Founder Securities initiated coverage on CHINA JINMAO (00817), assigning a "Recommend" rating. Backed by its parent company Sinochem Holdings, CHINA JINMAO benefits from lower financing costs as a state-owned enterprise. With an increasing portfolio of projects in tier-one and key tier-two cities, the company is expected to gain momentum in sales through its premium "Jin Yu Man Tang" product line. Key insights from Founder Securities include:
Revenue growth was driven by property development and Jinmao Services, with a slight year-on-year increase in adjusted net profit attributable to shareholders. In the first half of 2025, the company reported revenue of RMB 25.11 billion, up 14% YoY, primarily due to higher income from property development and Jinmao Services. Land and property development contributed RMB 20.04 billion, a 17% YoY increase, while Jinmao Services generated RMB 1.78 billion, up 20% YoY. Adjusted net profit attributable to shareholders reached RMB 1.12 billion, rising 2% YoY, mainly due to a 15% and 5% reduction in marketing and administrative expenses, respectively.
Sales showed positive growth, and land acquisitions expanded. From January to November 2025, CHINA JINMAO achieved total contracted sales of RMB 100.7 billion, surpassing the full-year 2024 figure of RMB 98.3 billion, making it one of the few developers with positive sales growth. The company also acquired land worth RMB 33.9 billion on an equity basis during the same period, compared to RMB 18.7 billion for the whole of 2024, reflecting confidence in its high-quality residential projects.
The REITs market expanded, with the divestment of the Sanya Ritz-Carlton Hotel paving the way for securitization. On November 21, 2025, the company announced plans to list the Sanya Ritz-Carlton Hotel at a reserve price of RMB 2.27 billion for asset securitization. In December 2025, China’s National Development and Reform Commission issued guidelines allowing four-star and above hotels to issue infrastructure REITs under the consumer infrastructure category. This move aligns with CHINA JINMAO’s strategy to "optimize existing assets and enhance new investments," potentially replicating the success of its Changsha Meixi Lake Landmark City REIT listing.
Risks include potential delays in urban operation project renegotiations, slower-than-expected sales recovery, and insufficient impairment provisions.
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