Executive summary
Contract sales: the performance of the top 100 real estate companies in April decreased by 44.9% year-on-year
Enterprises acquire land: continue the trend of slight recovery, and focus on core areas for investment
Marketing strategy: continue to "exchange price for volume" and actively respond to "old for new"
Organizational dynamics: Midea Real Estate added a new executive president, and the legal person of Binjiang Group was changed
Strategic developments: A number of real estate companies announced the progress of the white list, and the second extension of three domestic bonds of Country Garden was successful
01
Contract Sales
The performance of the top 100 real estate companies in April decreased by 44.9% year-on-year
Key takeaways:
1. From January to April 2024, China's real estate market continued to operate at a low level. In April, the TOP100 real estate companies achieved sales of 312.17 billion yuan, a decrease of 12.9% month-on-month and 44.9% year-on-year, and the scale of monthly performance remained at a historically low level. In terms of cumulative performance, the top 100 real estate companies achieved sales of 1,091.41 billion yuan from January to April, a year-on-year decrease of 46.8%, a decrease of 0.7 percentage points.
2. In April 2024, the sales threshold of each echelon of the top 100 real estate companies will be further reduced compared with the same period last year, and the threshold value will drop to the lowest level in recent years. Among them, the threshold of the sales amount of the top 10 real estate enterprises decreased by 57.3% year-on-year to 25.88 billion yuan. The thresholds for the top 30 and top 50 real estate enterprises also decreased by 52.6% and 51.1% year-on-year to 6.87 billion yuan and 4.48 billion yuan respectively. The threshold for the sales operation amount of the top 100 real estate enterprises was lowered by 47.7% to 1.85 billion yuan.
3. From the perspective of corporate performance, less than 40% of the top 100 real estate companies with month-on-month growth in monthly performance in April 2024 will also account for nearly 90% of the top 100 real estate companies with month-on-month and cumulative performance year-on-year growth. The number of enterprises with a year-on-year decline of more than 50% in a single month reached 45, and the overall year-on-year performance showed a general decline. From January to April, there were only 21 real estate companies in the top 100 real estate companies with a cumulative trading amount of more than 10 billion, compared with 45 and 47 in the same period in 2023 and 2022, respectively. Even with full-caliber sales, there are only 25 real estate companies with more than 10 billion yuan.
02
Enterprises acquire land
Continuation of the slight upward trend
Investments are focused on key locations
Key takeaways:
In January and April, the investment of typical real estate enterprises continued to pick up since February. CRIC focused on monitoring 30 real estate enterprises with an investment amount of 43.9 billion yuan, an increase of 14% month-on-month, but due to the high base last year, it still fell by 61% year-on-year, and the land area was 2.17 million square meters, an increase of 38% month-on-month and a year-on-year decrease of 66%. Specifically, C&D, Binjiang and Longhu acquired land with an amount of 16.3 billion yuan, 7.4 billion yuan and 6.4 billion yuan respectively, ranking among the top three, of which C&D has won in core cities such as Xiamen, Shanghai, Wuhan and Hangzhou, while Binjiang continues to hold a heavy position in Hangzhou. It can be seen that high-quality land plots in core cities are still the first choice for real estate companies.
2. The sales ratio of C&D and Greentown is higher than the industry average. In the first four months, nearly 70% of the top 100 real estate companies did not acquire land, and the overall land-to-sales ratio of the top 100 real estate companies was only 0.16. Focusing on the top 10 sales enterprises: first, the sales of the top 10 land acquisition from January to April accounted for 57% of the top 100 enterprises, and the investment was highly concentrated in the head enterprises; Second, Greentown, Yuexiu, Longfor, Binjiang, and C&D have similar rankings in terms of land acquisition and sales, and their land acquisition sales are higher than the industry average, of which C&D and Greentown have a land-to-sales ratio of more than 0.5; Third, only Greentown, Longhu, and Binjiang have increased in the amount of land acquired in the first four months compared with last year, while Poly and China Shipping have slowed down slightly this year, and the investment amount in the first four months has decreased by 62% and 74% year-on-year.
