The real estate sector rose sharply last week, and the 100-stock index rose by 3.28%.

Last week, driven by the surge in Hong Kong stocks and real estate sectors, the Nikkei 100 Index rose 3.28% again.

After the cumulative increase of 14% in the past four weeks, the 100-index of each Nikkei brand returned to 959.79 points, and at the same time, the sword pointed to the thousand-point mark, and it also moved towards a new high in listing.

Every 100-stock index rises for two weeks in a row.

Last week, the favorable policies continued to stimulate, and the real estate sector ushered in a long-lost surge, but other sectors performed generally, resulting in the failure of the three major A-share stock indexes to close up. As of May 17, last week, the A-share Shanghai Composite Index fell by 0.02% to close at 3,154.03 points. Shenzhen Component Index fell 0.22% to 9709.42 points; Growth enterprise market index fell 0.70% to close at 1864.94 points. Driven by the surge in Hong Kong stocks and real estate sectors, the Nikkei 100 Index rose 3.28% to close at 959.79 points. After rising for two weeks in a row, the 100-point index of each brand has reached the thousand-point mark.

Yang Jing cartography

From a fundamental point of view, the total retail sales of social consumption in April was 3,569.9 billion yuan, a year-on-year increase of 2.3%; Industrial added value increased by 6.7%; The national investment in fixed assets increased by 4.2% year-on-year. In terms of fields, infrastructure investment increased by 6.0% year-on-year, manufacturing investment increased by 9.7%, and real estate development investment decreased by 9.8%.

On the whole, from April, the investment side, new quality productivity led to a strong manufacturing industry; The slow issuance of government bonds has slowed down infrastructure investment slightly, and the weakness of real estate consumption and investment has continued; On the consumption side, there are bright spots in household consumption, but the trend of slowing growth has not changed; External demand export provides positive contribution to China’s economic growth; Industrial production further accelerated year on year. The weak demand and strong supply in some industries still need to be improved. Real estate "combination boxing" injects confidence into the market, and "reflation" may continue to pay attention to the reduction of LPR interest rate, the accelerated issuance and use of government bonds, and further increase the issuance.

Generally speaking, since 2024, the domestic economic prosperity has continued to improve, the retail sales of social consumer goods have grown steadily, and the issuance of ultra-long-term special government bonds will form a certain support for economic construction, which is expected to eliminate some investors’ concerns about the slowdown in economic growth. In addition, the Federal Reserve showed a neutral bias at the meeting on interest rates in May, clearly slowed down the process of shrinking the table, superimposed non-agricultural employment data was less than expected, and the labor market cooled down. These factors will have a positive mapping on the domestic capital market and help promote the return of foreign capital to A shares.

In addition, the CSRC has repeatedly investigated and dealt with illegal activities such as illegal reduction, market manipulation and insider trading, forming a high-pressure and strict management situation, and at the same time strengthening the accountability of intermediaries to achieve "comprehensive supervision without leaving a dead end". The linkage between securities regulatory authorities and other law enforcement agencies tends to be closer, and a three-dimensional accountability mechanism has gradually taken shape. These measures are conducive to protecting investors’ rights, enhancing investors’ confidence in the securities market, thus improving the vitality of the securities market and giving full play to the functions of the capital market.

The real estate sector gained the most.

Judging from the performance of the components of the 100-per-brand index last week, the real estate sector rose far ahead, with six real estate stocks rising more than 10%. Among them, Longhu Group increased by 21.82% per week, Vanke A increased by 19.05%, and China Merchants Shekou and Poly Development Week both increased by more than 15%.

