Lyon: Lowering the target price of China Resources Land (01109) to HK$40.8, short-term profits are being dragged down by historical burdens

The Zhitong Finance App learned that Lyon released a research report stating that the target price of China Resources Land (01109) was lowered from HK$42.4 to HK$40.8, maintaining the “outperforming the market” rating. The bank pointed out that although Rundi's performance is lower than that of leading state-owned enterprises in the short term due to concerns that profit forecasts may be lowered and sales growth in shopping malls will slow, its positive medium- to long-term outlook remains unchanged, and the company is still one of the bank's preferred stocks for the next 12 months in the Chinese real estate sector.

The bank expects China Resources Land's profit to be flat year-on-year in the first half of this year, mainly due to disposal revenue of 3 billion yuan (same below) brought about by the Chengdu Vientiane City Interagency REIT and the increase in recurring business profits, which should offset the impact of weakening profits and increased impairment losses on development properties. However, due to a significant decline in gross margin due to higher land costs and the historical burden of increased inventory impairment, the bank lowered the company's profit forecasts for 2026 to 2028 by 18.2%, 10.1%, and 10.8%, respectively.