"Large Banks" Huizheng: The market has overly high expectations for CHINA RES MIXC, downgraded to "Hold" with a target price of 47 yuan

HSBC's research report indicates that although the market has been optimistic about the luxury goods sales in the shopping malls under CHINA RES MIXC (01209.HK), the bank believes that the profitability sensitivity of the company's mall business may be lower than market expectations. Based on a projected price-to-earnings ratio of 21 times for 2026, the company's stock price has already reflected its quality premium, and there is limited room for further valuation expansion; the rating has been downgraded from "Buy" to "Hold," with the target price reduced from HKD 51 to HKD 47.

The bank expects that from 2025 to 2027, the mall business revenue will grow by 15%, 14%, and 12%, respectively, while maintaining a healthy gross profit margin of 75% to 76%. However, analysis shows that for every 1 percentage point that mall revenue growth exceeds expectations, core profit growth only accelerates by 0.5 percentage points.

At the same time, the bank has lowered its core profit forecasts for 2025 to 2027 by 3% to 10% to reflect the slowdown in the opening pace of new projects, as well as ongoing pressure on property management and value-added services; it is expected that profit growth will slow to high single digits in 2027, compared to 20% to 31% from 2022 to 2024