel applications, sales discounts, and the growth rate of gifts.
1.3 The sales of the top 100 remained stable in the fourth quarter, and the advantages of high-credit real estate enterprises were ahead.
According to CRIC data, from January to November 2023, the full-caliber sales amount of the top 100 real estate companies was 5,528.8 billion yuan, a cumulative year-on-year increase of 155%；In a single month, the monthly sales of the top 100 real estate companies in November were 428.5 billion yuan, -30% year-on-year and -3% month-on-month4%。The sales of the top 100 were flat month-on-month, due to the end of August and September** and the concentrated release of high-energy city policies. The number of second-hand housing listings continued to surge, housing prices have been loosened, and the time for policy fulfillment has been shortened. We expect the real estate market to show a trend of high in the front, low in the middle and stable in the whole year.
From January to November 2023, the cumulative sales amount of the TOP10, TOP11-20, TOP21-30, TOP31-50, and TOP51-100 real estate enterprises from January to November 2023 was -10% and -13% year-on-year, respectively1%、-16.9%、-23.9%、-23.4%。From January to November 2023, the cumulative sales area of TOP10, TOP11-20, TOP21-30, TOP31-50, and TOP51-100 real estate enterprises was -197%、-23.2%、-32.2%、-30.4%、-22.6%。In terms of equity ratio, the top 10, top 11-20, top 21-30, top 31-50, and top 51-100 real estate companies are. 5%。The decline in the sales amount of the top 50 real estate enterprises was significantly smaller than the decline in sales area, and the proportion of sales in the core cities of the leading real estate enterprises increased, driving the average sales price to increase significantly.
Real estate enterprises show that the credit advantage in the current sales market is greater than the scale advantage. High-credit real estate enterprises have abundant cash flow, continue to obtain high-quality projects, and maintain a leading position in sales growth. The rapid return of cash from high-de-decentralization projects supports the acquisition of new high-quality land reserves, forming a virtuous circle and continuously consolidating the competitive advantage of high-credit real estate enterprises.
The growth rate of China's credit real estate enterprises continued to be weaker than that of the top 100 real estate enterprises. Most medium-credit real estate enterprises have less access to incremental land reserves, which further reduces the total saleable value in 23 years and the proportion of newly opened high-quality projects. The decline in the quality of saleable value has made it difficult for the overall de-conversion rate to recover. We expect the follow-up sales of low- and medium-credit real estate companies to remain under pressure.
Among the high-credit real estate enterprises, the top five full-caliber sales growth rates from January to November 2023 are Yuexiu Real Estate, Huafa Co., Ltd., China Resources Land, C&D Real Estate and China Overseas Real Estate, with a corresponding cumulative year-on-year growth rate of +288%、+18.3%、+13.6%、+13.1% and +109%。In November 2023, the top five full-caliber sales growth rates in a single month were China Resources Land, Shoukai Shares, China Merchants Shekou, Vanke Real Estate and Yuexiu Real Estate, corresponding to a month-on-year increase of +91%、+8.9%、+3.2%、+2.7% and -12%。
1.4. The value of land remained low, and high-credit real estate companies acquired land steadily.
The growth rate of the value of goods remained stable, and the concentration of the TOP10 increased significantly. From January to November 2023, the new land value of the top 100 real estate companies was 2,711.4 billion yuan, a cumulative year-on-year increase of -151%；The amount of new land was 1,300.9 billion yuan, with a cumulative year-on-year increase of -133%；The new land construction area was 108.06 million square meters, with a cumulative year-on-year increase of -99%；The average price of new land was 12,039 yuan, a cumulative year-on-year increase of -38%。
In terms of the threshold for entering the list by amount, the threshold for the top 10 to enter the list from January to November 2023 is 35.2 billion yuan, a year-on-year change of -83%；The threshold for entering the TOP20 list is 13.8 billion yuan, a year-on-year change of -169%；The threshold for entering the TOP30 list is 8.7 billion yuan, a year-on-year change of -279%；The threshold for entering the TOP50 list is 4.7 billion yuan, a year-on-year change of -335%；The threshold for entering the TOP100 list is 2.6 billion yuan, a year-on-year change of -105%。
The proportion of the top 100 real estate companies in the TOP10, TOP11-20, TOP21-30, TOP31-50 and TOP51-100 from January to November 2023 is. 2% and 125%, a change of +8 from the end of 20224%、-0.3%、-1.7%、-2.4% and -4%. Most of the TOP10 are high-credit real estate enterprises with the background of state-owned enterprises. Good credit qualifications and high decentralization attributes of core land projects have helped it continue to increase its share in the land auction market.
