Yamato: Raising China Overseas Development (00688) Target Price to HK$17.1 and Reiterates “Buy” Rating

The Zhitong Finance App learned that Yamato released a research report saying that it raised the 12-month target price for China Overseas Development (00688) from HK$15 to HK$17.1. The bank believes that profit is close to a turning point and reaffirms the “buy” rating. China's overseas development core net profit in the first half of the year fell 9.7% year on year, revenue rose 17.3% year on year, and gross margin contracted 1.3 percentage points year on year to 16.1% year over year, but it had already rebounded 2.4 percentage points year over year. Yamato said it believes that profits in China and overseas are reaching an inflection point, and that its advantages in first-tier cities are driving a virtuous cycle of supplementing high-quality land storage, high-margin sales, and profit recovery. It raised its earnings per share forecast for the 2026-2027 fiscal year by 8% to 17% based on the increase in contract sales and gross margin forecasts for the period.