Caitong Securities has issued a research report stating that CHINA JINMAO (00817) is currently at an inflection point, showing signs of bottoming out and entering a phase of sustained recovery. The company is enhancing its growth by securing new land parcels with strong sales conversion potential, thereby accelerating capital turnover and profit contribution. Concurrently, it is actively optimizing its existing asset portfolio, with a three-year plan to address legacy issues and achieve self-sustaining operational health and repair. The balance sheet and income statement are expected to progressively improve in the coming period. The report forecasts net profit attributable to shareholders of RMB 1.35 billion, RMB 1.71 billion, and RMB 1.93 billion for 2026-2028, representing year-on-year growth of +8%, +26%, and +13%, respectively. This marks the firm's inaugural coverage, assigning a "Buy" rating.
Key Analyst Perspectives
The report highlights robust sales growth and pricing power that outpaces the sector. The company is steadfastly implementing its dual-focus strategy on "core cities and core segments." In 2025, it achieved contracted sales of RMB 113.5 billion, a 15.4% increase, making it the only major property developer to record positive growth. The average selling price rose to RMB 23,700 per square meter, up 24% year-on-year. The value of unsold inventory is approximately RMB 278.6 billion, with 89.2% located in first- and second-tier cities, an increase of 2 percentage points from 2024.
Synergistic Business Development and Asset Securitization Edge
The company's three main business lines are developing synergistically, opening a secondary growth curve. Its property leasing business generated annual revenue of RMB 1.595 billion in 2025, with occupancy rates for core office buildings in Beijing reaching 93.3%. Hotel operations brought in annual revenue of RMB 1.62 billion. CHINA JINMAO's property services arm reported annual revenue of RMB 3.204 billion, a 25.9% year-on-year increase. The REIT under its umbrella has completed seven dividend distributions exceeding expectations since its listing through the end of 2025.
Financial Stabilization and Improving Profitability
The company's financial performance is stabilizing and recovering, with profit quality gradually rebounding. Operating revenue for 2025 was RMB 59.371 billion, a slight increase of 0.5% year-on-year. The gross profit margin improved to 15.5%, up 6.2 percentage points, while the net profit margin held steady at 3.7%. The average cost of new financing for the full year was 2.75%, a decrease of 64 basis points from 2024. The company remains compliant with the "three red lines" regulatory thresholds. Its net gearing ratio, asset-liability ratio excluding advance receipts, and cash-to-short-term debt ratio for 2025 were 80.8%, 68.3%, and 1.15x, respectively.
Associated Risks
The report notes potential risks, including sales and land acquisition performance falling short of expectations, pressure from inventory impairment and cost recognition, and occupancy rates and rental levels not meeting forecasts.
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