Core Viewpoint - CICC has downgraded the profit forecast for China Overseas Property (02669) for 2025 and 2026 by 5% and 6% to RMB 1.6 billion and RMB 1.71 billion, respectively, reflecting a year-on-year growth of 6% and 7% [1] Group 1: Financial Performance - The company's 1H25 performance slightly missed market expectations, with revenue increasing by 4% to RMB 7.09 billion and net profit attributable to shareholders also rising by 4% to RMB 770 million [2] - The interim dividend per share is set at HKD 0.1, with a payout ratio of 40%, compared to 36% in 2024 and 35% in 1H24 [2] Group 2: Business Development - The company maintained stable external expansion, with a total annual contract value of approximately RMB 980 million in 1H25, remaining flat year-on-year, and the average annual contract value for projects worth over RMB 10 million increased by 17% [3] - The managed area increased by 5 million square meters compared to the end of 2024, primarily due to a reduction of 26.8 million square meters in the first half of the year, leading to a slight increase in the basic property gross profit margin by 0.1 percentage points to 13.6% [3] Group 3: Value-Added Services - Overall, value-added services faced pressure, with both residential and non-residential service revenues declining, primarily due to the overall market environment [4] - Revenue from residential value-added services decreased by 12% to RMB 610 million, while community asset operation services saw a 6% increase, and home life services and commercial operations dropped by 26% [4] - Non-residential value-added services were impacted by the real estate sector, while engineering services maintained double-digit growth [4] Group 4: Financial Management - The comprehensive collection rate showed slight improvement in 1H25, with the current collection rate increasing year-on-year, while the previous collection rate saw a slight decline [5] - Trade receivables grew by 1% year-on-year, which is lower than the revenue growth rate for the first half of the year [5] Group 5: Future Outlook - The company anticipates a stable or slightly improved operational trend in the second half of the year, as the scale of inefficient projects has returned to a reasonable level, reducing the pressure from project reductions [6] - The company is increasing efforts in asset operation services and expanding the coverage of certain home life services, which is expected to support business progress in the second half of the year [6]
中金：维持中海物业跑赢行业评级 目标价6.5港元