UOB Kay Hian
Date of Report: Tuesday, 26 August 2025
China Overseas Property Holdings (2669 HK): 1H25 Results Review – Quality Growth Amid Slower Expansion, Special Dividend Celebrates 10th Anniversary
Overview: A Mixed Bag of Results for China Overseas Property Holdings
China Overseas Property Holdings (COPH), a subsidiary of China Overseas Holdings, remains an industry leader in property management across China. The first half of 2025 has presented investors with a nuanced picture—earnings grew modestly, efficiency improved, and the company marked its 10th listing anniversary with a special dividend. However, revenue growth was restrained by weaker performance in value-added services (VAS) and slower external expansion, leading to more conservative earnings forecasts for the coming years.
Stock Snapshot and Key Metrics
- Share Price: HK\$5.85
- Target Price: HK\$7.00 (down from HK\$7.35)
- Upside Potential: +16.4%
- Market Cap: RMB 19,211.2m (US\$2,459.4m)
- FY24 NAV/Share: HK\$1.86
- FY24 Net Cash/Share: HK\$0.82
- Dividend Yield (2025F): 3.2%
- PE (2025F): 11.2x
1H25 Financial Highlights: Growth, Margins, and Dividends
| Metric |
1H25 |
2H24 |
1H24 |
YoY Change |
HoH Change |
| Revenue (RMB m) |
7,089 |
7,185 |
6,838 |
+3.7% |
-1.3% |
| Property Mgmt Services |
5,596 |
5,500 |
5,166 |
+8.3% |
+1.7% |
| Community VAS |
608 |
697 |
687 |
-11.6% |
-12.8% |
| VAS to Non-Owners |
858 |
917 |
912 |
-5.9% |
-6.5% |
| Carparking Trading |
27 |
71 |
74 |
-62.9% |
-61.4% |
| Gross Profit |
1,202 |
1,177 |
1,148 |
+4.7% |
+2.1% |
| Net Profit |
769 |
773 |
738 |
+4.3% |
-0.5% |
| EPS (RMB/share) |
0.23 |
0.24 |
0.22 |
+4.3% |
-0.5% |
| Dividend Per Share (RMB basic) |
0.090 |
0.10 |
0.085 |
+5.9% |
– |
| Dividend Per Share (Incl. Special) |
0.10 |
0.10 |
0.085 |
+17.6% |
– |
| Payout Ratio |
38.4% |
40.3% |
37.9% |
+0.6% |
– |
Operational Review: GFA Expansion and Portfolio Optimization
COPH’s managed gross floor area (GFA) reached 436.1 million sqm in 1H25, a net increase of 5.0 million sqm since end-2024. Notably, the company exited underperforming contracts totaling 26.8 million sqm to refine project quality, while newly signed GFA amounted to 31.8 million sqm, with 84% sourced from third parties. The managed portfolio shifted further toward residential projects, now comprising 72.6% of total GFA.
| Metric |
Jun 24 |
Dec 24 |
Jun 25 |
YoY % |
HoH % |
| Total GFA (m sqm) |
422.7 |
431.1 |
436.1 |
+3.2% |
+1.2% |
| From China State Construction/Overseas Group |
250.3 |
261.3 |
265.5 |
+6.1% |
+1.6% |
| From Third Party |
172.4 |
169.9 |
170.6 |
-1.0% |
+0.4% |
| Residential Projects |
294.4 |
307.5 |
316.8 |
+7.6% |
+3.0% |
| Non-Residential Projects |
128.3 |
123.6 |
119.3 |
-7.0% |
-3.5% |
Revenue Breakdown: Core Strengths and Segment Weaknesses
- Property management services – Revenue up 8.3% YoY, driven by expanded GFA under management.
- VAS to non-owners – Revenue fell 5.9% YoY, with pre-delivery services down 19.0% and consultancy down 76.2% YoY.
- VAS to owners – Revenue dropped 11.6% YoY, as asset management gains (+6.3%) were offset by home/lifestyle services (-26.3%).
- Carparking trading – Revenue saw a sharp decline of 62.9% YoY.
Both VAS segments weakened due to property market softness and cautious consumer spending.
Operational Efficiency: Cost Control and Collection Performance
- Gross profit margin for property management services rose to 15.5% (up from 15.4%).
- Community VAS margin surged to 35.2% (from 30.2% YoY).
- SG&A to revenue ratio improved significantly to 2.1% (from 2.7% YoY), reflecting strong cost control and organizational optimization.
- Trade receivables dropped 2.8% YoY to RMB 3,218m, highlighting better fee collection.
- Cash position remained robust at RMB 5.67b, down 2.4% HoH, partly due to special dividend payout.
Guidance and Strategic Focus: Quality Over Quantity
COPH has signaled a shift in strategy away from aggressive expansion and toward high-quality development and technological innovation. The company has not set specific earnings growth targets but remains committed to growing profit faster than revenue. Management’s guidance reflects concerns over future revenue trends given slower external expansion.
Earnings Revision and Risks: Conservative Outlook Ahead
Forecasts for 2025, 2026, and 2027 have been cut by 3.2%, 5.7%, and 8.1% respectively, mainly to account for weaker VAS segment performance and slower external expansion. Key risks for COPH include the potential for faster-than-expected wage increases and unexpected tightening of property management sector regulations.
Valuation and Recommendation: BUY Maintained, Lower Target Price
COPH is rated BUY, with a lower target price of HK\$7.00, derived using a DCF model at a WACC of 11.7%. The target price reflects a 13.3x 2025F PE, while COPH currently trades at 11.2x 2025F PE. The stock’s catalysts include faster-than-expected business expansion and favorable government policies for upgrading residential communities.
Key Financials and Forecasts
| Year |
Net Turnover (RMB m) |
EBITDA (RMB m) |
Operating Profit (RMB m) |
Net Profit (RMB m) |
EPS (fen) |
PE (x) |
Dividend Yield (%) |
ROE (%) |
| 2023 |
13,051 |
1,766 |
1,683 |
1,343 |
40.8 |
13.1 |
2.6 |
36.8 |
| 2024 |
14,024 |
1,997 |
1,894 |
1,511 |
46.0 |
11.7 |
3.4 |
32.7 |
| 2025F |
14,487 |
2,068 |
1,988 |
1,567 |
47.7 |
11.2 |
3.2 |
27.9 |
| 2026F |
14,971 |
2,146 |
2,066 |
1,625 |
49.5 |
10.8 |
3.3 |
24.5 |
| 2027F |
14,996 |
2,162 |
2,082 |
1,636 |
49.8 |
10.8 |
3.4 |
21.3 |
Sustainability and Financial Health
- Net cash to equity remains very strong, with a ratio of -44.2% in 2025F, indicating ample liquidity.
- Dividend payout ratio remains healthy, standing at 39% including special dividend for 1H25.
- ROE is expected to trend down from 32.7% in 2024 to 21.3% by 2027F, reflecting slower growth and more cautious expansion.
Share Price Catalysts and Outlook
COPH’s share price performance could be positively influenced by:
- Accelerated business expansion.
- Government policies favoring the upgrading of old residential communities.
Management continues to stress quality and technology-driven development as the path forward.
Conclusion: Stable Core, Selective Expansion and Shareholder Rewards
COPH’s 1H25 report underscores its commitment to operational efficiency, prudent expansion, and shareholder returns, including a special dividend for its 10th anniversary. While growth is slowing in certain segments, the company’s fundamentals remain robust and its focus on quality and innovation positions it well for future opportunities. Investors should continue to monitor the pace of external expansion, regulatory changes, and cost trends in the sector for further developments.