According to public information, in 2023, facing the new situation that the relationship between supply and demand in China real estate market has undergone major changes, Longhu Group took the initiative to adjust around the core strategy of high-quality development. Under the new situation, Longhu Group adheres to the core regional layout of key cities, adheres to productism, and pays attention to the balance between quantity and price and the realization of investment. In 2023, the total construction area of properties delivered by Longhu Group was 10.708 million square meters, and a total of 140,000 suites were delivered, 20% of which were delivered more than one month in advance. Relying on the "new heart-to-heart" intelligent delivery system, Longhu Group has continuously focused on the real needs of customers, upgraded the user experience, and continuously improved the delivery satisfaction throughout the year.

Similarly, thanks to the favorable policy support of the industry and the intelligent and refined operation and management capabilities, Longhu Guanyu, a long-term rental apartment brand, has developed steadily and has opened a total of 123,000 houses. At the same time of business development, Guanyu intensively cultivated products and services, and continuously upgraded the rental experience. The rental rate of houses opened for six months or more increased to 96.4%, and the rental income increased by 13% year-on-year to 2.93 billion yuan, leading the industry in profitability.

China Merchants Shekou was founded in 1979. After the merger and listing in 2015, it integrated the high-quality real estate resources within the group and grew into the fast lane. In 2018, we will promote organizational reform and use the "large-scale system" to slim down the headquarters and achieve flat and efficient operation. In the same year, Jiangnan, Southwest, Hainan and Southeast were added. After 2019, the establishment of holding business departments will be increased. In 2020, China Merchants Management and China Merchants Yidun will be established. In 2021, China Merchants Cruises and China Merchants Guanyi will be added, and professional companies will operate diversified businesses independently.

As a leading state-owned enterprise in the real estate industry, China Merchants Shekou has a large land reserve. After the land reserve in the core location is developed, it will strongly support future income and profit. Since 2021, the valuation has been continuously restored, and the investment value of state-owned enterprises has become prominent.

Real estate ETF deserves attention.

In addition to the outstanding investment value of individual stocks, ETFs related to the real estate industry are also worthy of attention.

At present, there are four products that are highly related to the real estate industry in the A-share market, including the Southern CSI All-Share Real Estate ETF, Huaxia CSI All-Share Real Estate ETF, Yin Hua CSI Mainland Real Estate Theme ETF, and Huabao CSI 800 Real Estate ETF, which tracks CSI 800 Real Estate Index.

From the perspective of investment logic, last Friday, the high-level meeting pointed out that in cities with more commercial housing stocks, the government can order and purchase some commercial housing as affordable housing at reasonable prices; The central bank canceled the lower limit of the first and second sets of commercial loan interest rates, while the two departments lowered the first and second sets of down payment ratios.

The down payment ratio and mortgage interest rate are just one of the tools. The strength, rhythm and method of "purchasing and storage" will continue to be detailed to make it clear that the "old-for-new" type of purchasing and storage may be more reasonable. At present, there is still room for many parties to continue to increase leverage. The strength of purchasing and storage and more policies are worth looking forward to.

Therefore, with the care of demand-side policies, the supply-demand structure of the industry is expected to be significantly improved. At present, the real estate sector is still in a state of low valuation and low position, and the market of the sector has just begun.

It is understood that both the real estate ETF(512200) and the real estate ETF Huaxia (515060) track the CSI all-index real estate, which selects the real estate industry stocks in the sample stocks of CSI all-index to reflect the overall performance of the real estate industry stocks. It is worth noting that the market value distribution of the index’s constituent stocks is both offensive and defensive. At present, the valuation is in a historically low position, with high intrinsic value and stable medium-and long-term development logic.

The real estate ETF(159768) tracks the CSI mainland real estate theme index. The index was released on October 28th, 2009, and selected the securities of listed companies in Shanghai and Shenzhen stock markets related to residential development, commercial real estate, industrial real estate, property management and other real estate topics as the index samples, which is a popular tool for one-click layout of the real estate sector.

Judging from the heavyweights of China Securities Mainland real estate theme index, Poly Development, China Merchants Shekou and Vanke A accounted for 45%. These three heavyweights are all 100-index constituents of each brand, which has the significance of covering investment.

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