COLI's Profitability Should Improve as Property Sales Mix Shifts to Wealthy Cities

As housing demand cools and credit growth slows, we believe leverage-driven sales growth for China real estate developers is behind us. That said, we think large developers such as China Overseas Land & Investment will fare well as the industry consolidates, with smaller peers facing increasing liquidity constraints and slumping sales volume. During market downturns, COLI has been one of the few developers to achieve market share growth through focusing on landbank quality upgrades and opportunistic acquisitions.