EB SECURITIES: Maintains "Buy" rating on CHINA OVS PPT (02669) as cash-rich dividend ratio increases.

EB Securities released a research report stating that considering the decline in growth of CHINA OVS PPT's value-added business, the company's net profit attributable to owners for 2026-2027 was lowered to 14.8/16.0 billion yuan, down from the original forecast of 17.7/19.1 billion yuan. The new forecast for 2028 was set at 17.1 billion yuan. As a state-owned property management company, the company still possesses strong valuation attractiveness. The "buy" rating was maintained. Key points from EB Securities: Events - Related party China Overseas Property Group's (CHINA OVS PPT) single-month sales in April increased by 20% year-on-year. - CHINA OVS PPT's revenue in 2025 increased by 6% year-on-year, with the dividend amount increasing by 9.3%. - In 2025, CHINA OVS PPT achieved revenue of 149.6 billion yuan, an increase of 6% year-on-year. Net profit attributable to owners was 13.7 billion yuan, a decrease of 9.7% year-on-year. While revenue grew steadily, profit was under pressure. The gross profit margin was 15.0%, a decrease of 1.6 percentage points from the previous year. - By the end of 2025, the company managed a total construction area of 480 million square meters. - Midland Realty, a related party, posted operating data for April 2026, achieving contract sales of 24.2 billion yuan, a 20.0% year-on-year increase. Cumulative sales from January to April totaled 75.7 billion yuan, a 13.7% increase year-on-year. The cumulative newly added equity land reservoir area from January to April was 634,000 square meters. Strong sales performance from related parties, significant growth potential in property management business, and increased dividend payout ratio. The strong sales performance from related parties, including China Overseas Property Group (CHINA OVS PPT), as well as the consolidation of China Overseas Property Group have shown significant growth potential in the property management business. With the addition of valuable land reserves and strong sales performance, it is expected that China Overseas Property Group will provide sufficient and quality property management projects in the future. In December 2025, the company injected capital into China Overseas Property Management to acquire a 70% stake, effectively consolidating it into the company and increasing revenue and market competitiveness. Continued optimization of business structure with steady growth in core business. The company's business structure continued to optimize, with basic property management/community value-added/non-owner value-added/parking sales revenue reaching 11.7/1.2/1.9/0.7 billion yuan in 2025, with year-on-year growth rates of +10.0%/-12.0%/+6.1%/-49.8% respectively. Basic property management revenue accounted for 78.4%, an increase of 2.3 percentage points year-on-year. In 2025, the company secured 90.9 million square meters of new property management orders, with 85.1% from independent third parties, signing new contracts worth 5.24 billion yuan. Despite deep adjustments in the real estate industry, the company's basic property management business continued to maintain steady growth. A weak demand in value-added services, such as retail consumption, premium home services, commercial service operations, and public space leasing assistance, led to slower revenue growth. Strong cash position and increased dividend payout ratio. As of the end of 2025, the company's cash and bank balance amounted to 6.27 billion yuan, a 7.5% increase year-on-year. Excluding special dividends, the company's dividend payout ratio in 2025 was 41.9%, a 6.1 percentage point increase year-on-year, showing continued growth in shareholder returns. Risk Warning: Increased competition in external expansion could lead to a decline in gross profit margin, and value-added services may not develop as expected.