Core Viewpoint - The real estate sector has emerged as a new focus for market speculation, with significant gains in real estate ETFs, indicating a shift in investor interest towards this industry [1][3]. Group 1: ETF Performance - The real estate ETF fund (515060) and real estate ETF (512200) both saw half-day increases of 1.72% and 1.7% respectively, leading the market [1][3]. - The real estate ETF (512200) has a large scale of 4.739 billion units, with a half-day trading volume of 161 million yuan, tracking the CSI All Share Real Estate Index [3]. - The real estate ETF (159768) recorded a half-day increase of 0.76%, with a scale of 1.265 billion units and a trading volume of 17.1127 million yuan, tracking the CSI Mainland Real Estate Theme Index [6]. - The real estate ETF (159707) experienced a half-day increase of 0.68%, with a scale of 859 million units and a trading volume of 14.8376 million yuan, tracking the CSI 800 Real Estate Index [9]. Group 2: Market Dynamics - The "de-inventory" strategy in the real estate sector is primarily driven by a reversal in supply-demand dynamics and declining sales data, leading to an oversupply of commercial housing and an extended inventory clearance cycle [3]. - Anticipation of more proactive fiscal and monetary policies, along with new policies aimed at improving housing quality, is expected to further stimulate and release demand for improved housing, supporting stable industry development [3]. Group 3: Major Constituents of Indices - The top five constituents of the CSI All Share Real Estate Index include leading companies such as Poly Developments (10.13% weight), Vanke A (9.17% weight), and China Merchants Shekou (6.43% weight) [4]. - The CSI Mainland Real Estate Theme Index also features major companies like Poly Developments (14.80% weight), Vanke A (14.20% weight), and China Merchants Shekou (14.16% weight) [7][10].

证券研究报告 | 行业周报 gszqdatemark 2025 05 18 年 月 日 房地产开发 2025W20：本周新房成交同比-11.3%，二手房同比+3.7% 行情回顾：本周申万房地产指数累计变动幅度为-0.3%，落后沪深 300 指 数 1.43 个百分点，在 31 个申万一级行业排名第 25 名。 新房：本周 30个城市新房成交面积为195.6万平方米，环比提升29.2%， 同比下降 11.3%，其中样本一线城市的新房成交面积为 60.1 万方，环比 +41.1%，同比+13.8%；样本二线城市为 87.5 万方，环比+25.5%，同比 -28.1%；样本三线城市为 48.0 万方，环比+22.9%，同比+4.3%。 二手房：本周 14 个样本城市二手房成交面积合计 230.4 万方，环比增长 44.3%，同比增长 3.7%。其中样本一线城市的本周二手房成交面积为 96.8 万方，环比 63.4%；样本二线城市为 104.9 万方，环比 26.4%；样 本三线城市为 28.7 万方，环比 64.8%。 信用债：本周共发行房企信用债 5 只，环比减少 5 只；发行规模共计 36.00 亿元，环比减少 ...

Investment Rating - The report does not explicitly provide an investment rating for the real estate industry Core Insights - The A-share real estate sector experienced a slight decline of -0.3% during the week, ranking 25th among all sectors, while the Hong Kong real estate sector remained flat at 0%, ranking 11th [2] - New home sales showed a rebound on a week-on-week basis but declined year-on-year, indicating continued pressure on market sentiment [3] - The central government has issued a roadmap for urban renewal, emphasizing financial support to accelerate project implementation, which is expected to enhance the pace of urban renewal projects [4][13] Summary by Sections Market Overview - The A-share real estate sector's performance was -0.3%, while the Hong Kong real estate sector was flat at 0% [2] - The property service and management index in Hong Kong increased by 0.3%, while the Hang Seng China Enterprises Index rose by 1.9% [2][26] Land Transactions - In the week of May 10-16, 2025, the total area of residential land sold across 300 cities was 334 million square meters, reflecting a week-on-week decrease of 29% and a year-on-year decrease of 45% [29] - The cumulative area of residential land sold from the beginning of 2025 to date is 12,486 million square meters, showing a year-on-year decline of 1.3% [29] New Home Sales - In the week of May 10-16, 2025, new home sales across 47 cities totaled 343 million square meters, with a week-on-week increase of 30% but a year-on-year decrease of 13% [35] - First-tier cities saw a week-on-week increase of 29% in new home sales, while second-tier cities experienced a 43% increase [35] Second-Hand Home Sales - Second-hand home transactions across 22 cities totaled 265 million square meters, with a week-on-week increase of 39% but a year-on-year decrease of 2% [43] - First-tier cities reported a week-on-week increase of 51% in second-hand home sales, while second-tier cities saw a 31% increase [43] Urban Renewal Initiatives - The central government has outlined eight key tasks for urban renewal, including the renovation of existing buildings and the improvement of urban infrastructure [4][13] - Financial support through central budget investments and special bonds is expected to facilitate the acceleration of urban renewal projects [4][13] Financing Trends - In April 2025, the social financing scale increased by 1.16 trillion yuan, with a year-on-year increase of 29.3% [5][15] - The amount of new residential medium- and long-term loans decreased by 123.1 billion yuan in April, reflecting a year-on-year reduction of 435 billion yuan [16]

