Text: Liu Bo's team
To see the general trend of real estate, we must first understand the policy, because the policy logic is the underlying driving force of real estate.
The conference that will determine the fate of China's economy in the next few years or even a decade has come to an end. In the communiqué of the Third Plenum of the Central Committee of the Communist Party of China, this year's communiqué mentioned real estate for the first time. The portion size is not heavy.
In addition, the meeting also made it clear that we should improve the basic public service system, strengthen the construction of inclusive, basic and comprehensive people's livelihood, solve the most direct and realistic interests of the people, and constantly meet the people's yearning for a better life.
This means that the "dual-track system" of the property market of "security is guaranteed, and the market is returned to the market" has been formally established, and it also means that the commercial housing in the market will be lifted from the "seal", encouraging the survival of the fittest in the market, and only those houses that meet the people's "good life" can stand out.
With the final decision on real estate from the top, 2024 is destined to be a watershed in the switch of the property market cycle.
The stage of breaking the "old pattern" that lasted for several years is over, and from the second half of the year to the next few years, real estate will enter the stage of establishing a "new situation". The new spring of the new cycle may be late, but it will not be absent.
The market's perception of real estate is time to switch from "risk-averse thinking" to "moderately long", from which houses can not be bought and which real estate companies cannot be touched, to which houses can be bought and which real estate companies can focus on.
01
From a "dark horse" to a "big white horse" in the industry
In the face of unprecedented changes, the huge waves set off by the adjustment of the real estate cycle in the past few years have put many real estate companies on the beach. However, there are also real estate companies that have become exceptions, such as Huafa shares.
In recent years, against the wind, it has transformed step by step from a "dark horse" to a "big white horse" in the industry. In the first half of 2024, Huafa Co., Ltd. ranked among the top 10 on the list with a trading amount of 44.35 billion yuan, ranking among the top ten giants.
Four years ago, Huafa was only one of the top 50 real estate companies in the midstream.
Behind the "Leaping Dragon Gate", of course, there is the foil of peers and the safety cushion brought by the identity of state-owned enterprises, but it is more that Huafa shares themselves work hard enough.
There are two points that can illustrate the progress of Huafa shares, one is that the sales of Huafa shares in the first half of this year are equivalent to the whole year of 2018, on the other hand, the performance of many head real estate companies is only half of that in 2018; Second, compared with last year, Huafa shares have risen 3 places against the trend.
With the end of the "three highs" model, the industry is gradually disenchanted by size and ranking, but that is not to say that they are no longer important.
First of all, if real estate companies only have scale and ranking, it is undoubtedly dangerous; However, if the scale and ranking are not talked about at all, the real estate company has no future, and the market share is getting smaller and smaller, until it is classified as "other".
Just like the reshuffle of the home appliance industry, the real estate industry in the new cycle is also strong and strong, and only the head enterprises are qualified to talk about "living well". As the famous saying goes, you're "not at the table, you're on the menu." Therefore, Huafa shares, which are among the top 10, not only got the "tickets" for the new cycle, but also got the "meal tickets".
Second, the causal relationship between "size and ranking" and enterprise development has changed. In the past, they were the "carrots" and "causes" that lured real estate companies to soar, but now they are the "fruits" of enterprise development. Therefore, their changes also directly reflect the quality of the current situation of enterprise operation.
In the downward cycle, these positive and enterprising achievements are undoubtedly the best embodiment of the high-quality development of Huafa shares. In short, Huafa shares are not only a new "big white horse", but also a head real estate company with stable expectations and imagination space, which is still going uphill.
02
Deep ploughing is the "shield", science and technology are the "spear"
A giant who is both offensive and defensive
In the past two years, there have been two major changes in the demand side of real estate: first, the demand for housing has converged to first-tier cities and strong second-tier high-energy cities; The second is that housing is not speculation, and everyone has become more rational and picky when buying a house.
We often say that there is no successful enterprise, only the enterprise of the times. The underlying logic behind this is that demand determines supply. When there is a great change on the demand side, whoever can adjust more properly on the supply side will be able to go through the cycle. Huafa shares can grow against the trend in terms of performance, and the key reason is here.
First, the market structure is healthy, and the demand safety cushion is thick.
