Company Reports

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.

China Jinmao's revenue and net profit declined 15% and 19% year on year, respectively, in the first half of 2026. Gross margin dropped to 11.6% from 16.2% a year ago due to recognition of lower-margin property sales. The interim dividend was unchanged at HKD 0.03 per share.

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 Jinmao's revenue and recurring operating profit rose 1% and 33% year on year, respectively, in 2025. The solid margin expansion was mainly driven by property development's rebounding profitability, continued organizational restructuring, and stricter marketing cost discipline.

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.

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 Jinmao posted year-on-year revenue and operating profit growth of 14% and 48%, respectively, for the first half of 2025. Notably, its operating margin rose to 8.0% from 5.9% for the year-ago period, thanks to lower marketing expenses and better operating leverage.

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 should maintain traction among housing upgraders, boding well for a moderate sales recovery through 2029, in our view.

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.

While China Jinmao's revenue declined 18% year on year in 2024, operating margin picked up by 270 basis points to 5.7% due to cost optimization and more sales in large cities. Management targeted CNY 110 billion in contracted sales in 2025, a 12% increase from CNY 98 billion in 2024.

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 should maintain traction among housing upgraders, boding well for a moderate sales recovery through 2029, in our view.

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 China Jinmao's first-half 2024 revenue lagged our expectations as a presale slump starting in 2022 weighed on property development's booking. That said, net profit year-on-year growth of 174% was a positive surprise, which management attributed to effective cost reduction. Given that Jinmao's contracted sales (mostly presale) remained sluggish in the first-half 2024, we revised down our 2024-26 revenue assumptions by 7%-9%, respectively. Nonetheless, we think Jinmao's profitability will likely improve amid strong cost discipline, and we only cut operating profit forecasts by 2%-8% for 2024-26. The company reiterated focus on higher-tier cities for new residential projects. As such, we keep our midcycle forecast on Jinmao, leading to an unchanged fair value estimate of HKD 0.70 per share. We view Jinmao's shares as fairly priced.

China Jinmao mainly engages in development of high-end properties in wealthy cities of China, with 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 dip in 2022-23 amid weak homebuyer sentiment, China Jinmao’s premium projects should maintain traction among housing upgraders, boding well for a moderate sales recovery through 2028, in our view.

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.

China Jinmao’s 2023 results were underwhelming, with a 13% decline in revenue and a CNY 6.9 billion net loss. Stripping out one-off items, Jinmao’s adjusted earnings dropped by over 80% due to subdued property sales profit and elevated operating costs. The property development segment's gross margin tumbled to 9% in 2023 from 13% a year ago, which management ascribed to low contribution from higher-margin primary land development and falling home prices. That said, we factor in a pickup in the segment’s gross margin to 12% by 2028, amid a price recovery. Given a more conservative housing sales outlook, we also lower our five-year development revenue CAGR to 4.0% from 6.0%. Moreover, we think Jinmao’s rising net gearing ratio and funding cost, compounded by a lack of final dividend payout for 2023, are of concern to shareholders. More borrowings also led to an over 50% rise in net debt to CNY 85.2 billion as of end-2023, which negatively affects our valuation. As such, we lower our fair value estimate to HKD 0.70 per share from HKD 1.50. While Jinmao's shares remain underpriced, we think state-owned peers such as China Resources Land offer investors a more appealing risk/reward and dividend yield.

China Jinmao mainly engages in development of high-end properties in wealthy cities of China, with 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 dip in 2022-23 amid weak homebuyer sentiment, China Jinmao’s premium projects should maintain traction among housing upgraders, boding well for a moderate sales recovery through 2028, in our view.

We published our inaugural China real estate industry pulse for the first quarter of 2024 with the view that housing demand should gradually recover through 2026, supported by ongoing policy tailwinds. While new home sales in China remained sluggish in 2023, the nationwide average price was steadier due to a continuing mix shift to wealthier regions with more resilient prices. Moreover, we like the ramping-up of supportive measures since the second half of 2023 and expect further easing in buying restrictions and mortgage rate cuts in large cities. While share price performances could remain volatile in the near term, we see an improving risk/reward profile at the current valuation as the market may be missing key developers' improving sales outlooks. As such, we prefer top state-owned builders, China Overseas Land & Investment and China Resources Land, as both have seen better sales growth, higher asset quality, and healthier gearing ratios versus their peers.