3. The absence of "Golden Three, Silver and Four" superimposed on the slowdown in supply, and corporate investment continued to remain prudent. At present, from the perspective of the scale of supply and demand, the rhythm of land supply is comparable to the same period last year, the scale of transactions is basically the same as that of the same period last year, the balance of supply and demand in the industry is still being adjusted, since the first quarter of Shanghai, Hangzhou, Hefei and other hot cities have significantly slowed down the pace of land supply, such as Hefei in the past two pre-supply announcements have only released 4 residential land.
Before the relationship between supply and demand and market expectations return to health, the scale of the land market will remain in excess of the decline for a period of time, and the reduction in supply will affect the choice and judgment of enterprise investment to a certain extent.
From the perspective of enterprises, the absence of the "golden three, silver and four" in the property market and the sales below expectations are still the most important factors leading to the continuous prudent investment of enterprises. At the end of the month, the Central Economic Bureau proposed to "study and digest the stock of real estate and optimize the policy measures for incremental housing", and all major cities have more or less relaxed the purchase restriction policy, and it is expected that the market will usher in more policy details in the future. Real estate companies and buyers have a strong wait-and-see mood, before the market significantly bottoms out and shows a warming trend, real estate companies will maintain a cautious and wait-and-see attitude, and the dynamics of the land market will be concentrated in state-owned enterprises and high-quality core plots.
03
Corporate Finance
The scale continues to be at a low level
Only the financing volume of the TOP10 echelon increased year-on-year
Key takeaways:
1. Total financing: In April 2024, the total financing of 65 typical real estate enterprises was 28.007 billion yuan, a decrease of 29.5% month-on-month and a year-on-year decrease of 56.5%. Judging from the cumulative data of the whole year, the cumulative total financing of 65 typical real estate enterprises was 132.579 billion yuan, a year-on-year decrease of 44.84%. In terms of financing structure, the domestic debt financing of real estate enterprises this month was 27.657 billion yuan, a decrease of 26.6% month-on-month and a year-on-year decrease of 48.1%; There is no enterprise to raise funds abroad; Asset securitization financing was RMB350 million, down 75.9% month-on-month and 95.6% year-on-year.
2. Financing costs: From January to April 2024, the financing costs of 65 typical real estate enterprises added bonds of 3.14%, a decrease of 0.46 percentage points from the whole year of 2023, of which the financing cost of overseas bonds was 4.28%, a decrease of 3.76 percentage points from the whole year of 2023, and the financing cost of domestic bonds was 3.12%, a decrease of 0.36 percentage points from the whole year of 2023. In a single month, the financing cost of real estate enterprises in April was 3.06%, a decrease of 0.04pct month-on-month and 0.42ct year-on-year. No real estate companies carried out overseas financing this month, and because the domestic bond issuers are still mainly state-owned enterprises such as China Resources Land, China Overseas Real Estate, and Shoukai Co., Ltd., the domestic financing cost of 3.06% remains at a low level.
3. Enterprise performance: The company with the largest total financing this month is Rongsheng Development, which has obtained 4.15 billion yuan of financing through bank loans and cooperation with AMC. From the perspective of enterprise echelon, the average financing amount of the top 10 real estate enterprises from January to April 2024 is 3.523 billion yuan, which is the most among all echelons, and the financing scale of real estate enterprises in this echelon has increased by 31.25% year-on-year, making it the only echelon that has seen growth. From the perspective of financing costs, the financing cost of the TOP10 echelon of real estate enterprises is still the lowest, at 2.75%, which is 0.27 pct lower than the financing cost of the whole year of 2023, 0.8 pct lower than that of the top 11-30 real estate companies with the highest financing cost, and the financing cost of the top 51+ real estate enterprises is 1.19 pct lower than that of the whole year of 2023, the largest decline.