To put it simply, do not seek more, but seek refinement, and deepen the cultivation of key cities, key areas and key projects. In the first half of the year, 5 projects contributed 1/4 of the performance to Huafa shares.
- In the base camp of Zhuhai, the Hengqin Seal project sold nearly 4 billion yuan, topping the single-plate sales championship in Zhuhai in the first half of the year; Another big red plate, Zhuhai Qinao New Town, won about 1.28 billion.
- In Shanghai, Huafa Maritime Duhui sold more than 1.5 billion yuan in the first half of the year, ranking TOP1 in the sector; The first batch of Shanghai Huafa Times City opened as high as 95%, with a strong sales of 1.8 billion.
- In Guangzhou, Chimelong Wanbo Yue Mansion won the "double crown" of Guangzhou in terms of online signing area and number of sets in the first half of the year.
- In Chengdu, Jinchen Mansion was sold out twice in the first half of the year, ranking among the top 1 in Jinjiang District in terms of residential transaction value in the first half of the year; Yuetianfu has obtained evidence 5 times, and it has sold well again and again, and continues to dominate the "triple crown" throne of Chengdu's high-end property market.
It is no exaggeration to say that the ability to acquire land is the core competitiveness of real estate companies. Deep cultivation of high-energy cities with strong demand is the key to the steady progress of Huafa shares.
Compared with low-energy cities, the cyclical characteristics of the "push-ups" in the property market in high-energy cities will be more obvious. Focusing on high-energy mainstream cities, a practical significance for Huafa shares is that its performance is more resilient during the market downturn (which has been confirmed); When the market recovers, there will be more elasticity in performance (imagination in the next few years).
The second is to make market-leading products.
The reasons why people don't buy a house may be different; But there must be one reason for buying a house is the same, that is, only to pay for a "good house". In the era of housing not speculation, whether it is the living experience or the preservation and appreciation of value, it will depend more on product strength.
2024 is destined to be the first year of a good house. The Ministry of Housing and Urban-Rural Development of the People's Republic of China has made it clear that it will make efforts to build good houses this year, and has given the evaluation criteria for "good houses": green, low-carbon, intelligent and safe. Accelerating the development of "digital, intelligent, green, and industrialized" new residential buildings has also been written into the 2024 Zhuhai Municipal Government Work Report.
As a "good student" in the industry, Huafa Co., Ltd. took the lead in handing over the paper in the first half of the year, and took the lead in the industry to release the "technology + good house product system technical standard", combining products with new technologies such as digital smart communities, smart homes, and smart drone services in a multi-faceted and multi-dimensional way, so as to carry out in-depth exploration and innovation of future lifestyles, and provide a model for Zhuhai for the high-quality new development model and new quality productivity of the real estate industry.
At present, there are multi-generational homes on the market. Most of them are second-generation and third-generation houses that meet basic living needs and average quality, and only a few are fourth-generation houses that meet diversified needs such as greening, landscape, and space. Technology + good house is to transcend and innovate on the basis of the fourth generation of housing, and it is far ahead of the industry in the industry.
For example, in the Yuetianfu project, which is a big seller in Chengdu, Huafa Co., Ltd. pioneered a column-free "double panoramic cabin" in the local market, bringing an immersive panoramic view to residents, in addition to floating balcony design, sky garden, etc., directly pulling the product power of new houses in the Chengdu market up to a higher level.
The good house of Huafa shares not only allows buyers to compete for their waists, but also conquers the industry.
In the first half of the year, Zhuhai Huafa Bay Seal No. 1, Zhuhai Huafa Hengqin Seal, and Shanghai Huafa Maritime Metropolis won the "Top Ten National Works in the First Half of 2024" by CRIC. Among them, "Top Ten High-end Works in the First Half of 2024", Huafa shares are the only two yuan, namely Wanxi No. 1 and Hengqin Xi.
Under the helm of Li Guangning, chairman of the board of directors of the company, Huafa shares in recent years, the city is deeply cultivated as a "shield", product innovation is a "spear", the lower limit is very high, the upper limit is higher, and it is a rare head real estate enterprise with both offense and defense in the new cycle of real estate.
03
Work together, make profits, and be a "capital-friendly" enterprise
The "sun" of the real estate industry has come out, but the real estate stocks in the capital market are still in chaos.
