China Jinmao's Margin Is Set to Recover on Higher Residential Project Quality

China Jinmao mainly engages in developing high-end properties in wealthy cities in China, with its focus shifting to the city operation model in recent years. Through this model, Jinmao capitalizes on the strong ties with local government and taps into sizable primary and secondary land development projects. While primary land development warrants better margins, given lower land cost via a nonauction channel, we think it’s susceptible to large fluctuations in brownfield land provision by the government. That said, we expect China Jinmao to continue to source low-cost landbank for secondary land development through city operation. Despite a pronounced sales decrease in 2022-24 amid weak homebuyer sentiment, Jinmao’s premium projects have driven a sales rebound in 2025, with its improving asset quality boding well for a moderate sales growth through 2030, in our view.