On August 26th, China Overseas Land Development Co., Ltd. (0688.HK, hereinafter referred to as "China Overseas Land") released its 2026 interim results. In the first half of this year, Zhonghai Real Estate achieved sales of 134.35 billion yuan, a year-on-year increase of 11.8%. Its equity sales scale ranked first in the industry and it was the only TOP10 developer to achieve double-digit sales growth.

In the first year of the 15th Five Year Plan, China Overseas Land&Investment Corporation submitted its first answer sheet for 2026. The industry is bottoming out and continuing to move towards stability, and new models of real estate are being explored and constructed in the context of "stabilizing the real estate market" and "urban renewal". At the enterprise level, there have been qualitative changes in organizational structure, decision-making mechanisms, and product enhancement compared to the past.

If a company does not undergo profound and intrinsic changes, it will face difficulties in such a transformation. In the process of bottoming out the market, "certainty" is the cornerstone of stable progress. Since 2026, Zhonghai Real Estate has adhered to the core city strategy, deepened its organizational structure, and steadily improved in the areas of existing operations and urban renewal. At a critical moment of industry transformation, we answered the new kinetic energy plan under the new mode.

Focus on the core city strategy and maintain stability

In terms of weight, China Overseas Land Development's contracted sales in Beijing, Shanghai, Guangzhou, Shenzhen, and Hong Kong amounted to 78.99 billion yuan, accounting for 68.6%. This is the accumulation of China Overseas Land Development's strategic focus and deep regional cultivation. Yan Jianguo, Chairman of China Overseas Land Development, stated that "the company's long-term layout has highly focused on high-quality areas in core cities, which is highly compatible with the opportunity for market stabilization in this round." He also pointed out that the return of asset value of land reserves in first tier cities is listed as the top of the "three new driving forces" for the future.

Contract sales of 24.75 billion yuan, 22.5 billion yuan, 14.92 billion yuan, and 13.31 billion yuan were achieved in Beijing, Shenzhen, Shanghai, and Hong Kong, respectively. Looking ahead to the second half of the year, multiple major projects will enter the market in Shanghai, Beijing, and Hong Kong, with the Anlan Shanghai project alone having a value of over 52 billion yuan. As these projects are gradually launched, it is expected to drive the company's sales growth to maintain a leading position.

In terms of land investment, maintaining investment determination, the "basic law" of China Overseas Land Development is "one for one investment", with a high focus on safety and certainty. In the first half of the year, the company added 9 new land purchases with an equity land price of 7.66 billion yuan. Since the beginning of July, the company has purchased 9 new land parcels in cities such as Beijing, Shenzhen, Hong Kong, and Taiyuan, with an equity land price of 25.68 billion yuan. As of now, the total equity land price of the company's newly purchased land this year is 33.34 billion yuan.

China Overseas Land Development aims to maintain an annual target of 80-100 billion yuan for new land purchases. Relying on sufficient capital reserves and stable finances, the company adheres to the principle of prudent investment and continues to consolidate its industry-leading sales scale and profitability.

Key second tier 'tailored to the city' and 'good houses' empower counter trend sales

For second - and third tier cities, Zhonghai adopts tailored policies and actively strives for progress. Yan Jianguo pointed out that the realization of structural opportunities in key second tier cities is another new driving force for the company. The company effectively seized the opportunity to release the demand for improvement in key second tier cities, adhered to the strategy of "core areas+benchmark products", and made precise investments in cities such as Shenyang, Changchun, Shijiazhuang, Xiamen, and Haikou, creating multiple regional benchmark projects.

Digging into the reasons, the strong sales stem from the continuous improvement and enhancement of "Zhonghai Haofang", the implementation of the "LivingOS system", and the upgrade of the "Jinggong+" construction system. As of mid-2026, the system has entered the substantive implementation stage of more than 20 projects nationwide, covering a wide range of products from high-end residential properties in first tier cities to improvements in second tier cities. Projects such as Qingdao Qingyun Wanli, Shijiazhuang Wanchen Huazhang, and Shenyang Ruiwen Xihe in second tier cities are selling well against the trend.

In the first half of 2026, Zhonghai Real Estate delivered a total of 21000 residential units, with a customer satisfaction score of 90, ranking among the top three in the industry. Zhonghai Haofang received high praise from end users.

On March 16, 2026, at the second batch of 'Good House Construction System Practice Project Awarding Ceremony' held by China State Construction Engineering Corporation in Beijing, Zhonghai Wupan (Dalian Aixianli, Nanjing Jiangwanjing, Ningbo Jiangdong Xingyue, Tianjin Time Mirror, Hefei Yuefu) was awarded; The Dalian Aixianli project relies on the 231 fine engineering standards of Zhonghai Precision Industry and the system (with more than 200 precision details implemented), fully responding to the "6633" residential pain points.

Commercial real estate dual wheel operation crosses the cycle 'stabilizer'

In addition to residential properties, Zhonghai Real Estate also plays a role in urban operations, covering multiple formats such as office buildings, shopping centers, star rated hotels, and long-term rental apartments. Relying on the collaborative operation capabilities of multiple formats and abundant commercial assets, the rental and operating income of commercial properties have steadily increased. The value released by commercial assets has become the third new driving force for the company.

According to the midterm report, in the first half of 2026, China Overseas Land Development achieved a commercial operating revenue of 3.58 billion yuan, with a "dual core" of office buildings and shopping centers, accounting for 80% of the total revenue, forming the operating foundation - China Overseas Land has 71 Grade A office buildings (the largest office developer in China) and 32 shopping centers, and its scale advantage itself is the first line of defense against the cycle.

At the same time, with the inclusion of office buildings, hotels, rental housing, and other commercial real estate REITs, the realization of the value of the company's existing commercial assets has ushered in a clear policy and market window. Based on the construction of a multi-level REITs platform, Zhonghai Real Estate has a light asset management scale of approximately 2.5 million square meters. In addition, Zhonghai Real Estate has also begun to explore the silver economy and opened the Beijing Jincheng Health and Wellness Project.

The dual wheel rotation of light and heavy constitutes a solid step for Zhonghai to transform from a "developer" to a comprehensive real estate enterprise that combines "development+asset management+multi business operation".

At the fundamental level of the company, the credit rating industry is leading, and the debt structure continues to optimize. Zhonghai Real Estate is the only domestic real estate listed company in the industry to receive an A-level rating from two international rating agencies. Its ending asset liability ratio is 51.6%, net borrowing ratio is 27.2%, and its interest bearing debt scale has decreased by RMB 10.15 billion compared to the beginning of the year. Its financial security is stable.

In the first half of the year, Zhonghai Real Estate had a net operating cash inflow of RMB 28.52 billion, with cash on hand of RMB 121.1 billion at the end of the period, accounting for 13.7% of total assets and maintaining good liquidity. At the same time, the average financing cost, distribution and administrative fees of Zhonghai are 2.76% and 2.8% respectively, continuing to maintain the lowest range in the industry, with distribution expenses decreasing by 20.8% year-on-year.

In the first year of the 15th Five Year Plan, the real estate sector bears the responsibility of stabilizing development and boosting domestic demand. As a core state-owned enterprise, Zhonghai Real Estate will focus on the main channel of real estate development and operation, strengthen the dual wheel drive of residential development and operational business, optimize upstream and downstream ecological business, consolidate and enhance its leading position in the Chinese real estate industry, and strive to create a world-class enterprise with a strategic business structure of "one specialty, two drives, and excellent ecology".