Core Viewpoint - Goldman Sachs reports that China Resources Land (01109) experienced a 7% year-on-year decline in core profit to 10 billion RMB in the first half of the year, falling short of the bank's expectations for flat earnings in the fiscal year 2025, primarily due to provisioning issues [1] Financial Performance - The bank has raised its revenue forecasts for China Resources Land for the fiscal years 2025-2027 by an average of 4% following the earnings release [1] - Goldman Sachs maintains its earnings per share forecasts for the fiscal years 2025-2027 [1] Valuation Adjustments - After incorporating the latest land acquisitions, Goldman Sachs has increased the net asset value (NAV) for 2025 from HKD 40.6 per share to HKD 42.2 per share [1] - The target price has been adjusted from HKD 36.5 to HKD 38, based on a 10% discount to NAV [1] Future Outlook - Goldman Sachs expresses optimism regarding the recovery of profit margins for China Resources Land, citing several factors: - Continued focus on land reserves in first- and second-tier cities - Optimization of new project sales structure - Improvement in cash profit margins from new acquisition projects year-to-date - A cautious yet accelerated land reserve strategy prioritizing profitability, which supports profit growth [1]

Core Viewpoint - Morgan Stanley has downgraded Greentown China (03900) from "Overweight" to "Underweight," citing concerns over the company's ability to recover profits and achieve sales growth due to its balanced approach to reducing land reserve risks [1] Summary by Relevant Categories Company Performance - Greentown China is adopting a more balanced strategy to mitigate land reserve risks, which may slow down its real estate sales growth in the coming year [1] - The company's gross margin performance is expected to be below expectations, impacting its profit recovery [1] Financial Projections - Morgan Stanley believes that Greentown China will require a longer time frame than anticipated to restore profits to levels seen before the decline in 2022 [1] - The firm has revised its earnings estimates for Greentown China for 2025 to 2027 down by 15%, 35%, and 22% respectively, reflecting weak real estate sales and a slowdown in margin recovery [1] Valuation - The target price for Greentown China has been reduced from HKD 11.62 to HKD 8.55, indicating that the current valuation is considered too high [1]