Company Reports

China Resources Land's revenue and operating profit declined 28% and 31% year on year, respectively, in first-half 2026. Gross margin rose to 25.4% from 24.0% a year ago due to a favorable mix shift toward higher-margin property investment income.

China Resources Land, or CR Land, is distinctive among leading Chinese real estate developers as it enjoys relatively large exposure to investment property businesses. Riding on the success of the MixC commercial complex, the high-end retail commercial projects in top cities of China, CR Land is transitioning from predominantly developing residential properties to expanding mixed-use projects, including shopping malls, offices, and hotels. While residential project sales continue to underpin CR Land’s cash inflow, we expect the firm to add to its investment property portfolio with strong recurring income and healthy profitability in higher-tier cities. We assume that non-property-development income will continue to drive mid-single-digit growth and will represent around 40% of the firm’s earnings in 2030. Also, the fast-growing investment properties imply increasing visibility of recycling capital through REIT listing in China.

Major Chinese property developers, including state-owned China Overseas Land and Investment and China Resources Land, have had 15%-25% gains in share prices since April 28. That said, the sales value of the top 100 developers slid by 19% year on year in January-April 2026, per third-party data.

China Resources Land saw 1% revenue growth and a 3% decline in operating profit for 2025. Although a 130-basis-point contraction in property development gross margin weighed on profitability, this was largely offset by robust earnings growth from investment properties.

China Resources Land, or CR Land, is distinctive among leading Chinese real estate developers as it enjoys relatively large exposure to investment property businesses. Riding on the success of the MixC commercial complex, the high-end retail commercial projects in top cities of China, CR Land is transitioning from predominantly developing residential properties to expanding mixed-use projects, including shopping malls, offices, and hotels. While residential project sales continue to underpin CR Land’s cash inflow, we expect the firm to add to its investment property portfolio with strong recurring income and healthy profitability in higher-tier cities. We assume that non-property-development income will continue to drive mid-single-digit growth and will represent around 40% of the firm’s earnings in 2030. Also, the fast-growing investment properties imply increasing visibility of recycling capital through REIT listing in China.

China Resources Land posted a 13% year-on-year growth in rental income from its investment property business in 2025, thanks to strong retail asset performance. Domestic peer Longfor also saw 5% expansion in operating revenue from investment properties in 2025.

China Resources Land, or CR Land, is distinctive among leading Chinese real estate developers as it enjoys relatively large exposure to investment property businesses. Riding on the success of the MixC commercial complex, the high-end retail commercial projects in top cities of China, CR Land is transitioning from predominantly developing residential properties to expanding mixed-use projects, including shopping malls, offices and hotels. As residential project sales continue to underpin CR Land’s cash inflow, we expect the firm to add to its investment property portfolio with strong recurring income and healthy profitability in higher-tier cities. We assume that non-property-development income will continue to drive mid-single-digit growth and will represent around 40% of the firm’s earnings in 2029. Also, the fast-growing investment properties imply increasing visibility of recycling capital through REIT listing in China.

According to the National Bureau of Statistics, China's new home sales value declined by 11% year on year in January-November 2025. At the recent Central Economic Work Conference, the government reiterated its commitment to stabilizing the property market and clearing excess housing inventory.

China Resources Land, or CR Land, posted 20% and 38% year-on-year growth in revenue and operating profit for the first half of 2025, respectively. The improved profitability comes from margin expansion in property development, driven by higher selling prices and well-contained operating expenses.

China Resources Land, or CR Land, is distinctive among leading Chinese real estate developers as it enjoys relatively large exposure to investment property businesses. Riding on the success of the MixC commercial complex, the high-end retail commercial projects in top cities of China, CR Land is transitioning from predominantly developing residential properties to expanding mixed-use projects, including shopping malls, offices and hotels. As residential project sales continue to underpin CR Land’s cash inflow, we expect the firm to add to its investment property portfolio with strong recurring income and healthy profitability in higher-tier cities. We assume that non-property-development income will continue to drive mid-single-digit growth and will represent around 40% of the firm’s earnings in 2029. Also, the fast-growing investment properties imply increasing visibility of recycling capital through REIT listing in China.

According to China Real Estate Information Corp, the top 100 real estate developers in China saw an 11% year-on-year contracted sales decline for the first half of 2025. However, their aggregate land premium paid grew by over 30% for the same period.

China Resources Land delivered strong 2024 results as 11% year-on-year revenue growth exceeded our forecast. While property development's 16.8% gross margin remained below 20.7% for 2023, it rose sequentially in the second half due to higher sales mix in wealthy cities.

China Resources Land, or CR Land, is distinctive among leading Chinese real estate developers as it enjoys relatively large exposure to investment property businesses. Riding on the success of the MixC commercial complex, the high-end retail commercial projects in top cities of China, CR Land is transitioning from predominantly developing residential properties to expanding mixed-use projects, including shopping malls, offices and hotels. As residential project sales continue to underpin CR Land’s cash inflow, we expect the firm to add to its investment property portfolio with strong recurring income and healthy profitability in higher-tier cities. We assume that non-property-development income will continue to drive mid-single-digit growth and will represent around 40% of the firm’s earnings in 2029. Also, the fast-growing investment properties imply increasing visibility of recycling capital through REIT listing in China.