04
Marketing strategy
Continue to "exchange price for volume"
Actively respond to "trade-in"
Key takeaways:
1. This month, real estate companies are actively marketing, and the theme of the event mostly revolves around keywords such as "spring", "May Day", "existing house", etc., and the promotion method is mainly carried out in the way of "price for volume" such as special rooms and discounts, and at the same time, through simulcast, live broadcast and other ways to warm up and drain marketing activities. According to the CRIC survey, 9 of the top 10 real estate companies launched regional/group marketing activities, and Poly Development, Vanke and other real estate companies have launched marketing activities in many regions within the month, taking Poly Development as an example, in the first half of this month, Poly Hebei, Poly Shanxi and other festivals launched marketing activities, in the middle of this month, Poly Jiangsu launched the "Super Member Festival", and in the second half of Poly Jiangxi, Poly Gansu and other regions began to "rush to May Day". Not only that, Yuexiu Real Estate, China Jinmao, CCCC Real Estate and other real estate companies ranked among the top 20 real estate companies have launched group marketing activities to prepare for the "May Day".
2. This month's marketing methods of real estate enterprises show the following three characteristics: first, the scale of special housing has a trend of increasing volume, and this month Poly Jiangxi, Poly Gansu, Vanke Guiyang and other regions have launched 100 sets of special housing listings, which is significantly larger than last month; Second, the marketing of existing houses has made great efforts again, with "Poly Yunhe +" launching a variety of existing houses at a fixed price, Vanke Shijiazhuang and Vanke Taiyuan launching the "Real Scene Housing Buying Festival", Vanke Wuxi launching the "Peace of Mind Existing Housing Festival", and at the same time, China Resources Fujian launched the "Cover Asset Festival", and Longfor Zhuhai launched the marketing activities of "The last 5 sets of office buildings dropped by 1 million" to accelerate the decentralization of non-residential products; This month, Vanke Wuxi, China Resources Guangzhou, C&D Zhangzhou, Midea Suxu and other regions launched live broadcast activities, China Merchants Shanghai also prepared a two-month all-star live broadcast group for 100 live broadcasts, which can cover "Labor Day", "520" and "Hi Pi Friday Special", Vanke Jibei held "Star Push Official" to improve the efficiency of reach.
3. The "old for new" team continues to grow, and many leading real estate companies have launched "renewal" activities. According to incomplete CRIC statistics, Vanke, China Resources, China Merchants and other real estate companies actively responded to Zhengzhou's "trade-in" policy and seized the 500 sets of quota in the pilot stage. Nanjing mainly registers through the WeChat public account of "Nanjing Real Estate Micro Government", and the main body of stock housing acquisition is a wholly-owned company of Nanjing Anju Construction Group. In addition, Poly Zhejiang and Hongyang Xuzhou also took advantage of the "May Day" period to continue to promote the "old for new".
4. Adopt a positive attitude and combine marketing with multiple means. In the short term, the "May Day" period is still an important marketing node of the year, and real estate companies have played a "marketing mix punch", using special houses, existing houses with price protection, no reason to check out and other equity marketing activities to appease buyers to wait and see. Looking forward to the market outlook, "618" and other marketing nodes followed, in the context of the continuous pressure on the existing house inventory, take advantage of the situation to increase the inventory of existing house discounts, which will help enterprises to return funds, differentiated marketing can more capture the attention of potential buyers, such as Vanke Nanjing, Zhenjiang, Yangzhou launched this month "cross-city house purchase discount 50,000 yuan" activities, and at the same time, the marketing activities that quickly respond to the local housing purchase policy can also earn a certain amount of traffic.
05
Organizational dynamics
Midea Real Estate has a new chief executive officer
Binjiang Group changed its legal person
Key takeaways:
In April 2024, the major personnel changes and organizational adjustments of 70 key monitoring real estate enterprises are as follows:
1. Organizational adjustment: Following the merger and adjustment of the subordinate companies in the southern and Shanghai regions, Vanke Beijing and the northwest region launched urban restructuring in April. Specifically, the Taiyuan Company, a subsidiary of the Beijing region, merged with the Shijiazhuang Company to manage the business of Taiyuan, Shijiazhuang, Baoding and Jinzhong; The Beijing company merged the Baotou business department to manage the business in Beijing, Baotou, Langfang and Zhangjiakou; The Jinan company is responsible for the business of Jinan, Linyi and Zibo; The company in northern Hebei is responsible for the business of Tangshan and Qinhuangdao; The Qingdao company is responsible for the business of Qingdao and Weifang; The Tianjin company is responsible for the business in Tianjin; The Yantai regional company is responsible for the business of Yantai and Weihai. The northwest region was reorganized, and Lanzhou Company and Xining Company were merged into Lanning Company, and the Northwest Region is now Lanning, Xi'an, Xinjiang and Yinchuan Company.
