Financial reporter Zhang Tingwang
The disclosure of the first quarterly report of A-shares has ended, and the performance pressure of listed real estate companies has not improved significantly, whether it is revenue, profit or cash flow, most real estate companies have performed poorly.
However, some positive changes can still be captured through some of the data. In particular, state-owned enterprises have made efforts to improve and strengthen cash flow, which has injected confidence into the industry.
Under the new situation, since the beginning of this year, various localities have continued to issue new policies for the property market according to the city's policies, and the improvement of policies has had a positive effect on the market. However, from the actual effect, the overall property market has not yet recovered in a large area, in view of this, the second quarter of the local policy is expected to be strengthened due to the city.
Some real estate companies take the lead in "recovery"
The first quarter of 2024 is not off to an optimistic start, with most real estate companies facing a decline in revenue. According to Flush iFinD data, as of April 30, 68.6% of the 102 real estate companies that have released their 2024 first quarter reports have seen a year-on-year decrease in operating income.
With the decline in performance, the profitability of real estate companies continues to be under pressure. In the first quarter of this year, 52 of the 102 real estate companies made a profit (net profit attributable to the parent company > 0), accounting for about half of the total, a decrease of 13 from the first quarter of 2023 (65), and only 24 real estate companies with positive net cash flow, a decrease of 16 from the same period in 2023.
Image source: Xinhua News Agency
It is worth noting that in the face of a difficult industry environment, real estate enterprises represented by central state-owned enterprises have shown good operating capabilities and a trend of rapid recovery. Including China Shipping, CCCC, Poly, China Resources, Greentown, China Merchants Shekou, etc., highlighting the resilience of central state-owned enterprises in the face of adversity.
For example, in the first quarter, China Overseas Real Estate achieved revenue of RMB36.5 billion, a year-on-year increase of 14.4%, and operating profit of RMB6.65 billion, a year-on-year increase of 22.2% after net foreign exchange gains and losses. China Merchants Shekou achieved revenue of 23.747 billion yuan in the first quarter, a year-on-year increase of 58.22%, and net profit attributable to the parent company was 332 million yuan, a year-on-year increase of 22.22%.
In addition, several real estate companies, such as Binjiang Group, CCCC Real Estate, and Rongsheng Development, have not only achieved positive revenue growth, but also achieved revenue of more than 2 billion, demonstrating the effectiveness of strategic adjustment and stable operation. Specifically:
Binjiang Group will achieve an operating income of 70.443 billion yuan in 2023, a year-on-year increase of 69.73%, and maintain a revenue growth of 35.85% in the first quarter of 2024.
Rongsheng Development's revenue in the first quarter increased by 81.56% to 11.114 billion yuan, and the net profit attributable to shareholders of listed companies increased by 107.99% year-on-year to 51.26 million yuan, successfully continuing the trend of turning losses into profits since the third quarter of last year, showing effective cost control and market strategies.
CCCC Real Estate showed a clear recovery momentum in the first quarter, with revenue growth jumping to 28.6%, successfully reversing the downward trend of the previous year. This positive change was the result of a number of strategic realignment measures taken by the company.
In the first quarter of 2024, revenue increased year-on-year for A-share real estate companies
Yihan Think Tank believes that the surviving real estate companies can basically maintain stable operations, but in order to really live well and for a long time, they still need to work hard in terms of continuous operation and cash inflow. Only by continuously optimizing their own business strategies, improving product quality and service levels, and seeking certainty inward, can they remain invincible in the fierce market competition.
In addition, in the process of real estate market adjustment, the business model of real estate companies has also changed, the report of the China Index Research Institute pointed out that the scale of new construction in 2023 will increase by more than 50% year-on-year, and the development of the agency construction industry is still accelerating this year, and more than 90 real estate companies have been involved in the field of agent construction. In addition, according to CRIC statistics, in the first quarter of this year, a total of 118 projects won bids for agent construction, an increase of 32.6% compared with 89 in the same period in 2023, and the increase hit the highest in a single quarter in recent years, especially compared with the second half of 2023.
In addition to the traditional residential construction, the agency construction industry is also expanding to the fields of large-scale complex construction, health care industry construction, and government affordable housing construction.
In the second quarter, the city's policy is expected to be strengthened
At the policy level, the determination from the top level to the local level to support the steady development of the real estate market has not changed.
One of the key tricks is the gradual withdrawal of purchase restrictions. Since the beginning of this year, with the change of the market situation, many core cities have also been lifted. Especially in the last week of April, Chengdu, Nanjing, Tianjin, and Beijing have successively introduced new policies for the property market, including canceling or relaxing the purchase restriction policy, supporting the "old for new" housing, and optimizing the provident fund loan policy.
For example, on April 30, Beijing ushered in its first adjustment to the housing purchase restriction policy that had been implemented for 13 years since 2011. On April 28, Chengdu announced that the purchase restriction policy that had been implemented for more than seven years was completely lifted.
On the other hand, this year, real estate financial support has continued to exert force, on the supply side, the financing coordination mechanism has been implemented, operating property loans have been relaxed, and the development of the rental market has been supported, and on the demand side, the LPR of 5 years and above has been lowered by an unexpected amount, helping to reduce the interest rate of incremental housing loans and reduce the burden of existing housing loans.
With the continuous development of real estate policies, many places in China have once again set off a wave of cancellation of the lower limit of the interest rate for the first home loan. According to incomplete statistics, more than 20 cities have issued relevant announcements since April alone, and up to now, nearly 60 cities across the country have phased out the lower limit of the first home loan interest rate.
The most noteworthy thing is that the Politburo meeting held on April 30 gave the latest tone to the property market, on the whole, the prevention and resolution of real estate risks is still the focus, and at the same time put forward the overall study of the digestion of stock real estate and optimize the policy measures of incremental housing, pointing out the direction for the next real estate policy.
In other words, in the second quarter, local policies are expected to be strengthened, and the general trend of loosening first-line regulation and control and comprehensive liberalization of second- and third-line will not change.
Yan Yuejin, research director of E-House Real Estate Research Institute, said that combined with the recent adjustment of property market policies in many places, it will have a very positive impact on the real estate market in the future. "As a first-tier city, Beijing's policy is of weather vane significance, which means that the housing purchase policy will be further relaxed in May, and the market will be more active. ”
Some real estate companies have expressed confidence in the real estate market in 2024.
At the 2023 results briefing, the management of CR Land said that there is a foundation for long-term and healthy development of the real estate market...... It is expected that the policy will continue to be relaxed in the future, and the market will be in the stage of bottoming out and stabilizing and accumulating upward momentum in 2024. In the first quarter of 2024 performance report, China Overseas Real Estate said that China's real estate industry still continues to decline and build a bottom, and transactions are sluggish. At present, a series of policies to support the demand for rigid and improved housing will help the real estate market stabilize and improve, and develop healthily and steadily in the long run.
Despite this, it should still be noted that the overall property market has not yet recovered in a large area, and the industry is still in the bottoming stage.
According to data from the National Bureau of Statistics, from January to March this year, the sales area and sales of new commercial housing fell by 19.4% and 27.6% year-on-year respectively, real estate development investment fell by 9.5% year-on-year, and indicators such as new housing construction area, construction area and completed area did not show significant improvement, and the housing price index of 70 large and medium-sized cities in March was still mainly reduced, and the downward pressure on the real estate market still existed.
Image source: National Bureau of Statistics
Source: Outlet Finance client