Periodic/Sector reports
China Property: Margin Trough Not Yet Behind Us; Quality Still Wins Out
UNDERWEIGHT (Maintained)
Analyst
Analyst
Highlights
- Most companies under our coverage are expected to report yoy declines in core net profit and DPS in 1H26, except for CR Mixc and CR Land. Ongoing margin pressure will weigh on investors’ sentiment.
- High frequency data of Jul 26 points to continued sales recovery in Tier 1 cities. Price recovery marginally softened mom in Shanghai and Shenzhen in Jun 26.
- Quality gap widening; stay selective. Maintain UNDERWEIGHT. Our top picks are COLI and CR Mixc.
Analysis
- 1H26 results preview. Most companies under our coverage are expected to report yoy declines in core net profit and DPS, with the exceptions of CR Mixc and CR Land. Double-digit tenant sales and rental growth should support earnings for both names, while stronger-than-expected gains from REIT listings will also contribute to CR Land’s earnings resilience.
- Ongoing margin pressure of residential sales and management weighs on investor sentiment. We expect continued margin pressure in development property (DP), macro pressure on residential management fees and a patchy market recovery to weigh on overall investor sentiment. While, sentiment toward COLI and CR Mixc should remain relatively stable, as both names are likely to face the lowest risk of EPS downgrades.
Highlights
- Most companies under our coverage are expected to report yoy declines in core net profit and DPS in 1H26, except for CR Mixc and CR Land. Ongoing margin pressure will weigh on investors’ sentiment.
- High frequency data of Jul 26 points to continued sales recovery in Tier 1 cities. Price recovery marginally softened mom in Shanghai and Shenzhen in Jun 26.
- Quality gap widening; stay selective. Maintain UNDERWEIGHT. Our top picks are COLI and CR Mixc.
Analysis
- 1H26 results preview. Most companies under our coverage are expected to report yoy declines in core net profit and DPS, with the exceptions of CR Mixc and CR Land. Double-digit tenant sales and rental growth should support earnings for both names, while stronger-than-expected gains from REIT listings will also contribute to CR Land’s earnings resilience.
- Ongoing margin pressure of residential sales and management weighs on investor sentiment. We expect continued margin pressure in development property (DP), macro pressure on residential management fees and a patchy market recovery to weigh on overall investor sentiment. While, sentiment toward COLI and CR Mixc should remain relatively stable, as both names are likely to face the lowest risk of EPS downgrades.
UNDERWEIGHT (Maintained)
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at the following link: https://research-api.uobkayhian.com/assets/disclaimer/df64a6ea-7980-447c-ae9e-fd19b93257dc, 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.
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