CICC has released a research report maintaining its earnings forecast for CHINA RES MIXC (01209), along with an Outperform rating and a target price of HK$48. This valuation corresponds to 21 times projected 2026 core price-to-earnings ratio and implies approximately 23% upside potential. The stock currently trades at 17.4 times 2026 estimated core earnings with a 5.7% expected dividend yield for 2026.
1H26 results aligned with market expectations
The company reported its first-half 2026 results with revenue reaching RMB 9.22 billion, representing an 8% year-on-year increase, while core net profit climbed 11% to RMB 2.23 billion, both in line with market consensus. The company declared an interim dividend of RMB 0.98 per share, translating to a 100% payout ratio based on core net profit, with 40% of that being a special dividend. The interim dividend corresponds to a current dividend yield of 2.8%.
Shopping mall segment maintains high-quality operational efficiency with expanding market share
Retail sales across managed shopping malls grew 21.7% year-on-year in 1H26, with same-store sales growth of 10.2% continuing to significantly outperform total social retail sales growth. Notably, luxury shopping malls delivered same-store growth of 11.0%, slightly surpassing the overall average. The shopping mall segment's gross margin remained stable compared to the same period last year, while the net operating profit margin for property owners improved by 0.7 percentage points year-on-year to 68.9%, driving a 17% increase in net operating profit for property owners. During the first half, the company opened three new shopping malls, bringing the total to 138, with 116 projects ranking among the top three in their local markets by retail sales. Additionally, the company secured 12 new third-party projects during the period, expanding its pipeline to 80 projects by the end of June.
Property management segment demonstrates resilience amid headwinds with strong focus on collections and cash flow management
In the first half of 2026, the property management segment generated 3% year-on-year revenue growth with gross profit remaining essentially flat, showing resilience despite macroeconomic and industry pressures. The collection rate improved by 0.3 percentage points year-on-year to 74.7%, while the outstanding receivables recovery rate saw a year-on-year decline. The company continues to anchor on "profits with cash flow," with effective operating net cash flow covering over 70% of core net profit during the period, up 1.5 percentage points from the previous year. After excluding declared but undistributed dividends, the company holds broad cash reserves of RMB 15.19 billion.
Steady progress toward full-year targets with accelerated openings expected in 2027
The company's first-half performance demonstrated quality growth across both operations and financial metrics, delivering on its initial annual targets in terms of profitability and dividends, with both full-year 2026 core net profit and earnings per share dividend expected to achieve double-digit growth. Looking ahead to the second half, CICC anticipates the company will continue its steady progress toward annual operational targets, supported by ongoing new commercial project openings, with 12 projects expected to launch in 2026 and 16 in 2027, rapid growth in the ecosystem business segment, and continued expense optimization. The research house expects that with the company's strategic emphasis on cash flow management, full-year operating cash flow will remain healthy, providing a solid foundation for achieving its annual dividend objectives.
Key risks
Potential risks include more severe-than-expected pressures on the overall consumption environment or the property management operating landscape.