In the past two days, under the strong boost of the spring breeze of major major policies, funds are currently longing Chinese assets on a large scale, and the vitality of the market has been significantly stimulated.
According to Futubull data, Hong Kong stocks continued to rise strongly, and the Hang Seng Index stood above the 20,000 mark again after a year. As of the close of trading on October 7, the Hang Seng Index was at 23099.78.
At present, the market rally is mainly caused by the outbreak of bullish sentiment, which is inseparable from the recent policy combination. Stimulated by the policies that have been introduced, the beneficiary sectors have risen in advance, such as Hong Kong real estate stocks.
According to Futubull data, as of the close of trading on October 7, the real estate sector of Hong Kong stocks this year has risen by more than 100% from its September low. Guojin Securities pointed out that the current fundamentals of the real estate sector are still bottoming out, with strong policy expectations, and at the same time low valuation and low positions, so it is more flexible in the short term.
At the same time, Guojin Securities pointed out a potential investment direction for investors, that is, a stable real estate enterprise that will be the first to benefit from the stabilization of high-energy cities and improving products.
Following this investment logic, Greentown Management, one of the leading enterprises in the agency construction industry, one of the subdivisions of the real estate industry, has entered the author's field of vision. Next, the author will discuss the historical opportunities of the industry brought by the policy and the development potential of the company itself, so as to further analyze the real growth value of Greentown management.
1. Heavyweight favorable policies focus on "bombing" to promote the continuous recovery of the industry
Standing at the macro level, under the influence of a series of recent national-level policy "combination punches" that exceed market expectations, the real estate industry has ushered in a new round of policy outlets.
Specifically, at the central bank level, on September 24, at a press conference held by the Information Office of the State Council, Pan Gongsheng, governor of the People's Bank of China, announced a number of heavy policies, including a 0.5 percentage point RRR cut, a 20 basis point policy interest rate cut, and a reduction in the interest rate on existing housing loans and a reduction in the minimum down payment ratio for second home loans.
In this regard, Wang Qing, chief macro analyst of Oriental Jincheng, believes that the People's Bank of China's announcement to reduce the interest rate of existing housing loans will effectively curb the phenomenon of prepayment of loans, alleviate its impact on residents' consumption, and also release a positive signal to stabilize the property market, which will help promote the stabilization and recovery of the property market.
In the author's view, this series of new policies to expand money supply and stabilize the real estate market and economy will have a positive impact on enhancing market confidence, stimulating the vitality of market players, stabilizing credit conditions, and enhancing the ability of finance to continue to support the real economy. These measures also send a positive signal of strengthening policy coordination and committing to achieving the full-year economic growth target.
In addition, banks reduce interest rates on existing mortgages, helping to reduce the interest burden on borrowers. According to the author's calculations, it is estimated that this measure will benefit about 50 million households and about 150 million people, and will save about 150 billion yuan in interest expenses for families every year. This will not only help stimulate the growth of consumption and investment, but also reduce prepayment of loans. In addition, it can reduce illegal operations, such as illegal conversion of existing mortgages, protect the rights and interests of financial consumers, and promote the stable and healthy development of the real estate market.
In addition, in the recent meeting held by the Political Bureau of the Central Committee of the Communist Party of China, it was also emphasized that it is necessary to promote the real estate market to stop falling and stabilize, strictly control the increment of commercial housing construction, optimize the stock, improve the quality, increase the loan delivery of "white list" projects, and support the revitalization of the stock of idle land. It is necessary to respond to the concerns of the masses, adjust the housing purchase restriction policy, reduce the interest rate of the stock of housing loans, pay close attention to improving the land, fiscal and taxation, financial and other policies, and promote the construction of a new model of real estate development.
In such an environment, the low-cost, high-yield asset-light operation model is becoming the consensus of the industry, and the agency construction industry has ushered in new development opportunities. In particular, the leading enterprises in the industry are expected to achieve dual growth in performance and scale driven by the continuous expansion of the market.
According to the WeChat message of the research officer of CRIC Real Estate, from January to June 2024, the scale of new contracts signed by agent construction enterprises will grow steadily. In the first half of 2024, the top 20 enterprises with new scale of agent construction will add 85.87 million square meters of newly contracted construction area, which has reached 72% of the new construction area in 2023.
The author understands that the management of real estate companies has calculated an account, from 2010 to 2020 when the industry just started, there has been an annual growth of more than 20%, and it is expected that there will be a compound growth of 23% every year from 2021 to 2025, and by 2025, the entire market will have 200 million square meters of construction area. Industry insiders have also estimated that by 2025, the construction of commercial housing will grow from a market of 10 billion yuan to a market of 100 billion yuan, with a value of 2 trillion to 2.5 trillion yuan.
It can be seen that the agent construction industry is still in a stage of vigorous development. As far as the current competition pattern is concerned, after the industry has experienced explosive growth in 2023, as the number of agent construction enterprises tends to be "saturated", the competition in the agent construction industry has become more and more intense, and the competition caused by rapid expansion and continuous market share has intensified, making the industry gradually move towards a new stage of stable differentiation and reshuffle.
