The "Three Red Lines" Of Yellow And Green Real Estate Enterprises Actively Replenishing Positions Lead To The Differentiation Of Real Estate Enterprises' Land Storage

At the end of the year, the well-off housing enterprises were busy taking land, while those in short supply were busy financing.

A few days ago, according to the National Bureau of statistics, the sales of commercial housing in 2020 will reach 17361.3 billion yuan, an increase of 8.7%. Sales maintain a high level, land acquisition has become the main topic of real estate enterprises. On the whole, land acquisition by real estate enterprises is still related to the return of funds. Poly, country garden and Vanke rank among the top three in 2020. In 2020, poly will occupy the first place in the list with the accumulated added value of 509.8 billion yuan, followed by country garden and Vanke, with the accumulated added value of 502.6 billion yuan and 475.4 billion yuan respectively.

As a matter of fact, green and yellow real estate enterprises have been keeping a positive momentum of land acquisition since December 2020. For example, in January 2021, green city China (3900. HK), a yellow file real estate enterprise, acquired 9.71 billion yuan of land in Hangzhou.

The new regulation of bank housing loan superimposes the previous "three red lines", and it is expected that the financing environment of real estate enterprises will maintain a tight balance in 2021. In the past 2020, the sales of top 20 real estate enterprises were good, and some real estate enterprises with small capital pressure rebounded in 2021.

According to the data of Shell Research Institute, the land acquisition amount of top 50 real estate enterprises will still occupy 50% of the whole market in 2020. From the regional perspective, the top five cities that real estate enterprises pay most attention to are Suzhou, Nanjing, Chengdu, Hangzhou and Ningbo. Wuhan, Chongqing, Xi'an and other cities are also very hot.

Xie Yangchun, an analyst at Kerui Research Center, pointed out that after the "three red lines", the land acquisition efforts of red and orange real estate enterprises decreased significantly, while nearly half of the yellow and green enterprises accelerated land acquisition, and the investment amount increased by 50%.

Differentiation of land acquisition

Ping An Securities data show that at the end of last year, land supply decreased, transaction growth. Among them, the average land transaction price of first tier cities increased month on month, while that of second tier and third tier cities decreased.

In December 2020, the construction area of land supply in 100 cities is 120 million square meters, a decrease of 48.7% on a month on month basis, and the construction area of 190 million square meters is increased by 85.8% on a month on month basis; in December, the construction area of the first and second line land transactions accounted for 52%, an increase of 10 percentage points on a month on month basis.

It is worth mentioning that the financial attributes of the third and fourth tier cities are weakened with the overdraft of demand and stable housing prices, and the subsequent adjustment pressure is greater. In the medium term, the trend of Housing enterprises returning to the core urban circle is expected to continue. This is a window period. The real estate enterprises with capital ability are now inclined to soil storage in the five major cities. Other green real estate enterprises such as Jindi (600383. SH) and poly (600048. SH) have higher land storage strength than the average level of the whole year from September to December in 2020. For the Yellow real estate enterprises like Greentown, after deducting the advance collection, the asset liability ratio is 74%, which is slightly higher than the standard of 70%. Therefore, this real estate enterprise also has a very strong willingness to make up positions.

At the same time, some real estate enterprises did not take land for three consecutive months after the release of the red line policy, such as Xinli (02103. HK), time China (01233. HK), and Jinyu (02009. HK).

From the perspective of land storage layout, yellow and green real estate enterprises actively replenish the first and second tier cities, and the proportion of transactions in the first and second tier cities after the "three red lines" slightly increased by 2 percentage points.

One of the main characteristics of this round of land storage is to select deep ploughing areas and core hot cities. For example, hejingtaifu (01813. HK), Jianye (00832. HK) and Zhong'an (00672. HK) focus on Guangzhou, Henan and Zhejiang respectively.

