棚改淘金热之后的中国房地产

1、Why read this report?We analyse what the scaling back of Chinas massiveshantytownredevelopment project means for the property marketWe identify nine provinces where residential sales rely heavily on cash from shantytown compensation, and where the number of new replacement flats is being cutsharplyT

2、he developers whose landbanks have the highest exposure to lower-tier city in these nine provinces are Longfor, GZ R&F and CountryGardenMichelle Kwok*Head of Real Estate Research, Asia PacificThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:michellekwok.hk michellekwok.hk+852 2

3、996 6918Albert Tam* AnalystThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:albert.p.h.tam.hk albert.p.h.tam.hk+852 2822 4395Simon Sin* AssociateThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:simon.k.c.sin.hk simon.k.c.sin.hk+852 2996 6514Max Liang* Asso

4、ciateThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:max.liang.hk max.liang.hk+852 2996 6629Yiqin Lu* Associate Shanghai*Employed by a non-US affiliate of HSBC Securities (USA) Inc. and not registered/ qualified pursuant to FINRA regulationsFacts and figures about Chinas huge

5、shantytown projectBetween 2014 and 2020, the number of shantytown new starts is expected to reach more than 30m (source: MOHURD). We estimate that this affects more than 100m people, nearly 8% of Chinaspopulation.InvestmentinshantytownredevelopmenttoppedRMB5trnover2016-18(source:MOHURD). This repres

6、ents 40% of the value of residential housing transactions in2018.Shantytown spending in 2018 was RMB1,740bn, larger than the combined market cap of US video streaming giant Netflix Inc. and Chinas iQiyi (source:Reuters).Pledged supplementary lending (PSL), a monetary tool used to support shantytown

7、redevelopment, recorded a CAGR of 46% from 2015-18 (sources: PBoC). This is the same growth rate in terms of revenue achieved by Chinas AlibabaGroup.The number of new constructions starts related to shantytown projects was 6.26m units in 2018, about 34% of the countrys total new construction starts

8、(sources: MOHURD,HSBC).In terms of gross floor area, cash compensation offered to residents generated 19% of national sales in 2017 (sources: MOHURD,HSBC).Inventories in 80 major cities were 20% below the level in 2014 (source: CRIC).The shantytown initiative was a major factor.Inventory months in t

9、hird-tier cities declined to 9.67 months at the end of 2018, around half the level in 2014 (source:CRIC).Home prices in third- and fourth-tier cities have increased an average of 35% since 2016 (source: CREIS). Again, cash compensation from shantytown project was a majordriver.Contents HYPERLINK l _

10、bookmark0 Why readthisreport?1 HYPERLINK l _bookmark2 Chinas giant shantytown HYPERLINK l _bookmark2 programme3 HYPERLINK l _bookmark3 Relatedresearch4 HYPERLINK l _bookmark4 Life after Chinas shantytown HYPERLINK l _bookmark4 sugarrush8 HYPERLINK l _bookmark6 The worlds largest HYPERLINK l _bookmar

11、k6 redevelopmentproject22 HYPERLINK l _bookmark10 Which is the best financing HYPERLINK l _bookmark10 system? HYPERLINK l _bookmark13 Measuring therisk31 HYPERLINK l _bookmark16 Implications for the housing HYPERLINK l _bookmark16 market andourcoverage HYPERLINK l _bookmark18 Aggregateriskassessment

12、45 HYPERLINK l _bookmark19 Case study Yantai, Shandong HYPERLINK l _bookmark19 Province HYPERLINK l _bookmark24 Appendix72 HYPERLINK l _bookmark25 Disclosureappendix81 HYPERLINK l _bookmark1 Disclaimer84Chinas giant shantytown programmeShantytown redevelopment has been instrumental in driving local

13、property markets in China since 2015.However, the government is starting to cut financing, especially in lower-tier cities. We identify which provinces have the biggest sensitivity to such cuts and how exposed developers are to these regions.The nine provinces that are most heavily reliant on the sh

14、antytownprogramme, based on the size of cuts to new projects in 2019Developers landbank exposure to lower-tier cities in these provinces*64%Inner Mongolia63%64%Inner Mongolia63%Jilin82%Heilongiang52%Shaanxi67%Qinghai75%Shandong81%Guizhou77%75%ShanxiOf the nine provinces, the majority are among themo

15、st populous provinces in China or have economies that are at the weaker end of the spectrumEvergrande14.8%GZ R&F13.6% CIFI9.1%6.6%13.2%CRLand4.0%China SCE SZ Investment4.0%3.9%Vanke 2.3%COLIChina Jinmao2.1%1.5%0.4%COLI and KWGour preferred playersSino Ocean 0%KWG 0%Logan 0%Yanlord 0%in our coverage

