CR Land's Recurring Earnings Should Maintain Solid Growth and Support Its Margin

China Resources Land, or CR Land, is distinctive among leading Chinese real estate developers as it enjoys relatively large exposure to investment property businesses. Riding on the success of the MixC commercial complex, the high-end retail commercial projects in top cities of China, CR Land is transitioning from predominantly developing residential properties to expanding mixed-use projects, including shopping malls, offices and hotels. As residential project sales continue to underpin CR Land’s cash inflow, we expect the firm to add to its investment property portfolio with strong recurring income and healthy profitability in higher-tier cities. We assume that non-property-development income will continue to drive mid-single-digit growth and will represent around 40% of the firm’s earnings in 2029. Also, the fast-growing investment properties imply increasing visibility of recycling capital through REIT listing in China.