Caitong Securities has released a research report stating that CHINA JINMAO (00817) is currently in a phase of bottoming out and ongoing recovery. The company is focusing on enhancing its new project pipeline, with strong sales conversion from newly acquired land, accelerating capital turnover and profit contribution. Concurrently, it is revitalizing its existing assets, with a three-year plan to address legacy issues, aiming to achieve self-sustaining operations and recovery. The balance sheet and income statement are expected to gradually improve in the future. The report forecasts attributable net profit of 1.35 billion, 1.71 billion, and 1.93 billion yuan for 2026-2028, representing year-on-year growth of +8%, +26%, and +13% respectively. This is the firm's first coverage, assigning a "Buy" rating.
State-Owned Backing Provides Stability
The company is backed by Sinochem Group, with its ultimate controller being the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council. In June 2024, the company secured 15 billion yuan in perpetual loan support from Sinochem Hong Kong. Management adjustments have been made since 2023, and Tao Tianhai's appointment as Chairman of the Board in 2025 is expected to bring new vitality to the company's development.
Outperforming the Market with Sales Growth
The company firmly implements its dual-focus strategy on "core cities and core areas." In 2025, it achieved contracted sales of 113.5 billion yuan, a sales increase of +15.4%, making it the only major property developer to achieve positive growth. The average selling price was 23,700 yuan per square meter, up 24% year-on-year. The company's unsold inventory value is approximately 278.6 billion yuan, with 89.2% located in first- and second-tier cities, an increase of 2 percentage points from 2024.
Diversified Business and Asset Securitization Edge
The synergistic development of the company's three main business segments is opening up a second growth curve. Its property leasing business generated annual revenue of 1.595 billion yuan in 2025, with occupancy rates for core office buildings in Beijing at 93.3%. Hotel operations brought in annual revenue of 1.62 billion yuan. Jinmao Services reported full-year revenue of 3.204 billion yuan, a year-on-year increase of +25.9%. The REIT under its umbrella has completed seven dividend payments exceeding expectations since its listing through the end of 2025.
Financial Performance Stabilizes with Improving Profitability
The company's operating revenue for 2025 was 59.371 billion yuan, up +0.5% year-on-year. The gross profit margin was 15.5%, an increase of 6.2 percentage points year-on-year, while the net profit margin remained stable at 3.7%. The full-year new financing cost was 2.75%, down 64 basis points from 2024. The company meets the "three red lines" regulatory requirements, with its 2025 net gearing ratio, asset-liability ratio excluding advance receipts, and cash-to-short-term debt ratio at 80.8%, 68.3%, and 1.15x respectively.
Risk factors include sales and land acquisition performance falling short of expectations, inventory impairment and handover pressure, and occupancy and rental rates below expectations.
Comments