16、universe have minimal exposureShantytown redevelopment units built, and planned across China4.7m6.0m6.1m6.1m6.3m2.8m?201420152016201720182019e2020eRMB 6.24 trillionamount China has spent on the shantytown redevelopment project since 2015*Full-year 2018 landbank data, except for Country Garden and Ev

17、ergrande (1H18). Logan excludes urban redevelopment projectCompanies not covered by HSBCSource: Company announcements, HSBC estimates100 millionthe number of people affected by the project nearly 8% of Chinas populationRelated researchRecommended reading HYPERLINK /R/20/VBqK6Kp A city-by-city debt h

18、ealth check 9 January2019 HYPERLINK /R/24/TswRBmP Joining the dots: Finding the new property hot spots 23 May2018 HYPERLINK /R/10/DsVbJj9 House of Tech 22 January2018 HYPERLINK /R/20/NvZGvFc The raven cities 11 August2017 HYPERLINK /R/10/zZPJHws Catching phoenixes 5 June2017Key reports relevant to t

19、he China Property sector HYPERLINK /R/20/gmzf7kM China Real Estate Queasy about the ride ahead 23 April 2019 HYPERLINK /R/20/mdjdcT6 KWG Group (1813 HK) Upgrade to Buy: An overlooked GBA player 11 April2019 HYPERLINK /R/20/q6tCHnK China Real Estate A boost driven by stealth policy fine-tuning 2 Apri

20、l2019 HYPERLINK /R/20/scjLJWN China Real Estate A precarious time 29 March2019 HYPERLINK /R/20/Bb2nrPJ China Overseas Land & Inv (688 HK) Buy: Better days ahead 21 March2019 HYPERLINK /R/10/VWpsxvJ China Real Estate Sticky price; sticky policy 25 February2019 HYPERLINK /R/20/DdmlhSc China Overseas L

21、and & Inv (688 HK) Buy: A stock to own in China property in201911 February 2019 HYPERLINK /R/20/2hbcKTc China Real Estate A tough case for easing 16 January2019 HYPERLINK /R/20/9XqD9Lp China Real Estate Still cautious, but less anxious 3 January2019 HYPERLINK /R/10/dFG9xZx China Real Estate 2019 Out

22、look: Sector looks cheap, but wait until1Q1911 October 2018HarbinChangchunUrumqiBaotouOrdosHohhotBeijing LangfangAnshan QinhuangdaoTangshanShenyangYingkou DalianJilinYinchuanBaoding ShijiazhuangTaiyuanTianjin Hengshui DongyingDezhouYantaiWeihaiXiningHandan ZiboLiaocheng JinanWeifangQingdaoLanzhouXia

23、nXinxiangRizhaoHezeLianyungang XuzhouXuzhouLianyungangSuqianLuoyang Zhengzhou SuqianBaojiHefeiMaanshanHuaianJiangsu ShanghaiHuaianYangzhouTaizhouMianyangYichangWuhanWuhuJiaxing HuzhouNanjingZhenjiangNantongChengduChongqingChangshaHangzhouShaoxingJinhuaNingboTaizhouChangzhou WuxiSuzhouXiangtanZhuzhou

24、NanchangFuzhouWenzhou10% or above4042%5-10%3032%0-5%2021%-5-0%510% or above4042%5-10%3032%0-5%2021%-5-0%55%less than -5%00%Total95100%GuiyangGanzhouQuanzhouKunmingLiuzhouGuilinGuangzhou FoshanHuizhou DongguanXiamenEquities Equities RealEstateMay2019NanningBeihaiZhongshan JiangmenShenzhen ZhuhaiNote:

25、 The maps shows the 95 cities where we track home price data Source: CREIS, HSBCZhanjiangSanyaHaikou55Figure 2: Cumulative average selling price (ASP) performance of cities in China (2012-17)HarbinChangchunUrumqiShenyang AnshanJilinBaotouOrdosHohhotBeijingLangfang BaodingQinhuangdaoTangshan TianjinY

26、ingkouDalianYinchuanShijiazhuangTaiyuanHengshui DongyingDezhouYantaiWeihaiXiningHandanZiboWeifangQingdaoLanzhouXianXinxiang Liaocheng JinanHezeRizhao LianyungangXuzhouXuzhouLianyungang SuqianLuoyangZhengzhou SuqianMianyangBaojiYichangHefeiMaanshanWuhuHuaianJiangsuShanghai JiaxingHuaianYangzhouTaizho

27、uZhenjiang NantongWuhanHuzhouHangzhouNingboNanjingChangzhou SuzhouChengduChongqingChangshaXiangtanShaoxing JinhuaTaizhouWuxi50% or above1718%25-50%2425%Legend 2012-17 ASP change 50% or above1718%25-50%2425%GuiyangZhuzhouGanzhouFuzhou QuanzhouWenzhouEquities Equities RealEstateMay2019LiuzhouGuilinGua

