We forecast CR MixC's FY25E revenue to increase by 6.5% YoY to RMB 18.2bn, where the residential segment is flat YoY, dragged by VAS biz. During the period, we expect the commercial segment to grow 13.8% YoY, mainly because revenue growth of shopping mall slowed to 18% on a high base (30% in FY24 driven by one-off factors). We expect core NP to rise 10.8% YoY to RMB 3.9bn in FY25E, underpinned by stable GP margin in basic PM, continued improvement in GP margin of shopping mall, and lower SG&A ratio. Overall, we maintain FY25-27E revenue forecasts unchanged, but cut core NP forecasts by 4% to reflect a more reasonable margin expansion pace. We raise our target P/E multiple by 9% to 25x, reflecting reduced reliance on residential biz, strengthened sector leadership, and enhanced scarcity premium amid capital allocation demand. We raise our TP by 4% to HK$53.96, equivalent to 25x 2026E PE. Given the long-term investment value of the Company, FY25 results at the lower end of guidance range may trigger share price pullback, and thus we advise investors to build positions proactively.
Shopping mall biz: FY25E retail sales growth is expected to lie in the 20- 25% range, with 14 luxury malls growing faster, mainly benefiting from new consumption formats such as trendy toys, gold & jewelleries, and outdoor gears etc. We expect related consumption to continue to outperform peers in 2026 amid ongoing geopolitical turbulence and domestic asset price pressure. We estimate the segment’s FY25E revenue to increase 18% YoY (vs. 30% in FY24), primarily due to a high base (one-off). On third-party expansion, the company secured 11 projects by end-Nov, exceeding the fullyear target of 10, and completed the target of 14 new openings. We expect the GP contribution from shopping mall biz to reach 60% in FY25E, lifting the entire GP contribution of commercial operations segment to above 70%.
Residential biz: We expect segment revenue to be broadly flat (+1.3% YoY) in FY25E, with basic PM remaining stable amid sector headwinds, up 8.7% YoY. Non-owner VAS and community VAS revenues each declined 30%+ YoY, dragged by shrinking new home market and accounting method changes. Segment GP margin remained stable. Third-party expansion reached RMB 940mn by end-Nov, largely on track to meet the full-year target of RMB 1.0bn.
100% payout can be expected. We see a high likelihood that the company will maintain a 100% payout ratio (60% ordinary + 40% special), based on: 1) no clear plan for large-scale capital deployment at present; and 2) according to recent PM sector practice, when results land at or below guidance, firms tend to use a higher payout ratio to stabilize market sentiment.