Company Coverage
China Resources Land (1109 HK): 1H26: In Line; Mall Operations Remain The Key Outperformer
BUY (Maintained)
Current price:
Target price:
Upside:
HK$30.06
HK$39.60
+31.8%
Analyst
Analyst
Highlights
1H26 core net profit rose 1.6% yoy, in line with expectations, supported by a 10.4% growth in recurring profit and Rmb3.7b gain from IP disposal.
Since the beginning of the year, CR Land has proactively upgraded its strategy to prepare for the new pre-sale regime. Mall operations remain the key outperformer, with the 15th Five-Year Plan Period expansion plan intact.
Maintain BUY with unchanged target price of HK$39.60.
Analysis
1H26 results in line with expectations. Core net profit rose 1.6% yoy to Rmb10.16b, supported by Rmb3.7b gains from IP disposal, which is in line with our expectation. Revenue fell 28.5% yoy to Rmb67.87b, as development property (DP) revenue dropped 39.1% yoy to Rmb45.26b – partly offset by a 17.0% yoy rise in IP rental revenue to Rmb14.16b. Gross margin rose 1.4ppt yoy to 25.4%, as a higher recurring-business mix and stronger IP rental margin (+0.4ppt yoy) and CR Mixc Lifestyle margin (+0.9ppt yoy) more than offset a 5.6ppt decline in DP margin to 10.0%. Recurring core net profit rose 10.4% yoy to Rmb6.65b, lifting its share of group core profit by 5.3ppt to 65.5%. Net gearing reached 41.0% as of Jun 26, up 1.8ppt both yoy and hoh from 39.2%. Average funding cost dropped 9bp from end-25 to a record-low 2.63%. Interim DPS was Rmb0.20 (HK$0.231), flat yoy, implying a 14.0% core payout.
Highlights
1H26 core net profit rose 1.6% yoy, in line with expectations, supported by a 10.4% growth in recurring profit and Rmb3.7b gain from IP disposal.
Since the beginning of the year, CR Land has proactively upgraded its strategy to prepare for the new pre-sale regime. Mall operations remain the key outperformer, with the 15th Five-Year Plan Period expansion plan intact.
Maintain BUY with unchanged target price of HK$39.60.
Analysis
1H26 results in line with expectations. Core net profit rose 1.6% yoy to Rmb10.16b, supported by Rmb3.7b gains from IP disposal, which is in line with our expectation. Revenue fell 28.5% yoy to Rmb67.87b, as development property (DP) revenue dropped 39.1% yoy to Rmb45.26b – partly offset by a 17.0% yoy rise in IP rental revenue to Rmb14.16b. Gross margin rose 1.4ppt yoy to 25.4%, as a higher recurring-business mix and stronger IP rental margin (+0.4ppt yoy) and CR Mixc Lifestyle margin (+0.9ppt yoy) more than offset a 5.6ppt decline in DP margin to 10.0%. Recurring core net profit rose 10.4% yoy to Rmb6.65b, lifting its share of group core profit by 5.3ppt to 65.5%. Net gearing reached 41.0% as of Jun 26, up 1.8ppt both yoy and hoh from 39.2%. Average funding cost dropped 9bp from end-25 to a record-low 2.63%. Interim DPS was Rmb0.20 (HK$0.231), flat yoy, implying a 14.0% core payout.
BUY (Maintained)
Current price:
Target price:
Upside:
HK$30.06
HK$39.60
+31.8%
Analyst
Analyst
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