Summary of Poly Developments Conference Call Company Overview - **Company**: Poly Developments - **Period**: January to April 2025 Key Points Industry and Market Performance - **Sales Performance**: Poly Developments achieved sales of 877 billion yuan, a year-on-year decrease of 9%, but still ranked first in the industry [3] - **Core City Sales**: Sales in core cities accounted for 91% of total sales, up from 90% in 2024. The sales contribution from core cities and new projects was significant, with new projects accounting for 64% of sales [3][20] - **Market Trends**: The market experienced a slight rebound followed by a decline, with visitor numbers dropping by 16% year-on-year. However, the conversion rate improved, and total transactions remained stable compared to the previous year [7] Financial Performance - **Cost of Funds**: The average cost of interest-bearing liabilities was approximately 2.8%, a decrease of 12 basis points year-on-year. The comprehensive cost of interest-bearing liabilities fell below 3% for the first time, currently at 2.96%, down 21 basis points [6] - **Investment Confidence**: The company has set aside an investment quota of 100 billion yuan for 2025, expressing confidence in achieving its annual targets [5] Land Acquisition and Development - **Project Expansion**: In the first four months of 2025, Poly Developments expanded 15 projects covering 1.46 million square meters, a year-on-year increase of 114%, with an investment amount of 30.8 billion yuan, up 315% [2][4] - **Land Bank**: As of the end of 2024, the company had approximately 52.8 million square meters of undeveloped land, with plans to address some through land storage policies [15] - **Equity Ratio**: The company maintained a high equity ratio in land acquisitions, reflecting confidence in market prospects and financial stability [8] Profitability and Margins - **Profit Margins**: The company aims for a pre-tax profit margin of no less than 15% on new land acquisitions. The overall gross margin is expected to exceed 20% if the pre-tax profit margin is achieved [10] - **Future Projections**: The settlement gross margin for 2025 is expected to remain stable compared to 2024, with a gradual recovery anticipated in 2026 and 2027 [12] Strategic Measures - **Inventory Management**: The company employs a sales-driven production strategy, ensuring that completed but unsold properties are managed effectively to maintain cash flow and sales prices [13] - **Response to Market Conditions**: The company is actively engaging with local governments to leverage policies that support land storage and project development, particularly in lower-tier cities [16] Financing and Capital Structure - **Convertible Bonds**: Poly Developments has received approval for a convertible bond issuance, aiming to optimize its capital structure and enhance risk resistance [21] - **Future Financing Plans**: The company plans to continue capital operations in line with policy opportunities, although no new product plans have been disclosed yet [22] Risk Management - **Impairment Pressures**: The company recorded an impairment of 5.5 billion yuan in 2024, with future pressures dependent on market trends. Management believes that market stabilization will alleviate these pressures [17] - **Cash Flow Management**: The introduction of pilot cities for immediate sales may impact cash flow, but the company is prepared to adapt its development processes to mitigate risks [18][19] Additional Insights - **Sales Strategy**: The company is focusing on enhancing the quality and speed of project execution, particularly in key markets like Beijing, Shanghai, and Guangzhou [3][20] - **Market Position**: Poly Developments has a market share of 7.1% in core cities, with expectations for continued growth in market presence [20]

