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China Property Sector / EVE Energy / ZTE Corporation / Li Ning
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Sector Update | China Property
Supply continued to contract: Land sales revenue decreased 27.9% yoy in 9M26, with the decline narrowing gradually, and Tier 1 inventory months fell further in Oct 26, led by Beijing. Demand keeps diverging, with Tier 1 ahead of Tier 2 and second-hand ahead of new homes: Over 1-25 Oct 26, Tier 1 new-home/second-hand sales rose 2%/22% yoy respectively, while Tier 2 fell 23%/1%. ICE listing prices dropped 0.6% mom, suggesting more policy support is needed. Maintain UNDERWEIGHT on property sector.
Company Results | EVE Energy (300014 CH/BUY/Rmb47.21/Target: Rmb57.00)
3Q26 net profit missed our estimate at Rmb1,939m (+60.2% yoy/+4.5% qoq), due to subsidy cuts, tax hikes, and R&D costs. Forward revenue will be driven by a strong orderbook, but tax hikes will cap margins, and the inventory build-up amid a slump in lithium carbonate prices will probably lead to inventory provisions. We cut our 2026-28 net profit forecasts by 7%/17%/6% respectively. Maintain BUY and cut target price from Rmb85.00 to Rmb57.00.
Company Results | ZTE Corporation (763 HK/HOLD/HK$19.10/Target: HK$19.20)
3Q26 revenue beat consensus, but weak gross margin and higher-than-expected operating expenses weighed on operating profit. Growth should remain flattish in 4Q26 and moderate in 2027, as sluggish domestic telco demand offsets overseas growth. We cut 2026-28 earnings, maintain HOLD on ZTE and lower our target price to HK$19.20.
Company Update | Li Ning (2331 HK/BUY/HK$12.84/Target: HK$19.50)
Li Ning’s low single-digit retail sell-through decline in 3Q26 was below management’s expectations. For 4Q26, management highlights weather conditions and 11.11 as the key swing factors. However, with its full-year targets already incorporating a cautious view, management maintained its guidance. For Curry, management expects the full product portfolio to be rolled out after 4Q27. A board meeting will be held on 5 November to consider a special dividend. Maintain BUY but cut target price by 11% to HK$19.50.
Top Stories
Sector Update | China Property
Supply continued to contract: Land sales revenue decreased 27.9% yoy in 9M26, with the decline narrowing gradually, and Tier 1 inventory months fell further in Oct 26, led by Beijing. Demand keeps diverging, with Tier 1 ahead of Tier 2 and second-hand ahead of new homes: Over 1-25 Oct 26, Tier 1 new-home/second-hand sales rose 2%/22% yoy respectively, while Tier 2 fell 23%/1%. ICE listing prices dropped 0.6% mom, suggesting more policy support is needed. Maintain UNDERWEIGHT on property sector.
Company Results | EVE Energy (300014 CH/BUY/Rmb47.21/Target: Rmb57.00)
3Q26 net profit missed our estimate at Rmb1,939m (+60.2% yoy/+4.5% qoq), due to subsidy cuts, tax hikes, and R&D costs. Forward revenue will be driven by a strong orderbook, but tax hikes will cap margins, and the inventory build-up amid a slump in lithium carbonate prices will probably lead to inventory provisions. We cut our 2026-28 net profit forecasts by 7%/17%/6% respectively. Maintain BUY and cut target price from Rmb85.00 to Rmb57.00.
Company Results | ZTE Corporation (763 HK/HOLD/HK$19.10/Target: HK$19.20)
3Q26 revenue beat consensus, but weak gross margin and higher-than-expected operating expenses weighed on operating profit. Growth should remain flattish in 4Q26 and moderate in 2027, as sluggish domestic telco demand offsets overseas growth. We cut 2026-28 earnings, maintain HOLD on ZTE and lower our target price to HK$19.20.
Company Update | Li Ning (2331 HK/BUY/HK$12.84/Target: HK$19.50)
Li Ning’s low single-digit retail sell-through decline in 3Q26 was below management’s expectations. For 4Q26, management highlights weather conditions and 11.11 as the key swing factors. However, with its full-year targets already incorporating a cautious view, management maintained its guidance. For Curry, management expects the full product portfolio to be rolled out after 4Q27. A board meeting will be held on 5 November to consider a special dividend. Maintain BUY but cut target price by 11% to HK$19.50.
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