CITIC Securities: 25H1 Property Companies' Net Profit Attributable to Parent Turns Positive, High Dividends Drive Valuation Increase

According to the Zhitong Finance APP, Guotai Junan released a research report stating that the financial reports of key property companies in the first half of 2025 showed slight improvement, with net profits turning positive. Although expansion during the period was relatively cautious, management efficiency remained stable, and valuations increased due to stock price recovery, still remaining in the mid-to-long-term bottom area. As companies focus on third-party expansion and cost reduction while shaking off the influence of related companies, future valuations are expected to continue to rise. As of September 4, 2025, the average PE ratio for key property companies in 2025 is 10.52 times, corresponding to an average PEG ratio of 1.09 times.

Key points from Guotai Junan are as follows:

The financial reports of 22 key property companies showed slight improvement, with net profits turning positive

Faced with economic pressure, the industry's revenue growth rate in the first half of 2025 slightly rebounded, with the 22 listed property companies tracked (referred to as key property companies hereafter) achieving a year-on-year revenue growth of 4.4%. Among them, the top 1-5 large enterprises had the highest year-on-year growth rate of 7.5%. As a result, the net profit attributable to shareholders of key property companies in the first half of 2025 turned positive, increasing by 32.1% year-on-year. Among these, the top 6-10 companies had the highest year-on-year growth rate, achieving a turnaround from losses to profits; the bottom two, ranked 21-22, had an average loss of 145 million yuan.

The average gross profit margin of key property companies in the first half of 2025 was 21.5%, a decrease of 1.67 percentage points year-on-year. During the same period, most key property companies had receivables lower than revenue, with a slight improvement in receivables. The scale of goodwill for companies mainly decreased. As of September 4, 2025, the average mid-term dividend yield for key property companies reached 1.03%, with two companies having a dividend yield above 4%, namely 4.92% for Jinmao Services and 4.18% for ONEWO.

22 key property companies are expanding cautiously, with relatively stable operational management efficiency

Due to the economic environment, the growth rate of managed area for key property companies continued to decline. In the first half of 2025, the average year-on-year growth rate of managed area for key property companies was 4%. Some companies have a high contract/managed area, indicating potential for future growth in managed area. In the first half of 2025, individual commercial office units continued to show significant efficiency, with commercial office companies such as Xing Sheng Commercial and Bao Long Commercial achieving unit area revenues exceeding 50 yuan per square meter. In the first half of 2025, high-quality commercial management companies slightly expanded, with China Resources Vientiane Life adding 6 new managed shopping centers; the occupancy rates during the period remained relatively stable, with average occupancy rates of 97.1%, 92.5%, and 91.8% for China Resources Vientiane Life, Xing Sheng Commercial, and Bao Long Commercial, respectively. In terms of unit commercial management service revenue, China Resources Vientiane Life had the highest at 1.73 yuan/square meter in the first half of 2025.

The stock prices and valuations of 22 key property companies have risen since 2025

Guotai Junan believes that since the beginning of this year, the stock prices of property companies have recovered, and their valuations have also increased, but they still remain in the mid-to-long-term bottom area, with potential for long-term upward movement in the future. As of September 4, 2025, the average PE ratio for key property companies in 2025 is 10.52 times, corresponding to an average PEG ratio of 1.09 times. When observing the indicators of market value/contract area and market value/managed area, the averages for key property companies are 0.61 times and 0.69 times, respectively, which are relatively low. As the influence of related companies on property companies continues to weaken, the safety of key property companies is continuously increasing. From the perspective of price increases since 2025, 14 property companies have experienced varying degrees of increase, while only 8 companies have declined Target Aspect

A-shares: CMPO (001914.SZ), XinDazheng (002968.SZ); H-shares: China Resources Vientiane Life (01209), ONEWO (02602), China Overseas Property (02669), Poly Property (06049), CG SERVICES (06098), YUEXIU SERVICES (06626), Sunac Services (01516). The financial reports of 22 key property companies showed slight improvement, with net profit attributable to the parent turning positive.

Risk Warning

Expansion of managed area not meeting expectations, rising labor costs, mergers and acquisitions not meeting expectations, expansion of value-added services not meeting expectations, policy risks