The purpose of this regional adjustment in Beijing and Northwest China is to implement Vanke's strategy of transforming from a "core company in the city" to a "core company in the area" and improve management efficiency. At the same time, the company has also carried out regular personnel rotation according to the usual practice, and almost all general managers in the northwest region have been transferred, reflecting the company's internal resource optimization and management flexibility.
2. In terms of personnel changes: Midea Real Estate Group has added the position of executive president, which is held by Wang Dazai, the former regional general manager, to assist the president in handling daily operations and affairs, and Hao Hengle is still the chairman of the board of directors and president; The legal person of Hangzhou Binjiang Real Estate Group was changed from Qi Jinxing to Mo Jianhua, and Qi Jinxing is still the actual controller.
The new management changes of the two companies aim to strengthen the management team, clarify responsibilities, promote long-term steady development and improve operational efficiency, so as to better adapt to the development of the industry and actively promote corporate change.
06
Strategic dynamics
A number of real estate companies announced the progress of the white list
Country Garden's three onshore bonds were successfully rolled over for the second time
Key takeaways:
1. This month, many real estate companies released their annual results, and also mentioned their strategic plans for 2024. On April 24, at the performance meeting, China Merchants Shekou said that the development business is still the "basic market" of China Merchants Shekou, and in the future, it will formulate a city optimization research system guided by the "five good" (good city, good policy, good project, good team, and good region) standard; At the same time, China Merchants Shekou will also anchor the top five targets in the industry. In addition to attracting investment, Gemdale Group and BBMG Group are relatively conservative, with Gemdale saying that the company's business focus is still strictly adhering to the bottom line of cash flow safety. At the same time, Country Garden announced that due to the continuous volatility of the industry and the increasingly complex operating environment of the company, it is necessary to collect more information to make appropriate accounting estimates and judgments, and it is expected that it will not be able to disclose the 2023 annual report on time.
2. In terms of financing coordination mechanism, many real estate companies have also updated the latest progress. Jinke announced on April 17 that 82 projects have been included in the "white list" supported by the government, and these projects are located in 14 provinces (autonomous regions and municipalities directly under the central government) across the country; Some of the selected projects have already started to connect with financing channels and have successfully received support from a number of banks. CIFI Group announced that as of April 22, CIFI has 68 projects in the "white list" across the country, of which 19 projects have received financing support from Bank of China, China Construction Bank, Bank of Communications, CITIC, Ping An, Minsheng, Everbright, Industrial Bank, Hengfeng, Huaxia and other banks by adjusting repayment nodes, reducing interest, replacing existing financing and new financing. In addition, Sino-Ocean Group has been approved to enter the "white list" of nearly 50 projects, and a total of 40 projects of Zhongnan Construction have applied for the "white list" of real estate financing.
3. In addition, in terms of capital operation and debt restructuring, Longfor Group revealed on April 1 that it would use operating loans to repay two guaranteed bonds totaling about 3 billion yuan due in the second half of next year and the first quarter of 2026. Longfor said that it has achieved an increase of 12 billion yuan this year through the replacement of operating property loans without additional collateral, and it is expected that the annual increase will exceed 20 billion yuan, bringing the balance to nearly 70 billion yuan. On April 11, Poly Development said that it had no overseas bond issuance plans in the near future, and the number of international credit rating agencies hired had also dropped to one. At the same time, on April 24, according to media reports, Country Garden's "21 Bidi 01", "21 Bidi 04" and "21 Bidi 02" secondary extension plans were voted and approved, and part of the principal and interest payment was postponed to September. In terms of Zhongnan Construction, because the closing price of the stock has been lower than 1 yuan per share for ten consecutive trading days, it issued a delisting risk warning for the first time; On April 20, it was reported that Zhongnan Construction had negotiated cooperation with PAG Investment Group and Jiangsu Assets on debt resolution and equity transactions. (Source: CRC Research Center)