Everbright Securities has adjusted its net profit attributable to shareholders forecast for CHINA OVERSEAS for 2026-2027 to RMB 11.81 billion and RMB 11.73 billion, respectively, down from previous estimates of RMB 13.95 billion and RMB 14.04 billion. The firm has also introduced a new forecast for 2028, projecting a net profit of RMB 11.77 billion. At the current stock price, the corresponding basic P/E ratios for 2026-2028 are estimated at 13x each. The brokerage maintains its "Buy" rating on the company, citing its solid leading position, improving sales trends, and clear credit advantages.
Key points from the report are as follows:
The company released an update on property sales and land acquisitions for the period January to April 2026. In April 2026, contracted sales amounted to RMB 24.19 billion, representing a year-on-year increase of 20.0%. The sales area reached 802,000 square meters, up 9.0% year-on-year. For the cumulative period from January to April 2026, contracted sales totaled RMB 75.71 billion, a rise of 13.7% year-on-year, while the sales area was 2.619 million square meters, down 10.6% year-on-year.
Sales trends are showing marginal improvement, commercial operations are developing steadily, and the company maintains a prudent financial strategy.
Sales trends are showing marginal improvement: The company's real estate development brand holds significant advantages, with the comprehensive implementation of the "COB LivingOS System" to deliver homes characterized by "safety, comfort, sustainability, and intelligence." For the period January to April 2026, the company's sales value of RMB 75.71 billion (up 13.7% year-on-year) remains at the forefront of the industry. The average selling price was RMB 28,900 per square meter (up 27.1% year-on-year), indicating a marginally positive sales trend. In 2025, the company's operating revenue was RMB 168.09 billion (down 9.2% year-on-year), with revenue from property development settlements at RMB 156.77 billion (down 10.3% year-on-year). The comprehensive gross margin was 15.5% (compared to 17.7% in 2024), the sales expense ratio was 2.8% (2.4% in 2024), and the administrative expense ratio was 1.3% (1.2% in 2024). Net profit attributable to shareholders was RMB 12.69 billion, a decrease of 18.8% year-on-year.
Commercial operations are developing steadily: In 2025, the company established its public commercial REIT platform, with the successful listing of the COB Commercial REIT. This achievement has realized a full-cycle capital closed loop encompassing "investment, financing, construction, management, and exit." Leveraging an increasingly mature asset management system and refined operational strategies, the company continues to develop city and regional landmark properties, optimizes its diversified asset portfolio, and achieves steady growth in operational efficiency. In 2025, revenue from commercial properties amounted to RMB 7.20 billion (including office building revenue of RMB 3.47 billion, shopping mall revenue of RMB 2.39 billion, long-term apartment revenue of RMB 350 million, and hotel and other revenue of RMB 990 million). As of the end of 2025, the company's (excluding COB Hong Yang) total gross floor area of commercial properties was 10.30 million square meters, of which operating commercial projects accounted for 7.75 million square meters, with 97.6% located in prime areas of first- and second-tier cities.
The company adheres to a prudent and robust financial strategy: As of December 31, 2025, the company held bank deposits and cash of RMB 103.63 billion (accounting for 11.3% of total assets), indicating industry-leading cash sufficiency. Total borrowings amounted to RMB 247.38 billion (of which 17.1% are due within one year, and 87.7% are denominated in RMB). The company's average financing cost in 2025 decreased to 2.8%, placing it within the lowest range in the industry.
Risk factors include potential underperformance in sales and project completions, challenges in commercial operations, and market downturns exceeding expectations.
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