In "Major Banks," CITIC Securities expects that the performance of domestic property stocks continued to be under pressure last year, while the profit scale of Runhua, China Overseas, and C&D INTL GROUP remains considerable

The CICC research report indicates that in the mainland real estate industry, the expected profits of covered companies in 2025 will continue to decline significantly compared to 2024. Among them, China Resources Land (01109.HK), China Overseas Development (00688.HK), and C&D International (01908.HK) are expected to see a year-on-year decline of about 15% to 20% in profits for 2025, but the profit scale remains considerable. Greentown China (03900.HK), Yuexiu Property (00123.HK), China Overseas Hongyang (00081.HK), Poly Property (00119.HK), and New World Development (601155.SH) may record positive profits, but the extent is minimal. Longfor (00960.HK) and Urban Construction Development (600266.SH) may record slight losses, while Binjiang (002244.SZ) and China Jinmao (00817.HK) may see stable or increasing core profits.

On the operational side, CICC indicates that the results for 2025 are slightly below expectations, and a cautious stance may be maintained for 2026. The average actual sales of covered targets are expected to decline by 20% year-on-year in 2025, with land acquisition intensity at 37%, slightly lower than previous market expectations. Entering 2026, it is believed that real estate companies may temporarily maintain a relatively cautious operational stance, with subsequent adjustments based on market trends.

CICC has made concentrated adjustments to the earnings of covered targets for 2025 to 2026. The ratings for covered targets are maintained, and target prices remain unchanged. A positive stance on the real estate sector is maintained this year. After fully accounting for negative profit expectations, the potential risks identified by CICC may lie in the financial conditions of individual companies.

CICC believes that this year is expected to welcome a more positive absolute and relative return level. In terms of stock selection, it is believed that 2026 may be dominated by beta, with current mainstream targets having certain cost-effectiveness. Among A-shares are Binjiang Group, New World Development, and China Merchants Shekou (001979.SZ), while Hong Kong stocks include China Resources Land, China Overseas Development, C&D International, China Jinmao, Greentown China, Yuexiu Property, China Overseas Hongyang, and Poly Property. If liquidity conditions can be further relaxed, several private enterprises may also be considered for low-buy opportunities after the debt-to-equity conversion process.

The following are CICC's ratings and target prices for domestic real estate stocks:

Stock | Investment Rating | Target Price

China Merchants Shekou (001979.SZ) | Outperform Industry | RMB 12.2

Binjiang Group (002244.SZ) | Outperform Industry | RMB 14.25

New World Development (601155.SH) | Outperform Industry | RMB 18.5

China Resources Land (01109.HK) | Outperform Industry | HKD 44.63

China Overseas Development (00688.HK) | Outperform Industry | HKD 17.2

C&D International (01908.HK) | Outperform Industry | HKD 19.1

China Jinmao (00817.HK) | Outperform Industry | HKD 1.86 GREENTOWN CHINA (03900.HK) | Outperforming the industry | HKD 11.88

YUEXIU PROPERTY (00123.HK) | Outperforming the industry | HKD 6.75

CHINA OVERSEAS HONGYANG (00081.HK) | Outperforming the industry | HKD 3.29

POLY PROPERTY (00119.HK) | Outperforming the industry | HKD 2.65