CICC 2025 Business Operations Management Outlook: Focus on Resilience or High Dividend Investment Opportunities

CICC released a research report stating that the potential marginal improvement in the macro environment may provide a good foundation for the improvement of shopping mall operations, with the mainland luxury goods market pressure expected to gradually ease. Currently, the new supply of shopping malls is decreasing, and leading commercial operators with excellent business models, solid financial strength, and outstanding operational capabilities are expected to continue to increase their market share. It is recommended to evaluate the cost-effectiveness of comprehensive growth and value attributes, focus on high-quality shopping mall operations, and hold targets on the left side. CICC's main points are as follows: The potential marginal improvement in the macro environment may provide a good foundation for the improvement of shopping mall operations, with the pressure on luxury shopping malls expected to ease marginally. By 2024, the growth in retail sales and rents of shopping malls is showing a weakening trend, slightly turning upward, and if supportive policies continue to be implemented in 2025, social consumption willingness and ability are expected to be supported, thus providing a good foundation for mall operations. The structural differentiation between mass market and high-end mall operations may continue, but considering the potential stabilization of asset prices and the easing speed of outbound traffic, we believe that the pressure on luxury mall retail sales is expected to gradually ease. The new supply of shopping malls is decreasing, and the market share of top-quality companies is increasing. In the context of the stabilization of the distribution of consumer goods retail between online and offline channels, top shopping mall operators continue to deepen the operation of existing projects while expanding their scale and market share. Looking ahead, while the total number of shopping malls continues to grow, the pace of new openings is gradually slowing down. Leading commercial operators with excellent business models, solid financial strength, and outstanding operational capabilities are expected to continue to increase their market share. In comparison with Simon Property Group, a leading commercial asset management company in the United States, which has maintained internal same-store growth not weaker than the overall industry retail sales growth during the transition from incremental to stock supply on the supply side; if external growth is considered, its operating performance is superior. It is recommended to evaluate the cost-effectiveness of comprehensive growth and value, focus on high-quality shopping mall operations and holding targets on the left side. In terms of growth attributes, it is recommended to differentiate asset portfolio characteristics and combine enterprise business models to judge the sustainability of stable income and profit growth; In terms of value attributes, it is recommended to assess the solidity of enterprise balance sheets and cash flow statements based on asset quality and strategic thinking, and judge dividend potential and stability. For targets with high performance stability and growth potential, it is recommended to focus on the price-to-earnings ratio indicator and set up a layout on the left side based on the required yield target; for targets with high pro-cyclicality and strong shareholder return willingness, it is recommended to make trading decisions based on signals of negative news and setting a safety cushion for dividend yield. Risk warning: Stimulus for consumption is lower than expected, and the macroeconomic environment is weaker than expected.