The Mainland pushes "three red lines" measures to limit real estate companies' financing of large motorcycles: new policies help the property market to overheat

Financial News

Written by: Zhang Weilun

2020-09-03 18:39

Last update date: 2020-09-03 18:39

The Mainland clearly defined the "three red lines" to tighten financing for real estate companies.

Morgan Stanley issued a report that the policy will further stabilize the property market and provide clear guidance on financing for real estate companies.

The "three red lines" include the debt-to-asset ratio after excluding advance receipts greater than 70%, the net debt ratio is greater than 100%, and the cash short-term debt ratio is less than 1 time.

Companies with different performances based on the above three indicators are divided into red, orange, yellow, and green.

Red is the most dangerous.

Morgan Stanley pointed out that three red lines fall into the Chinese property stocks covered by the bank. Greenland (Shanghai: 600606), R&F (2777) and Sunac (1918) belong to the red group, that is, three red lines are exceeded.

Mainland property stocks belonging to the green group include China Overseas (0688), China Resources Land (1109), Longfor Group (0960), and Shimao (0813).

The bank pointed out that the new policy reflects the central government's determination to stabilize the property market, especially the current loose credit environment and the rapidly recovering property market environment. It is necessary to ensure that liquidity does not flow into the property market too quickly or excessively. It is believed that the red line will help prevent the market. The risk of overheating is expected to stabilize the current ranking of the housing industry.

Domestic media: In the fourth quarter, the domestic real estate industry has a total of 360 billion yuan of debt due

Moody's sings the prospects of the domestic real estate industry to "stable"　

[Inside Housing] China's over 200 real estate company bankruptcy experts in the first half of the year: the most difficult period has passed

Puxin: The integration of domestic real estate, retail and industrial sectors will provide investment opportunities

Morgan Stanley