SINOLINK SECURITIES(SH:600109)2024-05-19 10:23Financial Data and Key Indicators Changes - The central government has emphasized the importance of "digesting existing housing stock and optimizing new housing supply" as a key focus for the real estate sector, indicating a renewed commitment to inventory reduction strategies [6][22] - Local governments are facing limited debt issuance capacity, with only a few developed regions able to leverage further, which may hinder the scale and speed of inventory reduction efforts [22][24] Business Line Data and Key Indicators Changes - Various inventory reduction models have been identified, including consignment sales, old-for-new exchanges, repurchase and storage, subsidy issuance, and old-to-guarantee models, each with different operational requirements and effectiveness [3][6][21] - The old-for-new exchange model has shown promising results in pilot cities, with significant increases in project visitations and sales in areas like Nanjing and Wuxi [14][15] Market Data and Key Indicators Changes - Over 54 cities have implemented housing "old-for-new" policies to support residents in selling existing homes and purchasing new ones, indicating a broad market response to the central government's directives [6][22] - The repurchase and storage model, where local governments buy unsold new homes, is expected to accelerate inventory reduction but requires substantial funding, which may come from central government support [18][20] Company Strategy and Development Direction and Industry Competition - The industry is shifting towards a focus on improving liquidity in the housing market through various models, with a particular emphasis on the "old-for-new" strategy as a key driver for inventory reduction [6][21] - Companies that can maintain land acquisition capabilities and focus on core urban areas are expected to benefit from the evolving market dynamics, with recommendations for firms like Jianfa International Group and Greentown China [22] Management's Comments on Operating Environment and Future Outlook - Management has indicated that the current operating environment is challenging, with the need for central government support to facilitate effective inventory reduction [22] - The expectation is that as inventory reduction measures take effect, market sentiment will improve, leading to a potential recovery in real estate stock prices and valuations [22] Other Important Information - The central government's leverage ratio is lower than that of local governments, which may impact the funding available for inventory reduction initiatives [22][24] - The "old-to-guarantee" model is currently in a trial phase in Zhaoqing, with its effectiveness yet to be fully assessed [21] Q&A Session Summary Question: What are the inventory reduction models and their effectiveness? - The five models include consignment sales, old-for-new exchanges, repurchase and storage, subsidy issuance, and old-to-guarantee, each with varying levels of implementation success and market impact [3][6][21] Question: Where will the funding for inventory reduction come from? - Local governments have limited capacity for debt issuance, necessitating central government support for effective funding of inventory reduction efforts [22][24] Question: What are the necessary supporting policies for inventory reduction? - It is suggested that restrictive measures on the demand side should be gradually relaxed, and mortgage rates are expected to continue decreasing to alleviate repayment pressures [22]