Zhongtai Securities: First investment in China Resources Land (01109), “Increased holdings”, increased revenue, profit, and highlighted the resilience of operational real estate

The Zhitong Finance App learned that Zhongtai Securities released a research report saying that the first coverage gave China Resources Land (01109) an “increase” rating. The company embarked on a differentiated route during the downturn in the industry, actively exploited its advantages in operational real estate and commercial management, and developed a second growth curve. The performance of its subsidiary China Resources Vientiane Life was outstanding. At the same time, the company's real estate development business remains steady, and its sales scale is at the top of the industry. A stable business philosophy and a multi-faceted business strategy enable the company to maintain a certain ability to grow while maintaining a stable basic market.

The main views of Zhongtai Securities are as follows:

Performance briefing

On August 27, 2025, the company released its 2025 interim results report. The company achieved revenue of about RMB 94.92 billion in the first half of the year, an increase of 19.9%; net profit to mother was RMB 11.88 billion, an increase of 16.2% over the previous year.

Revenue and profit increased, and gross margin increased year over year

In the first half of 2025, the company achieved operating income of about RMB 94.92 billion, up 19.9% year on year; the company's net profit to mother was about 11.88 billion yuan, up 16.2% year on year; the company's gross profit margin was 24.0%, up 1.8 pct year on year; the company's net profit margin was 15.5%, down 0.3 pct year on year; and the company's expense ratio was 6.6%, down 0.3 pct year on year. The settlement turnover of the development and sales business increased during the same period, driving rapid revenue growth; the development and sales business remained profitable, but its core net profit declined slightly, which dragged down the overall core net profit. The company's gross margin increased year on year, net profit margin remained stable, and profitability was guaranteed.

Operational real estate performed well, and land acquisition accelerated year-on-year

In the first half of 2025, the company's operating real estate business revenue was 12.11 billion yuan, up 5.5% year on year, and core net profit was 4.99 billion yuan, up 10.7% year on year. The company's operating real estate showed resilience, and both revenue and profit increased. Among the various types of operational real estate, shopping malls have shown more prominent advantages in terms of size and development potential. Currently, the company also has 33 shopping centers under development. According to Kerry, the company added 94.10 billion yuan in value from January to October 2025, an increase of 25.0% over the previous year. The company adheres to the principle of strategically leading investment and “measuring income for output”, rationally controls the pace of land acquisition, invests in the layout of Tier 1 and 2 cities, and supplements the land reserves of core cities.

The financial structure is healthy, and financing interest rates continue to decline

As of the first half of 2025, the company's balance ratio excluding advance payments was 56.12%, down 1.38pct year on year; net debt ratio was 39.63%, up 7.38pct year on year; short cash debt ratio was 1.95, up 0.01 year on year. As of the first half of 2025, the company's weighted average financing cost was 2.79%, down 0.32pct from the end of 2024. The company's three red line indicators remain green, the financial structure is healthy, the financing interest rate is low, and the debt level is manageable.

Risk Alerts

The downturn in the real estate industry has exceeded expectations, the company's advantage in the commercial real estate sector has declined, and the citation data is lagging behind or not being updated in a timely manner.