Sinolink: Top 100 real estate companies in 2024 are expected to stabilize in size, with state-owned enterprises leading the market.

Sinolink releases research report, stating that with the release of policy effects, it is expected that the transaction volume of commercial housing in 2025 will stabilize and gradually boost market confidence, reversing the expectation of declining house prices. Looking back at 2024, the overall heat of the Chinese real estate market has declined compared to previous years, with no sign of stopping the decline, but state-owned enterprises have remained relatively stable. In the Top 10, Top 30, and Top 50 real estate companies, state-owned enterprises dominate, while the market share of private enterprises continues to decline. It is recommended to continue to focus on stable operations and policy-sensitive targets. Sinolink's main points are as follows: Overall sales situation: The scale has not stopped declining, and state-owned enterprises are relatively stable In 2024, the overall heat of the Chinese real estate market has declined compared to previous years. According to data from CRIC, the total sales of the top 100 real estate companies in 2024 amounted to 4.2 trillion yuan, a year-on-year decrease of 30.3%. Starting from the peak of 13 trillion yuan in 2020, market sales have been declining for four consecutive years, with a cumulative decline of 67.9%. After four years of decline, the competitive situation in the Chinese real estate market has further highlighted the stable position of state-owned enterprises, and market differentiation has become more pronounced. Among the top 20 real estate companies in terms of sales in 2024, state-owned enterprises such as Poly Developments and Holdings Group, China Overseas Land & Investment, and CHINA RES LAND continue to dominate and have seen their rankings improve. In terms of changes in sales, key real estate companies experienced an expanding decline in 2024 year-on-year, but some companies performed well, such as China Overseas Land & Investment achieving the only positive year-on-year growth in sales and Sunac China Holdings narrowing its decline year-on-year. Overall average sales price situation: The upward trend in prices remains unchanged, with some real estate companies performing well Driven by the entry of high-quality improvement projects, the overall average sales price of the top 100 real estate companies has been on the rise, increasing from 17,900 yuan per square meter in 2023 to 18,500 yuan per square meter in 2024, a year-on-year increase of 3.09%, but lower than the 10.83% growth in 2023. Looking at the national level, the year-on-year decline in house prices in 70 major cities continued to expand in 2024, putting pressure on new home prices in this context. In terms of the rankings of real estate enterprises in terms of the overall average sales price, Hangzhou Binjiang Real Estate Group maintained the industry's top position, with an average sales price of 47,300 yuan per square meter in 2024, significantly higher than other companies. In addition, 8 companies had sales prices exceeding 20,000 yuan per square meter, and 5 companies had sales prices exceeding 10,000 yuan per square meter. YUEXIU PROPERTY and China Overseas Land & Investment have seen their overall average prices rise year by year due to maintaining a high proportion of development in first and second-tier cities. Analysis of the share structure of companies in different echelons: State-owned enterprises dominate, while the market share of private enterprises continues to decline In the Top 10, Top 30, and Top 50 real estate companies, the market share of state-owned enterprises has been rising in recent years. In 2024, state-owned enterprises accounted for 55.82%, 52.28%, and 47.74% of the market share in these three echelons, occupying a dominant position in the market; state-owned enterprises have been stable in recent years, benefiting from their relatively strong foundation, occupying 17.71%, 12.91%, and 14.92% of the market share in these three echelons; due to some real estate companies experiencing default events, the market share of private enterprises has significantly declined in recent years, dropping rapidly from a peak of over half in 2019 to less than 10% in the Top 10 in 2024; the share of mixed-ownership enterprises has fluctuated greatly, ranging from 15% to 30% in recent years. Sales threshold of top 100 real estate companies: Continuously decreasing number of billion-yuan real estate companies, state-owned enterprises remain the main force In 2024, affected by the overall downturn in the industry, the sales threshold of the top 100 real estate companies continued to decrease, and the thresholds of each echelon reached their lowest level in recent years. Among them, the sales threshold of the top 10 real estate companies decreased by 31.3% to 105.44 billion yuan. The thresholds for the top 30 and top 50 real estate companies also decreased by 33.8% and 43.8% to 34 billion yuan and 15.48 billion yuan respectively. The sales threshold for the top 100 real estate companies decreased by 40.3% to 8.45 billion yuan. Looking at the number of real estate companies meeting the sales threshold in 2024, there were no companies with sales over 500 billion yuan, 2 companies with sales over 300 billion yuan, and a further reduction in the number of billion-yuan real estate companies to 11, a number similar to that of 2016. It is worth noting that during the real estate downturn in 2022-2023, there were still 4 companies that entered the 300 billion sales threshold, but in 2024, only Poly Developments and Holdings Group and China Overseas Land & Investment met the criteria. This reflects the fact that the industry downturn for three consecutive years has raised higher requirements for the investment capabilities of leading real estate companies. If the supplement of new land values is insufficient and the number of new projects introduced to the market is insufficient, real estate companies will face significant pressure in maintaining a certain level of sales volume. Investment recommendations It is recommended to continue focusing on stable operations and policy-sensitive targets: For property development companies, it is recommended to focus on developing in first-tier and core second-tier cities, emphasizing improvement products, and having the ability to continuously acquire land, such as GREENTOWN CHINA (03900), China Merchants Shekou Industrial Zone Holdings (001979.SZ), Hangzhou Binjiang Real Estate Group (002244.SZ), etc. For intermediaries, it is recommended to focus on BEKE-W (02423), a platform with core competitiveness benefiting from the continuous implementation of favorable policies and increased activity in the primary and secondary housing markets; for property management, it is recommended to focus on CHINA RES MIXC (01209), a stable development of property management and absolute leader in commercial management that actively distributes dividends. It is also suggested to pay attention to property and construction companies with significant local government receivables, city investment companies benefiting from local debt, flexible targets for mergers and restructurings, and state-owned property and construction companies trading below net asset value.Risk warning: Loose policies have not effectively boosted the market; third and fourth-tier cities have weak recovery momentum; real estate developers are defaulting on their debts."Bonjour, comment a va ?" "Hello, how are you?"