The main reason is that the old pricing logic has been broken, and the new consensus has not been established. In the past, the capital market was pricing real estate stocks according to the logic of "growth stocks", but with the end of the "three-high model", the soaring is no longer there, and real estate stocks have changed from "Britney" to "Mrs. Niu".
But this does not mean that there is no future for real estate stocks, there is no sunset industry, only sunset companies. Excellent Hong Kong-funded real estate companies have already set a good example for us.
Some of the top 10 and top 20 real estate companies like Huafa will evolve into "big blue chips" that are stable and investor-friendly, and beneficial to society.
In fact, the body of Huafa shares is already flashing the shadow of the future form of domestic real estate enterprises.
The first is to increase dividends and enhance investors' sense of gain.
In 2023, Huafa will distribute cash dividends of 1.018 billion yuan to shareholders, and the proportion of cash dividends to the net profit attributable to the parent company is as high as 55.41%, ranking among the top in the industry, which is quite generous.
As we all know, the available cash is the most precious "bullet" in the hands of real estate companies, in the current real estate financing environment is not optimistic, real estate companies are generally tight cash flow, Huafa shares can also come up with such a high dividend ratio, not only to demonstrate the strength of not bad money, but also to reflect the sincerity of investors.
It is worth mentioning that Huafa shares have paid dividends 20 times in the past 20 years since they were listed, with an average annual dividend of 7.8 billion, which is equivalent to nearly half of the dividends of large A real estate stocks this year.
Huafa shares in the benefit of shareholders of the boldness, and some listed "iron rooster", in stark contrast.
The second is to practice responsibility, a good enterprise must be a win-win situation for itself and society.
ESG mainly emphasizes the social and public value of enterprises, and is also a yardstick to measure the high-quality development of enterprises. Global benchmark companies such as Tesla and Starbucks have already taken the initiative to incorporate them into their strategic decisions. In China, with the improvement of the dual carbon strategy and supervision, ESG has also entered a new stage of mandatory disclosure.
In the first half of this year, Huafa Co., Ltd. was selected into the list of "China's ESG Listed Companies Pioneer 100 (2024)", and in the entire real estate industry, only 5 companies were on the list, so the gold content is beyond doubt.
Taking green buildings as an example, by the end of 2023, Huafa has promoted a total of 163 green building projects, with a total scale of more than 26.7 million square meters.
The third is to transform governance and pursue stable and comprehensive advantages.
An obvious change is that Huafa pays more attention to the coordinated development of internal resources and operational efficiency.
In the first half of this year, Huafa Co., Ltd. did an unexpected thing and announced the privatization of Huafa Property. You must know that the report card of Huafa Property is not bad, and the growth rate of several core indicators last year was in double digits. From 2019 to 2023, the average annual growth rate of HUAFA Property's operating income will exceed 20%, and the average annual growth rate of net profit will be about 40%.
Why voluntarily abandon a listing platform? The undervaluation of the stock price is one thing, and more importantly, the business ideas of Huafa shares have changed, from "division of troops" to "joint force".
After the delisting, HUAFA Property will become a wholly-owned subsidiary of HUAFA Co., Ltd., which can not only increase profits, enhance cash flow, but also strengthen business synergy, further reduce management costs and improve operational efficiency.
This kind of adjustment seems to be incompatible with the current mainstream operation of the mainland industry, and it cannot be ruled out that Huafa Co., Ltd. has the foresight and takes the lead in keeping up with Hong Kong-funded real estate enterprises. For example, Hong Kong-funded blue-chip real estate companies such as Sun Hung Kai Properties and Henderson Land basically have property services under their real estate listing platforms, and what they pursue is to "make a fist with five fingers" and give full play to their comprehensive advantages to the greatest extent.
04
Write at the end
Real estate, as a cyclical industry, does not have a winter that will not pass, and there is no spring that will not come.
Whether you are a buyer buying a house or a developer building a house, there is no need to worry about the industry. There are two real concerns: one is whether your own quality is hard enough; The second is whether the chips (house) in your hand are of high quality. If you don't understand, please refer to the above Huafa shares.
Remember a sentence, real estate used to be "based on the market", and the future is "based on ability".