The 2024 Central Economic Work Conference, or CEWC, held on Dec. 11-12 reaffirmed benign measures to stabilize China's home market and mitigate the industry's financial risks. Other key themes include unleashing property demand potential and expediting inventory absorption.

China’s Ministry of Housing and Urban-Rural Development, along with the Ministry of Finance and other authorities, announced new measures on Oct. 17 to stabilize the property market. We think the most significant directive pertains to upsized credit support to stalled projects, as overall funding will increase to over CNY 4 trillion by the end of 2024 (CNY 2.2 trillion loans approved as of Oct. 17). We expect an acceleration in loan disbursement with distressed developers receiving more funds, which should prop up homebuyers’ confidence, in our view. However, the market may be disappointed by the lack of new incremental stimulus, except reiteration of local governments’ autonomy to relax buying curbs. Despite 5%-17% share price declines in property names following the conference, our longer-term thesis is unchanged: We expect new-home sale prices to bottom around mid-2025 with a mild rebound thereafter. This is supported by easing on borrowing costs, absorption of excess inventory, and further fiscal support on property buying.

We think the recent buying frenzy in China real estate names was induced by incremental policy easing and investors’ reignited sentiment, rather than a rebound in durable home demand. While policy relief has lifted home sales in select key cities, this may be short-lived as home price weakness will likely persist amid oversupply. We also believe that new directives will pose a limited impact on less wealthy cities, given their already loosened homebuying curbs. As such, we reiterate our view that nationwide new home sales value and prices should stabilize in mid-2025 as excess inventory is absorbed, and maintain our fair value estimates for our China property sector coverage.

No-moat CR Land defied broad industry weakness by printing a respective 8% year-on-year growth in property development and investment revenue for first-half 2024. That said, we expect sluggish home presales starting in 2023 to weigh on its top line through 2025, leading to a mix shift to higher-margin nondevelopment recurring income. Property development’s gross margin worsened to 12.4% in the first half from 17.0% a year ago, partly offset by shopping malls’ gross margin increase. As such, we cut our revenue forecasts by 2%-11% for 2024-28 while lifting midcycle operating margin by 30 basis points to 22.0%, leading to an unchanged HKD 43.0 fair value estimate. CR Land remains one of our top picks in the China real estate sector given its resilient earnings and healthy balance sheet.

China Resources Land, or CR Land, is distinctive among leading Chinese real estate developers as it enjoys relatively large exposure to investment property businesses. Riding on the success of the MixC commercial complex, the high-end retail commercial projects in top cities of China, CR Land is transitioning from predominantly developing residential properties to expanding mixed-use projects, including shopping malls, offices and hotels. As residential project sales continue to underpin CR Land’s cash inflow, we expect the firm to add to its investment property portfolio with strong recurring income and healthy profitability in higher-tier cities. We assume that non-property-development income will grow at a five-year CAGR of 9.8% and represents around 20% of the firm’s revenue in 2028 Also, the fast-growing investment properties imply increasing visibility of recycling capital through REIT listing in China.

We view the recent favorable measures for the China real estate sector, including the scrapping of buying curbs in wealthy cities and the unwinding of the mortgage rates floor, as encouraging to homebuyers and investors. That said, we caution that potential buyers may remain on the sidelines amid falling home prices, and policy tailwinds will likely require a longer time to translate into a pickup in home sales. Additionally, although the CNY 500 billion in loans—backed by a relending facility from China’s central bank—to local state-owned enterprises for converting completed but unsold properties to affordable units should help clear excess inventory, execution risks remain, in our view. While the policy-induced rally has reflected the market sentiment shift, we maintain the valuations of stocks under our coverage, given industry fundamentals that are still weak. Despite a more demanding sector valuation, we think shares of state-owned developers such as China Overseas Land & Investment and China Resources Land remain attractive. We continue to prefer both names, given their more resilient contracted sales and better financial strength.

We retain our fair value estimate for China Resources Land, or CR Land, at HKD 43 per share following its impressive 2023 results, underpinned by respective top-line year-on-year growths of 20% and 26% for its property development and recurring businesses—mainly property investment and management. While the firm’s residential properties saw strong bookings for 2023, we expect the revenue growth to slow in 2024 as home sales remain weak. Nonetheless, we foresee an accelerating inventory turnover through 2028 as homebuyers continue to trust CR Land’s project quality. Additionally, shopping mall rental and property management income should keep expanding amid rollout in top cities, in our view. This would also enhance the company’s profitability, as margins for recurring income have largely exceeded that for property development. While we raise our weighted average cost of capital assumption to 10.0% from 9.6% given higher financial risks, this has a limited impact on our valuation as our midcycle operating margin forecast of about 22% is unchanged. Despite the recent runup, we view CR Land’s shares as cheap and think the market is still overlooking the company's robust earnings and financial strength.