A report from Guotai Haitong Securities indicates that key property companies are expected to see modest revenue growth in 2025. Cost reductions and efficiency improvements are projected to drive double-digit growth in net profit attributable to shareholders, with some firms offering high dividend yields. The 21 major property enterprises are expanding cautiously, while commercial management companies demonstrate stable operational efficiency. Valuations and stock prices are fluctuating near cyclical lows, with potential for future appreciation. A "Buy" rating is maintained.
Key observations from Guotai Haitong Securities are as follows: Revenue for the 21 key property firms increased slightly, with efficiency gains leading to double-digit growth in net profit attributable to shareholders. Some companies offer attractive dividend yields. Industry revenue growth saw a mild recovery in 2025, with the tracked listed property companies reporting a 5.1% year-on-year increase. The top five largest enterprises led with a growth rate of 7.4%. Driven by cost-cutting measures, net profit attributable to shareholders for these key firms rose 17.9% year-on-year in 2025. Companies ranked 11th to 15th showed the highest growth rate, moving from loss to profit. The average gross profit margin for key property companies was 19.4% in 2025, down 1.96 percentage points year-on-year. Most firms reported accounts receivable below revenue levels, indicating improved collection. Goodwill amounts generally declined. As of April 10, 2026, the average dividend yield for key property companies was 4.8%, with four firms—Vanke Property, Starsing Commercial, Jinmao Services, and Times Neighborhood—approaching a 10% yield.
Expansion among the 21 key property firms remains cautious, while commercial management operators maintain steady operational efficiency. Due to economic conditions, the managed area growth rate for key property companies averaged a moderate 4% in 2025. Some companies have a high contract-to-managed area ratio, suggesting future growth potential. Certain commercial office assets demonstrated notable efficiency in 2025, with companies like Starsing Commercial and Powerlong Commercial achieving revenue exceeding 100 RMB per square meter. High-quality commercial management firms expanded during the year; China Resources Mixc Lifestyle added 12 shopping centers to its managed portfolio. Occupancy rates remained stable, led by China Resources Mixc Lifestyle at 97.2%, followed by Starsing Commercial at 93.6%, and Powerlong Commercial at 91.5%. In terms of revenue per square meter for commercial management services, Starsing Commercial led at 3.64 RMB per square meter in 2025.
Stock prices and valuations for the 21 key property firms have been bottoming since 2025. With property company valuations at medium-to-long-term lows, there is room for sustained upward movement. As of April 10, 2026, the average forward price-to-earnings ratio for key firms was 10.28x, with a corresponding average PEG ratio of 1.31x. Based on metrics such as market capitalization to contract area and market capitalization to managed area, averages stood at 0.62x and 0.72x respectively, indicating relatively low levels. The report suggests that as the influence of affiliated companies on property firms continues to diminish, the security profile of key enterprises is improving. Since 2025, ten property companies have seen varying degrees of stock price increases, while eleven have experienced declines.
The investment recommendation remains a "Buy" rating. The property sector, after dealing with issues such as parent company risks, difficulties in raising fees, and impairments from acquisitions, has seen both business models and market expectations return to rationality. Companies are increasingly focusing on commercial logic rather than capital market demands, promoting cost efficiency and reasonable growth. In 2025, key property firms maintained sensible growth in net profit attributable to shareholders, with some offering high dividend yields. Although expansion is cautious, healthy cash flows support long-term sustainability. Combined with current low valuations, the sector is poised for gradual improvement. Companies to watch include A-share China Merchants Shekou Industrial Zone Holdings and H-shares China Resources Mixc Lifestyle, Vanke Property, China Overseas Property, Poly Property Services, Country Garden Services, and Yuexiu Services.
Risks include slower-than-expected expansion in managed area, rising labor costs, acquisition delays, slower growth in value-added services, and policy uncertainties.
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