This also gives those leading construction enterprises with good brand effect, excellent professionalism and strong financial strength to grow opportunities, so that they can fully benefit from the main line of market investment. In this context, Greentown Management, with its industry-leading comprehensive strength, is expected to share more policy dividends and development opportunities. This expectation is not only reflected in its business development, but also in the performance of the capital market.
2. Multi-dimensional advantages lay the underlying logic and continue to open up new growth space
Of course, the supporting logic behind it is mainly based on the capabilities and advantages of Greentown management.
First, we continued to optimize our business structure and achieve steady growth in performance even when the industry was under pressure.
In recent years, Greentown Management has closely followed the policies and industry trends, adjusted the customer structure and business scope in a timely manner, continuously optimized the customer structure, and focused on the agency construction cooperation with the government, state-owned enterprises and local urban investment, which not only provides the company with a more stable business guarantee, but also lays a solid foundation for future growth. At the same time, the company is also making efforts in the field of financial institutions to open up a new outlet for the demand for agent construction.
According to the latest financial report data, in the first half of this year, the company achieved operating income of 1.67 billion yuan, a year-on-year increase of 7.8%; The net profit attributable to the parent company was 501 million yuan, a year-on-year increase of 5.8%. During the period, the company's gross profit margin reached 51.5%, and the net cash flow from operating activities reached 77.5 million yuan.
In the first half of the year, the real estate market was generally under pressure and adjusted, these data not only proved Greentown Management's resilience in the face of market challenges, but also demonstrated its ability to navigate the industry cycle. This may indicate that under the positive influence of today's policy and market environment, Greentown Management is expected to become the pioneer of industry recovery and take the lead in enjoying the dividends brought by the market recovery.
Second, the national layout and focus on the core economic market, brand power to shape market competitiveness.
As a leading enterprise in agency construction, Greentown Management continued to maintain its leading position in the field of real estate development services in the first half of this year, maintaining a market share of more than 20% in the agency construction industry for eight consecutive years.
As of June 30, 2024, the company's agency construction projects have been widely deployed in 128 major cities in 30 provinces, municipalities and autonomous regions in China, with a total construction area of 122.8 million square meters, an increase of 8.1% over the same period last year, and mainly focus on the core areas with great development potential and economic vitality, such as the Bohai Rim Economic Circle, the Beijing-Tianjin-Hebei Urban Agglomeration, the Yangtze River Delta Economic Circle, the Pearl River Delta Economic Circle, and the Chengdu-Chongqing Urban Agglomeration.
From another perspective, this year, Greentown Management has successively won the first place in many lists such as "2024 China's Leading Enterprise in Real Estate Agency Construction and Operation", "Comprehensive Ability of Agency Construction", "2024 Comprehensive Strength of China's Agency Construction Enterprises" and "2024 Top 10 Brands of China's Real Estate Agency Construction Enterprises". These honors not only reflect the industry's high recognition of Greentown's management qualifications, but also affirm its outstanding performance in the field of agent construction.
A series of data and rankings have strongly proved the brand influence of Greentown Management in the real estate industry, and provided a solid market foundation for the company's future business expansion.
Third, the new business opens up new growth points and strengthens market competitiveness in an all-round way.
At the same time, Greentown Management has also continued to expand and deepen its diversified customer structure and nationwide business layout to explore more business growth points.
On the one hand, the company adopts the "M mountaineering model" to serve B-end customers and ensure the fulfillment of business commitments. For C-end customers, the company has launched the "M Lucky Community", which is committed to creating a high-quality living environment. This two-pronged strategy not only enhances the company's market competitiveness, but also establishes a good brand image for the company in the industry.
On the other hand, in the first half of this year, the company's new expansion business maintained the first position in the industry, with a total contracted construction area of 17.46 million square meters of new expansion projects, an increase of about 1.1% over the same period last year, of which the government, state-owned enterprise entrusting parties and financial institutions accounted for 70.5%; The construction fee of the project is estimated to be RMB4.19 billion, of which 72.6% will be from the government, state-owned enterprise clients and financial institutions.
In terms of classification, the new business of Greentown Management is not limited to traditional residential sales, but also covers industrial parks, public rental housing, talent apartments, co-ownership housing, future communities, municipal facilities, commerce, hotels, offices and other fields. The diversified business layout can also provide strong support for the company to maintain stable growth in different market environments.
3. Conclusion
From the current point of view, Greentown Management is facing good market opportunities.
Excellent enterprises are driven by development strategies. From this point of view, Greentown Management has stepped on the main line of the industry, improved the overall quality of operation, and continuously brought new development possibilities and imagination to the new business.
As the Hong Kong stock market ushers in a new round of upward period, the market's expectations for the entire real estate industry are also rising, and we have reason to believe that Greentown Management will continue to follow the wind and bring more expectations to the market.