Investment Rating - The report does not explicitly provide an investment rating for the real estate industry Core Views - The A-share real estate sector experienced a slight decline of -0.3% this week, ranking 25th among all sectors, while the Hong Kong real estate sector remained flat at 0%, ranking 11th [2] - New home sales showed a rebound on a week-on-week basis but declined year-on-year, indicating continued pressure on market sentiment [3] - The recent issuance of a "roadmap" for urban renewal is expected to accelerate project implementation with financial support from the government [4] Summary by Sections Market Overview - The A-share real estate sector's performance was -0.3%, while the Hong Kong real estate sector was flat at 0% [2] - The property service and management index in Hong Kong increased by 0.3%, while the Hang Seng China Enterprises Index rose by 1.9% [2][26] Land Transactions - In the week of May 10-16, the total area of residential land sold across 300 cities was 334 million square meters, reflecting a week-on-week decrease of 29% and a year-on-year decrease of 45% [29] - The cumulative area of residential land sold from the beginning of 2025 to date is 12,486 million square meters, showing a year-on-year decline of 1.3% [29] New Home Sales - In 47 cities, new home sales totaled 343 million square meters, with a week-on-week increase of 30% but a year-on-year decrease of 13% [35] - First-tier cities saw a week-on-week increase of 29% and a year-on-year stability, while second-tier cities experienced a week-on-week increase of 43% but a year-on-year decline of 22% [35] Second-Hand Home Sales - In 22 cities, second-hand home sales totaled 265 million square meters, with a week-on-week increase of 39% but a year-on-year decrease of 2% [43] - First-tier cities reported a week-on-week increase of 51% and a year-on-year increase of 9% [43] Urban Renewal - The government has outlined eight key tasks for urban renewal, including the renovation of existing buildings and the improvement of urban infrastructure [4][13] - Financial support through central budget investments and special bonds is expected to facilitate the acceleration of urban renewal projects [4][13] Financing Trends - In April 2025, the social financing scale increased by 1.16 trillion yuan, with a year-on-year increase of 29.3% [5][15] - The new residential medium- and long-term loans decreased by 123.1 billion yuan in April, reflecting a year-on-year reduction of 435 billion yuan [5][15]

Investment Rating - The investment rating for the real estate industry is "Positive" and maintained [14]. Core Insights - The policy goal of stabilizing the market is becoming more proactive, and market expectations have improved, although marginal downward pressure has increased since April [7]. - The rapid decline in industry volume and price may have passed, with structural highlights in core areas and quality properties [7]. - The experience from Hainan is not universally applicable in the current context, and the short-term supply capacity of real estate companies is declining, putting pressure on cash flow [3][11]. - The industry is expected to gradually promote the pilot expansion of existing home sales, considering institutional reforms and practical constraints [11]. Market Performance - The Yangtze River Real Estate Index increased by 0.04% this week, with a relative excess return of -1.08% compared to the CSI 300, ranking 24th out of 32 [8]. - Year-to-date, the Yangtze River Real Estate Index has decreased by 5.53%, with a relative excess return of -4.37% compared to the CSI 300, ranking 29th out of 32 [8]. Policy Developments - The central government emphasizes financial balance in urban renewal, prohibiting large-scale demolition and illegal borrowing [9]. - Local measures in Xinyang, Henan, have implemented existing home sales for newly sold land, ensuring reasonable residential de-stocking cycles [9]. Sales Data - New home transaction area in 37 cities showed a rolling year-on-year decline of 4.1%, while second-hand home transactions in 19 cities increased by 11.6% [10]. - As of May 16, the new home transaction area in 37 cities showed a month-on-month increase of 0.2%, while second-hand homes increased by 6.2% [10]. Current Focus - The discussion and promotion of existing home sales have gained attention again in 2023 due to delivery issues and the need for institutional reform [11]. - The impact of existing home sales on real estate companies includes extended cash flow recovery times, decreased turnover rates, and increased uncertainty and funding costs [11].

Core Viewpoint - The real estate industry is shifting its focus from high-growth models to a more sustainable approach, emphasizing cash flow as a critical indicator of financial health and operational stability [1][8]. Cash Reserves - The top three companies with the highest cash reserves in 2024 are Poly Developments, China Resources Land, and China Overseas, each holding over 100 billion yuan [2][6]. - Poly Developments is identified as the wealthiest real estate company for 2024, showcasing strong liquidity and risk resilience [2]. Operating Cash Flow - The companies with the strongest operating cash flow in 2024 are China Resources Land, China Overseas, and China Merchants Shekou, indicating robust internal cash generation capabilities [8][12]. - Poly Developments, despite having the highest cash reserves, ranks 15th in operating cash flow with a net amount of 6.257 billion yuan, highlighting a significant gap compared to the leaders [12]. Land Acquisition Activity - Companies with substantial cash reserves are also actively acquiring land, with the top three being China Overseas, Poly Developments, and China Resources Land, securing 688 billion yuan, 583 billion yuan, and 543 billion yuan respectively [6]. Financial Health Indicators - Several companies, including Shimao Group, Xiamen Guomao, and China Evergrande, reported negative operating cash flows, indicating potential operational challenges and inventory pressures [12]. - The industry is experiencing a transition from scale competition to quality competition, where healthy cash flow and self-sustaining capabilities are essential for long-term survival [12].

