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<Research>Citi: CN Property Sector 4Q Overall Performance Misses; Profit Forecasts/ TPs for CHINA RES LAND/ LONGFOR GROUP Cut
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China's real estate sector remained weak in 4Q25, with sales continuing to decline in November, Citi Research issued a research report saying. Sales for 37 listed property developers fell 36% YoY in November, and December sales are projected to drop 40% YoY, resulting in an overall 39% YoY decline for 4Q25. Overall performance of China's real estate sector was below expectations in 4Q25, the broker noted. Given the overall market weakness, Citi Research lowered its earnings forecasts and target prices for CHINA RES LAND (01109.HK), LONGFOR GROUP (00960.HK) and POLY DEVELOPMENTS (600048.SH). Following CHINA RES LAND's Shenzhen Bay project achieving single-day sales of RMB13.1 billion, its December sales are projected to reach RMB19 billion. However, its total sales for 11M25 decreased by 19% YoY. The broker lowered its 2025-2027 earnings forecasts by 10%-11% due to lower profit margins, and dropped its target price from $39.62 to $35, with rating kept at Buy. Due to the industry's continued weakness in 4Q25, Citi Research lowered its net asset value (NAV) estimation for LONGFOR GROUP based on lower development property profit margins, and reduced its 2025-2027 earnings forecasts by 25-89%. The broker also cut its target price from $15.8 to $13.8, with rating kept at Buy. POLY DEVELOPMENTS is an industry consolidator with continuously optimized operations. Due to lower property development profit margins, Citi Research lowered its 2025-2027 earnings forecasts by 22-83%. Based on the revised earnings projections and an unchanged 12x projected PE ratio for 2026, the broker trimmed its target price from RMB9.5 to RMB7.5, with rating kept at Buy. Citi Research's ratings and target prices for the aforementioned Chinese developers are listed below: Stock| Rating| TP (HKD) CHINA RES LAND (01109.HK)|Buy| 39.6->35 LONGFOR GROUP (00960.HK)|Buy|15.8->13.8 POLY DEVELOPMENTS (600048.SH)|Buy|RMB9.5->RMB7.5 AAStocks Financial News Website: www.aastocks.com |
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