00081 Overview

February Sales Performance: CH OVS G OCEANS reported property contracted sales of RMB2.3 billion in February, with a total contracted GFA of 184,000 square meters, reflecting a year-on-year increase of 6.4% in sales but a slight decrease of 1.3% in GFA.

Year-to-Date Sales Figures: From January to February, total property contracted sales reached RMB4.712 billion and total contracted GFA was 398,600 square meters, showing year-on-year increases of 7.9% in sales and 9.4% in GFA.

Subscription Sales Data: As of the end of February 2026, property subscription sales amounted to RMB437 million with a subscription GFA of 34,600 square meters.

Land Acquisition Status: The Group did not acquire any land parcels in February 2026.

Market Performance: The Hang Seng Index (HSI) fell by 465 points (1.7%) to close at 26,567, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines, with market turnover reaching $257.58 billion.

Active Heavyweights: Major stocks like Meituan, Ping An, and HKEX saw significant drops, with Meituan down 3.2% and Ping An down 2.2%. Xiaomi was the only heavyweight to gain, closing up 0.9%.

Notable Declines: Several constituents of the HSI and HSCEI, including Zijin Mining and Sinopec Corp, experienced substantial losses, with Zijin Mining dropping 7.6% and Sinopec Corp down 5.1%.

Gainers and New Highs: Despite the overall market decline, some stocks like Haidilao and WH Group saw gains, with Haidilao up 3.1% and WH Group hitting a new high, closing up 0.9%.

Market Performance: The Hang Seng Index (HSI) fell by 484 points (1.8%) to 26,547, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines of 1.6% and 1.7%, respectively.

Active Heavyweights: Major stocks like Meituan, Ping An, Alibaba, and Tencent saw significant drops, with Meituan down 4.5% and Tencent down 1.7%, amidst high short selling activity.

Notable Declines: Companies such as Zijin Mining and China Life faced substantial losses, with Zijin Mining dropping 5.2% and China Life down 4.9%, reflecting a broader trend of declining stock prices.

Gainers and Losers: Healthyway Inc. experienced a notable increase of 18.8%, while Mongol Mining and Fit Hon Teng saw significant declines of 13.7% and 11.3%, respectively, indicating volatility in the market.

Earnings Forecast: China's real estate sector is expected to see a significant decline in earnings for covered companies in 2025, with firms like CHINA RES LAND, CHINA OVERSEAS, and C&D INTL GROUP projected to experience a 15-20% year-on-year decrease.

Market Sentiment: Despite the anticipated earnings drop, CICC maintains a positive outlook on the real estate sector for 2023, suggesting potential for positive returns and good value in stock selection for 2026.

Company Performance: Some companies, including GREENTOWN CHINA and YUEXIU PROPERTY, may report marginal profits, while others like LONGFOR GROUP and URBAN CONS DEV could face slight losses, with a few firms expected to see steady core profits.

Stock Ratings: CICC has kept its ratings and target prices unchanged for various Chinese developers, highlighting stocks such as BINJIANG GP and SEAZEN HOLDINGS as outperformers in the market.

Fitch Rating Affirmation: Fitch has affirmed CH OVS G OCEANS' Long-Term Foreign-Currency Issuer Default Rating at "BBB" with a Stable Outlook, and assigned the same rating to its proposed senior unsecured notes and dim sum bonds.

Comparison with Parent Company: The rating for CH OVS G OCEANS is lower than the Standalone Credit Profile of its parent company, CHINA OVERSEAS, which is rated "BBB+" due to CH OVS G OCEANS' limited scale and lower significance in national housing construction goals.

Citi's Ratings for Chinese Property Developers: Citi has provided investment ratings and target prices for various Chinese property developers, with ratings ranging from "Buy" to "Sell/High Risk" based on their performance and short selling ratios.

Target Prices Overview: Target prices for selected developers include Agile Group at HKD 0.53, C&D International Group at HKD 22.5, and China Overseas at HKD 17.2, reflecting varying levels of investor confidence.

Citi's Ratings for Brokerage Platforms: The investment ratings for Chinese brokerage platforms and project managers also indicate a "Buy" recommendation for companies like KE Holdings and Greentown Management, with target prices set at USD 22.6 and HKD 3.45, respectively.

Market Reactions and Short Selling: The report highlights significant short selling activity across various stocks, indicating market volatility and investor caution, particularly in the context of the Chinese real estate sector.