28、ngzhouHuizhou0-25%4446%0-25%4446%NanningFoshanZhongshan-10-0%77%BeihaiJiangmenless than -10%33%Total95100%ZhanjiangHaikouSanyaNote: The maps shows the 95 cities where we track home price data Source: CREIS, HSBCShenzhen ZhuhaiXiamen Shantou667Phoenix cities (20)House of Tech (14)Joining the dots (25

29、 cities + 16 Raven cities (20)Riskier cities 7Phoenix cities (20)House of Tech (14)Joining the dots (25 cities + 16 Raven cities (20)Riskier cities household debt (16)21 investable cities$ HYPERLINK /R/10/zZPJHws Catching phoenixes(5 June 2017) HYPERLINK /R/10/DsVbJj9 House of Tech(22 January 2018)

30、HYPERLINK /R/24/TswRBmP Joining the dots: Finding HYPERLINK /R/24/TswRBmP the new property hot HYPERLINK /R/24/TswRBmP spots(23 May 2018) HYPERLINK /R/20/NvZGvFc The raven cities(11 August 2017) HYPERLINK /R/20/VBqK6Kp A city-by-city debt health HYPERLINK /R/20/VBqK6Kp check(9 January 2019)Cities wi

31、th strong fundamental migration-driven demand, featuring 20 cities.Cities with tech-driven fundamentals to attract talent which drive housing demand. Weve shortlisted 14 tier-2 cities.New areas and districts being developed by the government for strategic reasons which are seen to be positive to the

32、 real estate market.20 cities facing property market risks based on migration characteristicsCities where we consider household debt levels to be high, and are at risk from to a slowdown in the housing marketAggregating our findings from the thematic reports, we created a map of 21* cities and 16 ne

33、w areas which we deem as the most investible in ChinaDongguan Xiamen Zhongshan Foshan Suzhou Tianjin Wuxi Zhuhai Zhengzhou NanjingJiaxing Changzhou Chengdu Wuhan Ningbo Quanzhou Qingdao Huizhou Zhenjiang JinanXian Chengdu Nanjing Qingdao Tianjin Wuhan ChangshaHangzhou Zhengzhou Chongqing Guiyang Jin

34、an Suzhou XiamenPudong Binhai Liang Jiang Nansha Xixian GuianQD West Coast Dalian JinpuSichuan Xiangjiang Jiangbei (NJ) FuzhouDian Changchun Ganjiang XionganYingkou Dezhou Maanshan Suqian Changchun Anshan Dongying Beihai Huaian YichangNanning Liuzhou Luoyang Guilin Zhanjiang Harbin Baoji Mianyang Ga

35、nzhou JilinZhuhai Xiamen Huaian Sanya Huizhou Hefei Zhengzhou SuzhouZhenjiang Huzhou Yangzhou Baotou Wenzhou Harbin Jiangmen DalianChangsha Changzhou Chengdu Chongqing Dongguan Foshan Guiyang Hangzhou Jiaxing Jinan NanjingNingbo Qingdao Quanzhou Suzhou Tianjin Wuhan Wuxi XianZhengzhou Zhongshan Equi

36、ties RealEstateMay2019Note: FY18 landbank data, except CG and Evergrande (1H18); Logan excludes urban redevelopment project; results of landbank exposure in 16 districts are from our findings in our thematic report HYPERLINK /R/10/TswRBmP Equities RealEstateMay2019*Companies not covered by HSBC*The

37、original list of investible cities was 25, but was subsequently refined to 21 cities due to changes in local housing market dynamics Source: Company announcement, HSBC estimatesLife after Chinas shantytownsugar rushWhat started as a social welfare programme turned into a massive boon for the propert

38、y market. The cash compensation given to residents to move out of old, run-down properties pushed up sales volumes and prices as millions of people bought new homes. But now the government is scaling back the shantytown programme to help keep a lid on the frothy residential market. The impact will b

39、e biggest in smaller cities, the focus of shantytown redevelopment. Inthisreportweidentifynineprovinceswheresalesrelyheavilyon cash from shantytown compensation, and where the number of new replacement flats is being cut sharply. We identify the developers with the highest exposure to theseprovinces

40、.The going gets tougherThis report looks at another risk the scaling back of the vast shantytown redevelopment projectWe have written a series of reports in the past two years identifying investment opportunitiesin Chinas sprawling property market. As the real estate market started to cool, we have

41、shifted the focus to assessing which cities face the highest risk in the event of a correction in house prices. In January, we looked at the level of household debt and how dependent city economies were on the property sector for raising revenue (see HYPERLINK /R/20/VBqK6Kp A city-by-city debt healt

42、h check, published on 9 January 2019).This report looks at another risk the scaling back of Chinas vast shantytown redevelopment project. The project has had a huge impact on the residential property market, especially in lower-tier cities. The main catalyst was the decision taken in 2015 to pay cas

