Core Viewpoint - The company's shopping center segment has become a significant profit pillar, demonstrating operational capabilities that exceed industry peers, with retail sales growth of 20-25% year-on-year from January to September, compared to a 3.0% increase in social retail sales [1][2]. Group 1: Shopping Center Segment - The shopping center segment's gross profit contribution reached 56.3% in the first half of FY25, solidifying its status as a key profit driver [2]. - Retail sales during the National Day holiday increased by 25% year-on-year, significantly outperforming the 10.2% growth in key shopping districts in Shanghai [2]. - The company has opened 10 shopping centers by September and is on track to meet its target of 14 openings for the year, with expected revenue and gross profit growth rates of 18% and 27% respectively in FY25 [2]. Group 2: Property Management Segment - The company aims for an annual contract amount of approximately 1 billion yuan in third-party expansion, having completed nearly 800 million yuan by September [3]. - The residential segment's revenue and gross profit grew by 6.5% and 1.7% year-on-year, respectively, with gross profit margins impacted by value-added services [3]. - The company maintains a 100% dividend payout for 2023, 2024, and the first half of FY25, resulting in an attractive dividend yield of 4.4% among state-owned enterprises [3]. Group 3: Investment Rating and Valuation - The target price has been raised by 18% to HKD 51.84, primarily due to a 5% increase in the target price-to-earnings ratio to 23x, reflecting the strong performance of the retail segment [3]. - The company is expected to maintain a higher profit growth rate than its peers, with a diversified layout and an attractive dividend yield, reinforcing its competitive advantage among state-owned enterprises [3].

Core Viewpoint - The company's 1H25 performance slightly underperformed market expectations, with revenue and net profit both growing by 4% year-on-year, reaching 7.09 billion yuan and 770 million yuan respectively, primarily due to a decline in other income and an increase in impairment provisions [1][2] Financial Performance - Revenue for 1H25 increased by 4% to 7.09 billion yuan, while net profit also rose by 4% to 770 million yuan, slightly below market expectations [1] - The interim dividend per share is set at 0.1 HKD, with a payout ratio of 40%, compared to 36% in 2024 and 35% in 1H24 [1] Business Development - The company maintained stable external expansion, with a total annual contract value of approximately 980 million yuan for 1H25, with over 60% from urban operations, remaining roughly flat year-on-year [1] - The average annual contract value for projects worth over 10 million yuan increased by 17%, indicating a steady improvement in the quality of external expansion [1] Value-Added Services - Overall, value-added services faced pressure, with both residential and non-residential service revenues declining; residential services saw a 12% drop to 610 million yuan, while community asset operation services grew by 6% [2] - Engineering services, however, maintained double-digit growth, indicating resilience in this segment [2] Collection and Management - The overall collection rate showed slight improvement, with the current collection rate increasing year-on-year, while the previous period's collection rate saw a minor decline [2] 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 reasonable levels, reducing future pressure [2] - Increased efforts in asset operation services and certain home life services are expected to support business progress in the latter half of the year [2] Profit Forecast and Valuation - The profit forecasts for 2025 and 2026 have been revised down by 5% and 6% to 1.6 billion yuan and 1.71 billion yuan respectively, with expected year-on-year growth of 6% and 7% [2] - The company maintains an outperform rating and a target price of 6.5 HKD, implying a 22% upside based on a 12x 2025 P/E ratio, while currently trading at a 10x 2025 P/E ratio [2]