Morgan Stanley has released a research report stating that CHINA RES LAND (01109) is entering a second phase of value re-rating, supported by increasing market confidence in the recovery of its development business. The firm has raised its target price from HK$39.3 to HK$42.6 and maintains its status as a top pick with an "Overweight" rating.

Morgan Stanley believes the gross margin for CHINA RES LAND's development business has bottomed out. Supported by rising retail market share and high-quality mall projects, the company's robust leasing business is expected to increase its contribution to recurring earnings to approximately 60% by 2028 or earlier, even after the sale of investment properties. This is anticipated to lift the valuation to a price-to-earnings ratio of 10–12 times.

Concurrently, the bank has raised its forecast for the company's core earnings for 2026-2028 by approximately 1-3%. The revised estimates now stand at RMB 23.455 billion, RMB 24.93 billion, and RMB 27.157 billion, respectively. This adjustment reflects better sales, higher development business gross margins, and the impact of asset sales on rental income.