The three departments of the China Securities Regulatory Commission stated: support private housing enterprises to issue bond financing.

The new development model of the real estate industry was once again proposed by the central government. Support policies for listed companies are expected to be introduced more.

On April 1 1, CSRC, SASAC and the All-China Federation of Industry and Commerce issued the Notice on Further Supporting the Healthy Development of Listed Companies (hereinafter referred to as the Notice). The two key points in the Notice convey more positive confidence and good expectations to the market: First, adhere to the principle of "staying in houses without speculation", support listed real estate enterprises to actively transform and develop new models according to laws and regulations, pay close attention to market situation and industry changes, and promote a virtuous circle and healthy development of the real estate industry; Second, adhere to the principle of "two unswerving", treat all kinds of market players equally, support private enterprises to go public for financing and mergers and acquisitions according to law, and improve the bond financing support mechanism for private enterprises.

The market generally believes that this notice is a concrete implementation of the spirit of the recent the State Council executive meeting and the the State Council Finance Committee meeting, further supporting the development of listed companies and maintaining the stability of the capital market. It is expected that relevant policies will be introduced in the future to ease the debt pressure of housing enterprises.

At the end of last year, the Central Economic Work Conference first proposed that the real estate industry "explore new development models", and this year's government work reports of the National People's Congress and the National People's Congress clearly pointed out that "explore new development models, adhere to both rent and purchase, and accelerate the development of the long-term rental market". On March 16, the State Council Finance Committee emphasized that real estate enterprises should pay close attention to research and put forward effective risk prevention and resolution schemes, and put forward supporting measures for the transformation to a new development model. On the same day, the CSRC stated that it actively cooperated with relevant departments to effectively resolve the risks of real estate enterprises.

Bai Wenxi, chief economist of IPG China, believes that the new development model is a new development model with the aim of "staying in the house and not speculating", abandoning the original high-debt, high-leverage-supported high-turnover model, adapting to market demand, focusing on cash flow management, aiming at the healthy and sustainable development of enterprises, striving for product innovation and management innovation, and moderately improving market concentration, which is also the direction of the transformation and development of housing enterprises in the new stage.

Liu Shui, research director of the Enterprise Division of the Central Reference Institute, believes that the notice proposes to support listed real estate enterprises to transform into a new development model. Agent construction, leasing, urban renewal, asset-light strategy and asset management are all important directions of the new development model, and these areas will be supported by key funds.

Ma Hong, a senior researcher at Trust Investment Research Institute, believes that the Notice will play a positive role in solving the current financing difficulties of private housing enterprises. It is expected that in 2022, more high-quality housing enterprises will use direct financing tools to ease the pressure of cash flow and debt repayment. Ma Hong suggested increasing direct financial support for high-quality housing enterprises, including central enterprises, state-owned enterprises and private enterprises.

Capital market support

The "Notice" released a positive signal to real estate enterprises. Exploring new development models forces real estate enterprises to re-examine the risks accumulated by the expansion model with high leverage, high turnover and high debt in the past, and seek new growth points and new business models. The general manager of a real estate securities center said, but this does not mean that the most dangerous moment in the real estate market has passed.

Zheshang Securities believes that in the process of supporting the transformation of listed real estate enterprises to a new development model, support from industry equity, debt financing and merger and acquisition industry integration will follow up.

Ma Hong believes that the main tone of the notice is warm, and in the context of "staying and not speculating", it seeks solutions for private housing enterprises. The so-called new development model is mainly based on the consideration of long-term development, guiding housing enterprises to make efforts in reducing costs and increasing efficiency, and gradually changing financing channels to realize the transformation of housing enterprises to specialized, low-leverage and diversified financing. In the future, the development mode of high quality, high efficiency and low debt will become the new mainstream.

A real estate observer believes that the notice regards real estate enterprises as problems, which means that the importance of real estate enterprise problems has increased. According to the policy release of the demand side and the loose adjustment of the financing side, the cash flow of housing enterprises will be improved, and the detailed support of mergers and acquisitions will accelerate the risk clearing. Housing enterprises should conform to the policy and industry trends and seek the second growth curve in real estate agency construction, asset management, REITs and other businesses.

Private housing enterprises will issue more bonds.

In the past 202 1 year, the default amount of real estate enterprises was $24.478 billion, involving 55 defaulted bonds. Frequent debt defaults and tight cash flow in the industry make it more and more difficult for housing enterprises to raise funds in the bond market.

According to the research data of Central Reference Institute, from June to March, 2022, the total amount of credit bonds issued by housing enterprises was1162.9 billion yuan, down 32.7% year-on-year; The total amount of overseas bonds issued was 1, 24 1 billion yuan, down 89.8% year-on-year. Structurally, credit bond financing accounted for 90.4%, up 3 1.7 percentage points year-on-year, and became the absolute main force of housing enterprise bond financing.

"This does not mean that the financing of the real estate industry is completely open, and the refinancing of the open market is still under great pressure. The overall market needs at least three to five months to restore and rebuild confidence. " An executive of a real estate enterprise in East China believes that most of the policies are "rectification", and stable financial management with "housing and not speculation" as the core is still the main tone. In the face of the company's liquidity problems, the first choice at present is to sell assets and withdraw funds.

In fact, in the first quarter, high-quality private housing enterprises have begun to obtain financing support and participate in the M&A camp. Ping An Bank, Shanghai Pudong Development Bank and Postal Savings Bank actively signed M&A financing strategic cooperation agreements with real estate enterprises. According to incomplete statistics, up to now, the financing amount released by real estate M&A through various channels has exceeded 654.38+05 billion yuan.

Bai Wenxi believes that whether housing enterprises can really get out of the predicament this year requires a comprehensive recovery of industry confidence and market confidence. Housing enterprises that have escaped from danger may eventually be market-oriented restructuring or bankruptcy liquidation.

The reporter noticed that the four major asset management companies (AMC) in China have also started to "run" into the market, and they have rescued housing enterprises from difficulties through two modes: light assets and heavy assets, including Caesar, Aoyuan, Evergrande, Huaxia Happiness, Fantasia Year and Sunshine City.

Liu Shui believes that because the real estate market is not expected to improve significantly, the risk aversion of financial institutions is still very heavy, and overall, the real estate risk clearing is slow. The "Notice" clearly improves the bond financing support mechanism of private enterprises, which means that the bond financing of private housing enterprises will be supported, which is conducive to alleviating the financing difficulties of private housing enterprises and stabilizing enterprise expectations. At present, a considerable number of housing enterprises with debt defaults are listed private housing enterprises. Support the merger and reorganization of private listed enterprises, and speed up the risk clearing of debt default housing enterprises.

Konka, the founding president of Huaxia New Supply Economics Research Institute, said that China's real estate policy has become loose and the industry is in the process of repair. The real estate market will pick up in the second half of this year, but it is still far from "hot", and there will be no "roller coaster" swing like previous rounds of regulation. I hope that in this round of expected good real estate market adjustment, with the gradual warming of the market, we should seize the innovation of relevant basic system construction, treat both the symptoms and root causes, and pursue "treating both the symptoms and root causes" to form a long-term mechanism for the healthy development of the real estate industry.