High-credit real estate enterprises continue to acquire land. In terms of the amount of land acquired in a single month, the amount of land acquired by high-credit real estate enterprises in a single month in November 2023 was 352200 million yuan, an increase of 19 percent year-on-year400 million yuan;The amount of land acquired by China Credit Real Estate Enterprises in a single month is -7600 million yuan, a year-on-year decrease of 7600 million yuan. In terms of the growth rate of the cumulative amount of land acquisition, the cumulative amount of land acquisition by high-credit real estate enterprises was +09%, and the cumulative amount of land acquired by China Credit Real Estate Enterprises was +8 year-on-year7%。In terms of the proportion of the top 100 land acquisitions, the top 100 high-credit real estate enterprises accounted for 55%, an increase of 7% compared with the whole year of 2022The top 100 credit real estate enterprises accounted for 34%, an increase of 09%。
The investment intensity of high-credit real estate enterprises rebounded in the second half of the year. In terms of investment intensity, the investment intensity of high-credit real estate enterprises from January to November 2023 is 303%, a change of -09%；The investment intensity of China Credit Real Estate Enterprises is 107%, +34%。In terms of overall investment intensity in 22-23, the top five real estate companies are C&D Real Estate, Binjiang Group, Yuexiu Real Estate, Greentown China and China Overseas Real Estate, with % and 34% respectively. The investment intensity of high-credit real estate enterprises ushered in a rebound in the second half of the year, and the investment intensity of medium-credit real estate enterprises increased slightly, but it was still in the low range, and low-credit real estate enterprises were basically cleared in the land market.
2 The peak period of debt repayment has passed, waiting for sales growth to bottom out.
2.1 Sales and financing cash flow remain under pressure.
Sales proceeds are the most sustainable and account for the highest proportion. The largest cash inflow of real estate enterprises on the operating side is sales receipts, and the largest outflow is construction and installation costs. The cash inflow of real estate enterprises is divided into the following categories according to sustainability: the first repayment ability is the operating category, that is, the main income in the future, which is the most sustainable. The second repayment ability is mortgage loans, mainly development loans secured by land, and operating loans secured by commercial assets, which are pledged assets that can generate cash flow in the future. The third repayment capacity is refinancing borrowing, credit debt and trust financing. Fourth, the repayment ability is ** asset, which is not sustainable.
Sales and financing inflows remained negative year-on-year, and the peak debt service period has passed. The overall expectation of the industry is high, driving the local auction market to be hot in the first half of 21. Since Q3 of '21, the single-quarter sales collection and financing inflow have been negative year-on-year, and there has been no significant improvement.
In terms of financing, the cash repayment (borrowing + issuance of bonds) is 094, less than 1 for a long time. Although the debt repayment pressure has eased, the shrinkage of the financing side has led to a net outflow of financing cash flow from the industry as a whole. **It has been proposed many times to optimize the supply-side financing policies of real estate enterprises, as well as the issuance of quantitative financing indicators, and it is expected that the total amount of financing is expected to reach the bottom**. On the repayment side, the debt repayment pressure in 24 years has been greatly reduced, and the monthly debt repayment funds have dropped to 23 billion.
End of excerpt from the report For more information, please read the original report
List of topics in the report collection x Regularly compiled and updated by [Report School].
(Special note: This article ** is public information, the excerpt is for reference only, does not constitute any investment advice, if you need to use, please refer to the original report.) ）
Finance Real estate
Fintech |Consumer Finance |Financial Inclusion |Green Finance |Auto Finance |Real Estate Finance |Chain Finance |Finance IT |Banking |City Commercial Bank |Banking & Finance |Distressed Assets |Real Estate |Shanghai Real Estate |Guangzhou Real Estate |Beijing Real Estate |Tianjin Real Estate |Hangzhou Real Estate |Changsha Real Estate |Qingdao Real Estate |Commercial Real Estate |Office Building |Financial Leasing |