Goldman Sachs: Raises the target price for CHINA RES LAND (01109) to HKD 38.8, maintains "Buy" rating.

Goldman Sachs has released a research report stating that CHINA RES LAND (01109) achieved performance in the first half of the year that met expectations, with core profit increasing by 2% year-on-year to RMB 10.2 billion. The bank has raised the company's target price from HKD 36.6 to HKD 38.8, maintaining a "Buy" rating, and expects an average dividend yield of around 4% from 2026 to 2028. Goldman Sachs has adjusted its contract sales forecasts for CHINA RES LAND for 2026 to 2028, increasing the 2026 forecast by 1%, keeping 2027 unchanged, and decreasing the 2028 forecast by 6%, while expecting a 3% year-on-year decline in contract sales in the second half of this year to RMB 119 billion. The bank has also adjusted its forecasts for revenue recognition from developed properties for 2026 to 2028, decreasing the 2026 forecast by 7%, increasing the 2027 forecast by 1%, and increasing the 2028 forecast by 2%, reflecting unrecognized sales of RMB 252 billion as of the end of the first half, as well as the updated contract sales forecast. Due to the company's intensified efforts to reduce inventory, the bank has lowered the profit margin for revenue from developed properties by 2.5 percentage points, while raising the investment property revenue forecast by an average of approximately 2.5%. Goldman Sachs now expects CHINA RES LAND's core profit to decline by 10% year-on-year in 2026, increase by 7% in 2027, and increase by 4% in 2028.