Group 1 - The seminar "Tomorrow's Good Housing" was successfully held in Shanghai, marking a significant event in the Yangtze River Delta since the concept of "Good Housing" was included in the government work report [1][8] - The Shanghai Housing Association initiated a collection of "Good Housing" case studies, with 45 projects signing the "Good Housing Initiative Commitment" during the seminar [5][8] - The focus of the seminar was on enhancing housing quality, emphasizing safety, comfort, green living, and customer service to improve residents' living experiences [5][8] Group 2 - The seminar featured various high-quality housing projects, including luxury residences and improvement projects, showcasing a diverse range of offerings in the real estate market [7][8] - The Secretary-General of the Shanghai Real Estate Association highlighted the shift in housing demand towards quality and experience, indicating the arrival of the "Good Housing" era [8] - Experts discussed the new national standard for residential projects, which emphasizes safety, comfort, and sustainability, and concluded that there should be no upper limit on the standards for "Good Housing" [14]

Core Viewpoint - The recent financial policies announced by the People's Bank of China and other departments aim to stabilize the real estate market and enhance economic liquidity, with significant interest rate cuts for housing loans and deposit reserve ratios [1][6]. Group 1: Market Performance - The real estate market has shown signs of recovery, particularly during the "May Day Golden Week," with significant sales increases in major cities like Shanghai and Beijing, where new housing transactions surged by 18.32% and 114% respectively compared to the previous year [3][5]. - Poly Developments has been recognized for its strong market performance, with several projects achieving remarkable sales figures during the holiday period, including over 2.08 billion yuan in sales for the "Hongqiao and Zhu" project and over 2.5 billion yuan for the "Guanghe TOD" project [4][5]. Group 2: Company Performance - Poly Developments ranked first in the real estate industry with a sales figure of 323 billion yuan, showcasing its strength during the industry's restructuring phase [6]. - The company reported a revenue of 311.67 billion yuan and a net profit of 9.74 billion yuan, maintaining a leading position in the industry [6][7]. - The company has effectively managed its cash flow, achieving a sales collection of 327.7 billion yuan and a collection rate exceeding 100%, with a significant increase in the collection rate for mortgage payments [7]. Group 3: Land Acquisition and Financial Health - Poly Developments has expanded its land reserves significantly, with a total land acquisition cost of 683 billion yuan, ranking second in the industry, and a focus on high-quality land reserves [8][9]. - The company has successfully reduced its interest-bearing liabilities by 5.4 billion yuan, resulting in a total of 348.8 billion yuan in liabilities and a decrease in the asset-liability ratio to 74.3% [7][8]. - The financing costs have decreased, with the average cost of new interest-bearing liabilities dropping to 2.92%, marking a historical low for the company [7].

Group 1: Market Performance and Trends - In April 2025, the residential market did not maintain the momentum from March, with a total sales area of 996.3 million square meters, representing a month-on-month decrease of 28.0% and a year-on-year decrease of 6.2% [3] - Despite the overall market cooling, cities like Shanghai, Shenzhen, and Guangzhou still experienced "daylight sales," indicating structural heat in the market, particularly in high-demand areas [5] - The average land transaction price in key cities remains high, with significant premium rates observed, particularly in first-tier and core second-tier cities [7] Group 2: Policy and Government Actions - The Political Bureau meeting emphasized the need to stabilize the real estate market, focusing on urban renewal actions and increasing the supply of high-quality housing [1] - Future policies may include expanding demand by lifting purchase restrictions, promoting housing delivery, and accelerating the acquisition of existing properties and land [2] Group 3: Company Developments - Poly Developments achieved significant success in April, securing two high-value land parcels in Hangzhou and Xiamen, with floor prices of 52,000 yuan and 51,000 yuan per square meter, respectively, marking the highest prices for the month [1][9] - Sunac China's overseas debt restructuring has made substantial progress, with a total of approximately 95.5 billion USD involved, potentially allowing the company to convert debt into equity [15] Group 4: Investment and Financing - In April 2025, the top 100 real estate companies acquired land worth 116.53 billion yuan, a month-on-month decrease of 4.8% but a year-on-year increase of 87.4% [8] - The average financing cost for domestic bonds issued by real estate companies in April was 2.7%, a slight decrease from March [15]