The national scale real estate enterprises focus on the first tier cities and many second tier cities such as Hangzhou, Wuhan, and the provincial capitals of central and Western China. China Resources, Vanke and poly accounted for 6%, 41% and 54% of the land use amount in the third and fourth tier cities from September to December in 2020.

Some enterprises choose cities and regions with relatively large advantages to further fill their positions. For example, Yajule has added warehouses in Guangzhou and Yunnan. On the one hand, the headquarters of the enterprise is located in Guangzhou, which has a certain geographical advantage. On the other hand, the enterprise has successful experience in tourism real estate and has a certain market foundation in Hainan and Yunnan.

Shell Research Institute combed the interim report of real estate enterprises in 2020, and found that the amount of land acquired by the sample real estate enterprises increased by 29%, which was 50% lower than that in the same period of last year.

It is worth noting that while adjusting the urban land storage, enterprises should not forget to adjust the organizational structure to match the situation of soil storage and realize the most efficient operation. For example, at the beginning of January this year, Xincheng Holdings (601155. SH) announced the change of its president, and at the same time, it also carried out a new round of regional restructuring, with the original 19 regional companies turning into 14 regional companies; Xiangsheng (02599. HK) also split the central China region according to the land reserve distribution and strategy, and made small organizational changes; Xinli (02103. HK) integrated Shenzhen Dongguan Hui and Zhongshan branches into Dawan district board Green Land Hong Kong (00337. HK) has also integrated its business in Dawan district.

Profit margin narrowed

Although a lot of adjustment work has been done, the overall profit of land development of real estate enterprises is still shrinking under the change of environment.

Generally speaking, according to the ratio of the floor price to the surrounding house price and the difference between the floor price and the surrounding house price, the profit space after the transaction can be roughly judged. Therefore, kerrui research center roughly classifies the profit space of the plots taken by the model real estate enterprises since 2020.

In the land storage situation in 2020, about half of the land plots of real estate enterprises have relatively good profit space, but the proportion of these plots will drop by 9 percentage points, accounting for only 18%; the proportion of plots with general and poor profit space will increase by 4%; the proportion of plots with relatively dangerous profit space will account for about 15%, mainly distributed in some third and fourth tier cities, and the floor price and surrounding price are only 3000-4000 yuan/ The gap of square meters leaves very little space for other costs.

In this regard, Xie Yangchun, an analyst at Kerui Research Center, points out that there are two main reasons: first, although the red and orange real estate companies have reduced their land acquisition efforts, the land transfer price has not decreased, and the actual land price has not been reduced; second, from the supply level, the supply and demand ratio of high-quality land plots has fallen again, and the high-quality residential land is still in the situation of "more monks and less employees", and the real estate enterprises should be low It is still very difficult to obtain high-quality land at a price.

Xiao Yunxiang, a senior analyst at Tongce Consulting Research Institute, pointed out that the overall supply of the third and fourth tier cities is relatively large, and the demand is weakening under the tide of shed reform, and the industry will face the risk of rapid decline of sales in the third and fourth tier real estate market and some projects will be unfinished. In addition, financial supervision, early release of real estate market demand, and the impact of the epidemic on the sales of real estate enterprises, if the subsequent recovery of the real estate market is not sustainable enough and the demand release is lower than expected, there will be further price exchange for volume to increase demand in the future, which will bring large-scale impairment risk of real estate enterprises.

Under the market changes, there are also real estate enterprises actively adjust the land acquisition mode from 2017 to 2019 in 2020. For example, Zhongliang (02772. HK), Xiangsheng and others put forward the goal and planning of returning to the first and second tier cities in 2020. From 2017 to 2019, Jianye, Rongsheng development (002146. HK), Xiangsheng, etc. accounted for more than 70% of the land in the third and fourth tier cities. Zhongliang is a typical real estate enterprise that has deeply cultivated the third and fourth tier cities. In 2020, Zhongliang will actively adjust the soil storage mode, hoping to adjust the soil storage to 90% of the second and third tier cities and 10% of the fourth tier cities. But now, the effect is not obvious.

?