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<Research> HSBC Research Prefers CHINA RES LAND (01109.HK) Over CHINA RES MIXC (01209.HK), Heavy-Asset Landlords Seen Superior to Asset-Light Managers
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HSBC Global Investment Research published a report noting that as early as January this year, it highlighted that compared with the high premium valuation and already elevated market expectations for CHINA RES MIXC (01209.HK), CHINA RES LAND (01109.HK) offers better relative value. The market has been moving in this direction: CHINA RES LAND has accumulated a 32% gain year to date, while CHINA RES MIXC has fallen 4% (with the HSI flat over the same period). The macro backdrop is becoming less supportive. With subsidies being reduced and continued pressure in the labour market, retail sales have slowed markedly. This deceleration, coupled with rising shopping mall supply and intensifying competition, is putting pressure on rental income growth. At the same time, divergence is intensifying. High-end malls (CHINA RES LAND/ CHINA RES MIXC), despite a QoQ slowdown, have still significantly Outperformed the broader market, while the mass market segment, after showing resilience in 2025, is beginning to face more headwinds. Within the high-end segment, HSBC Global Investment Research maintains its preference: it continues to favor CHINA RES LAND (a heavy-asset landlord) over CHINA RES MIXC (an asset-light management company). The broker assigns a Buy rating to CHINA RES LAND with a target price of HKD43.8, and a Hold rating to CHINA RES MIXC with a target price of HKD44. The broker noted that landlords continue to benefit from structural re-rating. Their ability to spin off mature malls into real estate investment trusts provides a clear path to accelerate asset monetization and capture structural valuation premiums. This narrative is largely unaffected by short-term weakness in retail data, explaining why the broker prefers the heavy-asset CHINA RES LAND over the asset-light CHINA RES MIXC. In addition, the market is increasingly recognizing CHINA RES LAND’s strength in property development. HSBC Global Investment Research explained that CHINA RES MIXC and CHINA RES LAND have similar earnings sensitivity to mall revenue: every 1 ppts decline in mall revenue growth implies a 0.5 ppts reduction in core earnings growth. Nevertheless, given optimistic market consensus expectations and its valuation premium, CHINA RES MIXC appears more vulnerable to valuation de-rating. If retail sales momentum weakens further, the broker believes risks to its 2026 earnings growth target are rising. By contrast, it sees recent share price catalysts for CHINA RES LAND as more related to the residential market outlook and potential REIT spin-offs rather than the pace of rental income growth.(da/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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