Pacific Securities: China Resources Land (01109) was given a “buy” rating, and core net profit exceeded 10 billion dollars

The Zhitong Finance App learned that Pacific Securities released a research report saying that in the first half of 2026, China Resources Land (01109) revenue increased slightly, land reserves were abundant, the structure continued to be optimized, and financing costs were reduced. The bank expects the company's net profit to be 244.12/257.15/27111 billion yuan in 2026/2027/2028, corresponding to PE 7.19X/6.82X/6.47X for 26/27/28, respectively, giving it a “buy” rating.

Pacific Securities's main views are as follows:

Incidents

The company released its 2026 semi-annual report. In the first half of 2026, the company achieved operating income of 67.87 billion yuan, a year-on-year decrease of 28.5%, and net profit to mother of 9.84 billion yuan, a year-on-year decrease of 17.2%.

Revenue declined slightly, and core net profit exceeded 10 billion

In the first half of 2026, the company achieved revenue of 67.87 billion yuan, a year-on-year decrease of 28.5%. By business segment, the company's three major businesses were 452.6/141.6/8.45 billion yuan in revenue, respectively, of 452.6/141.6/8.45 billion yuan, accounting for 66.7%/20.9%/12.4% of revenue, respectively. In the first half of 2026, the company achieved core net profit of 10.16 billion yuan, a year-on-year increase of 1.6%, and net profit to mother of 9.84 billion yuan, a year-on-year decrease of 17.2%. The company's gross sales margin was 25.4%, an increase of 1.4 percentage points over the same period in '25.

The sales scale remains in the top three in the industry, focusing on high-energy cities

As a basic contribution to the company's performance, the development and sales business achieved a contract sales amount of 116.50 billion yuan in the first half of 2026, an increase of 5.6% over the previous year. The contract scale remained in the top three in the industry, with a contracted sales area of 3.16 million square meters, a decrease of 23.2% over the previous year. It ranked first in the region in terms of market share in 6 cities and the top 3 in market share in 15 cities. In the first half of 2026, the company's development and sales business settlement revenue was 45.26 billion yuan, a year-on-year decrease of 39.1%. The settlement area was 1.98 million square meters, a decrease of 38.3% year-on-year.

The scale of investment is at the forefront of the industry, and the soil storage structure continues to be optimized

In terms of land acquisition, the company acquired 16 parcels of high-quality land in the first half of the year, adding a total construction area of 2.84 million square meters, a total land price of 34.1 billion yuan, and an equity land price of 32.49 billion yuan. The investment intensity ranked second in the industry. Tier 1 and 2 cities accounted for 99% of investment, and the land storage structure continued to be optimized. By the end of the first half of 2026, the company's total land storage area was 47.12 million square meters.

Recurring business revenue and profit grew steadily, and diversified markets continued to expand

In the first half of 2026, the company's total recurring business revenue was 22.61 billion yuan, up 9.9% year-on-year, accounting for 33.3% of total turnover. Achieved core net profit of 6.65 billion yuan, an increase of 10.4% over the previous year. Among them, the operating real estate leasing business achieved revenue of 14.16 billion yuan, an increase of 17.0% over the previous year, while shopping malls achieved a turnover of 12.44 billion yuan, an increase of 19.4% over the previous year, and the occupancy rate was 98.0%, an increase of 0.7 percentage points over the previous year. The number of shopping malls in operation remains at 98. In the asset-light business, Vientiane Life achieved a turnover of 9.22 billion yuan, an increase of 8.1% over the previous year; core net profit increased 10.8% to 2.23 billion yuan.

Financial financing channels are unobstructed, and financing costs continue to decrease

As of the end of the first half of 2026, the company's comprehensive loan amount was 271.18 billion yuan, with a net interest-bearing debt ratio of 41.0%. In terms of financing, in the first half of 2026, the company obtained 11.5 billion yuan in financing from the domestic open market, and coupon interest rates ranged from 1.55% to 2.00%. The company continues to optimize financing costs. At the end of the first half of 2026, the weighted average debt financing cost was 2.63%, down 9BP from the end of 2025, maintaining the lowest level in the industry.

Risk Alerts

Real estate industry policy risks; sales improvements fell short of expectations; gross margin declined beyond expectations.