Company Coverage
China Overseas Land & Investment: (688 HK)
BUY (Maintained)
Current price:
Target price:
Upside:
HK$14.35
HK$19.88
+38.5%
Analyst
Analyst
Highlights
- 1H26 core net profit fell 9.7% yoy, better than our low-teens drop expectation. DPS declined at a narrower 8.0% yoy to HK$0.23/share.
- With an improved market outlook and stronger sales pipeline in 2H26, we expect positive sales growth in 2H26. First-tier exposure will be the profit lever, and margin stabilisation is becoming more visible. Investment will stay proactive (target Rmb80b-100b).
Maintain BUY with an unchanged target price of HK$19.88. COLI remains our top pick for the China property sector.
Analysis
- 1H26 better than expected. Core net profit declined 9.7% yoy to Rmb7.93b, vs market expectation of a low-teens yoy drop, equivalent to 67% of our annual estimate. Key drivers include: a) 17.3% yoy growth in revenue, driven by property development (+17.8% yoy), with commercial operations revenue stable (+0.9% yoy); b) a 1.0ppt decline in SG&A ration; and c) a 6.8% yoy decline in finance costs. Margin compression continued to be the key drag, with gross profit margin dropping 1.3ppt yoy to 16.1%. Net gearing ratio fell to 27.2%, down 1.2ppt yoy and 7.1ppt hoh. Interim DPS is HK$0.23, down 8.0% yoy.
Highlights
- 1H26 core net profit fell 9.7% yoy, better than our low-teens drop expectation. DPS declined at a narrower 8.0% yoy to HK$0.23/share.
- With an improved market outlook and stronger sales pipeline in 2H26, we expect positive sales growth in 2H26. First-tier exposure will be the profit lever, and margin stabilisation is becoming more visible. Investment will stay proactive (target Rmb80b-100b).
Maintain BUY with an unchanged target price of HK$19.88. COLI remains our top pick for the China property sector.
Analysis
- 1H26 better than expected. Core net profit declined 9.7% yoy to Rmb7.93b, vs market expectation of a low-teens yoy drop, equivalent to 67% of our annual estimate. Key drivers include: a) 17.3% yoy growth in revenue, driven by property development (+17.8% yoy), with commercial operations revenue stable (+0.9% yoy); b) a 1.0ppt decline in SG&A ration; and c) a 6.8% yoy decline in finance costs. Margin compression continued to be the key drag, with gross profit margin dropping 1.3ppt yoy to 16.1%. Net gearing ratio fell to 27.2%, down 1.2ppt yoy and 7.1ppt hoh. Interim DPS is HK$0.23, down 8.0% yoy.
BUY (Maintained)
Current price:
Target price:
Upside:
HK$14.35
HK$19.88
+38.5%
Analyst
Analyst
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