43、h compensation to many more shantytown residents rather than local governments allocating them alternative accommodation. This allowed them to buy modern flats, pushing up prices and sales volumes. But the government is applying the brakes, especially in cities where property markets are still hot,

44、where it is scrapping or cutting the cash subsidies that allow residents who move out of shantytowns to buy new properties. Effectively, what drove the housing market recovery in 2016 is set to cause a market downturn in 2019.In this report we forecast that:The number of new start flats related to s

45、hantytown projects will fall 54% to 2.85m units in 2019, according to the figure released by Ministry of Finance (MoF) and Ministry of Housing and Urban-Rural Development(MOHURD).Based on our sensitivity analysis, a 10ppt decline in cash compensation ratio to 40% (from 50% in 2018e) imply a 2ppt low

46、er shantytown contribution to our base case national sales volumeforecast.Shandong, Henan, Inner Qinghai andare the provinces more at risk from a shantytown-related slowdown in the housingmarket.Longfor is most exposed to these provinces, followed by Guangzhou R&F and Country Garden; Longfor and Cou

47、nty Garden are Hold Rated while R&F is BuyRated.Note that in this report we do not change any estimates, ratings or target prices for the companies under our coverage.A real estate market underpinned by one massive projectThe project started to take on far greater significance after 2015A key part o

48、f the Chinese economy, the real estate market has been used as a policy tool to drive economic growth. In the latest property market upcycle since 2016, the shantytown redevelopment project played a significant role in the growth of residential market. In broad terms, the definition of a shantytown

49、includes slums and rundown, older buildings in urban areas, as well as buildings in industrial and mining areas used by state-owned enterprises.to to to to in in in in The scale of the project is vast. RMB6.24trn around USD900bn at todays exchangerate has been spent since 2015 on tearing down 18.2m

50、dilapidated, often illegal housing units in downtown areas and providing compensation to residents. And theres still a long way to go. The target is to build another 15m units during 2018-20; starts were made on 6.3m units in 2018, with the balance to be completed by 2020.However, last year China be

51、gan scaling back targets for the number of new flats to be built as part of this programme and also cut the amount of compensation paid to residents to buy new homes. Inevitably, this has negative implications for the housing market, particularly in regions that have become particularly dependent on

52、 the shantytown programme to support their real estate markets since 2016. Sales volumes have already started to fall in some areas.Figure 4: Key policies relevant to shantytown redevelopment after 2015State Council issued the opinion on shantytown redevelopment. The opinion set out the three-year t

53、arget of 18m construction starts for shantytownredevelopment projects inState Council issued the opinion on shantytown redevelopment. The opinion set out the three-year target of 18m construction starts for shantytownredevelopment projects in2015-17.The opinion clearly specified that the scale of sh

54、antytown redevelopment should be enlarged and construction start should beaccelerated.Beijing also encouraged various funding model for shantytownredevelopment including government purchase model andPPP.MOHURD issued the notice to encourage cash compensation forshantytown redevelopment and set monet

55、isation ratio to be higher than50%.2016 government work report sets shantytown new start target at 20m units as part of the13th Five-yearPlan.The government work report also encourages higher shantytowncash compensationratio.ofofbyTargetof5.8munitsofshantytownredevelopmentnewflatswasmentionedinthe 2

56、018 government workreport.May-2017StateCouncilMar-2018NPCAug-2015MOHURDMar-2016NPCJun-2015StateCouncilHeatingThe approval for shantytown project funding was revoked to CDBs head office fromlocalThe approval for shantytown project funding was revoked to CDBs head office fromlocalbranches,indicatingth

57、escalingdownofshantytownfundingandcash compensationscheme.MoFissueddraftofcommentonregulatinggovernmentpurchase.Itlimitedthe length of services purchased by government to be within threeyears.Special treatment of shantytown redevelopment was notmentioned.DuringtheexecutivemeetingheldbyStateCouncil,S

58、tateCouncilcalledforcities with low housing inventory and upward pressure on housing prices to terminate cash compensation for shantytown redevelopmentprojects.Stringent standards should be applied when selecting shantytownprojects.During the meeting held by MOHURD with representatives from NDRC, Mo

59、F and PBoC, it is agreed that government purchase model on shantytown projects would not be allowed in 2019 and local government would need to issue project bond for shantytown projectinstead.New start target of shantytown redevelopment was not mentioned in2019 government workingreportAccordingtothe

60、noticereleasedonsocialhousingbudgetjointlyissuedbyMoF and MOHURD, 2019 shantytown redevelopment target is set at 2.85munits.Apr-2019MoF,MOHURDMar-2019NPCOct-2018MOHURDOct-2018StateCouncilJun-2018MoFJun-2018CDBCoolingScreening for provinces that rely on shantytown spendingIn November 2018, MOHURD rei