The Zhitong Finance App learned that Shen Wan Hongyuan released a research report saying that the real estate sector reports continued to be under pressure, housing prices in core cities stabilized, and maintained an “optimistic” rating. The bank believes that the existing housing sales system is a major reform of the real estate development model, which will push housing enterprises back from the financial model to the manufacturing model; after the new deal, the supply of new housing will shrink significantly, compounding the mid-term peak and fall in second-hand housing listings, which will jointly drive the resounding decline in property market supply, but demand is strongly supported, promoting the improvement of the relationship between supply and demand, and further strengthening the bottom of housing prices in core cities such as Shanghai; although housing enterprise operations will be pressured in stages, housing prices in core cities will stabilize, and concentration will jump, and equity and bond financing will help high-quality enterprises grow. Furthermore, the replacement of second-hand housing with new housing has increased, and the increase in penetration rate is beneficial to intermediaries.
Shen Wan Hongyuan's main views are as follows:
The 26H1 sector's revenue declined, gross margin increased slightly, rates increased, the share of depreciation declined, and performance declined
The 26H1 sector's revenue was -21.9% year-on-year, compared to 25-4.8pct; judging from the housing enterprise structure, revenue growth rate: first-tier -16% > third-tier 27% > second-tier -29%. 26H1 net profit was -10% year-on-year, compared to +59pct in 25 years. The average performance of all tier housing companies experienced losses, but losses narrowed; due to poor settlement, slight increase in gross carry-over margin, rate increase, and decline in the share of impairment; from the perspective of housing enterprise structure, performance growth rate: second-tier +33% > third-tier -24% > first-tier -30%. Looking ahead, judging that housing prices in Shanghai have bottomed out at the beginning of 2026. In August, Beijing and Shanghai introduced new property market policies one after another, exceeding expectations, which will consolidate the bottom of core cities and determine that there is still room for optimization; 8.28 The existing housing sales system is a major reform of the real estate development model, which will push housing enterprises to return from the financial model to the manufacturing model; after the New Deal, the supply of new housing will shrink significantly, but demand is strongly supported to promote the improvement of the relationship between supply and demand, and further strengthen the establishment of the bottom of housing prices in core cities such as Shanghai. The overall forecast is that the 2026-27 sector performance is expected to fluctuate from the bottom to a weak recovery, and performance differentiation will further intensify.
26H1 gross margin increased, negative net margin narrowed, three rates increased, and the proportion of impairment decreased
The gross profit margin of the 26H1 sector is 15.3%, +1.0pct compared to 25 years, due to the fact that housing enterprises generally lag 2.5-3 years behind land acquisition. Currently, old goods from 21 years and before are still in the stage of continuous price reduction and removal, and there is still a risk of impairment accrual; from the perspective of housing enterprise structure, gross profit margin: third-tier 21% > second-tier 18% > first-tier 12%. The 26H1 tripartite cost rate was 12.9%, +2.3 pct over 25 years. 26H1 minority shareholders had a profit and loss ratio of 0.6%, and the numerator denominator was negative; impairment losses accounted for 0.5% of revenue, -3.1 pct year on year. The combination of a slight increase in gross margin, an increase in expense ratio, and a decrease in the share of impairment losses led to 26H1 net interest rate rising to -6.8%, +7.6pct compared to 25 years; from a structural perspective, net interest rate: second-tier -6.0% > third-tier -6.4% > first-tier -7.4%. Looking ahead, it is expected that the gross margin and net margin of the sector will remain weak in '26, but profit margins are bottoming out, and a few high-quality enterprises will improve. In '27, the sector began to settle the 24-25 Good House Phase Project, and it is expected that the sector's gross margin will improve.
The net debt ratio increased at the end of 26H1, net debt increased, net assets declined, and the short-term cash debt ratio declined, and the financial situation was still under pressure
The balance ratio of the final sector of 26H1 was 73.3%, compared to the end of 25 - 0.1 pct; the debt ratio after payment was 70.4%, the same as at the end of 25; the net debt ratio was 94.9%, +1.7 pct at the end of 25. Among them, the first-tier net debt ratio declined and the second- and third-tier recovery stemmed from rising net debt driven by stable interest-bearing debt and declining cash, and a decline in net assets driven by continued loss in performance. However, it is expected that as supply-side risk prevention policies continue to be introduced, housing enterprises will stabilize the level of control leverage in the future. Judging from the further decline in the share of unsold inventory in housing companies' total assets to a record low, the subsequent industry still needs to replenish inventory. The ratio of short-term cash debt in the late 26H1 sector was 0.9 times, 0.1 times at the end of '25; among them, Tier 1, 2, and 3 housing enterprises were 0.8 times, 0.7 times, and 1.0 times, respectively, and all tier housing enterprises declined somewhat.
26H1 sales repayments continued to decline, and the pre-receipt lock-in rate fell to an all-time low. Among them, Tier 1 and 2 real estate companies are still relatively high
Sales repayments in the 26H1 sector continued to decline, as reflected in cash inflows from sales of goods and services -16% year-on-year, due to a decline in the industry's sales growth rate. Cash inflows from sales of goods and services in the 26H1 industry covered 89% of revenue, compared with +20pct; -35% of accounts received in advance at the end of 26H1, +0.7pct compared to the end of 25; the lock rates for advance accounts at the end of 22-25 were 0.87, 0.69, 0.62, and 0.49 times, respectively. At the end of 26Q1, they continued to drop to 0.45 times, which is low. This means that the reserves of subsequent settlement resources are relatively high.
Risk warning: Sales fall short of expectations, financing exceeds expectations and tightens; the rise in labor costs in the property management industry exceeds expectations.