UBS has released a research report indicating that since the shift in pre-sale model at the end of August, shares of CHINA RES LAND (01109) have declined approximately 14%, reflecting investor concerns over its property development operations. The bank estimates that even if the property development business were valued at zero, the recurring business would be worth around HK$27 per share, maintaining a "Buy" rating and an unchanged price-earnings-based target price of HK$45.

Potential catalysts include possible price increases by CHINA RES LAND or other developers. The bank assumes the property development business contributes no value or earnings and values the recurring business using two methodologies. It estimates core profit from recurring income operations in 2026 at RMB 12.8 billion, up 10% year-on-year. Additionally, it projects asset divestment and disposal gains of RMB 5 billion in 2026, sustaining an annual level of RMB 5 billion from 2026 to 2030 under the 15th Five-Year Plan. UBS classifies disposal gains from the property development business under recurring income operations.

Based on a 37% payout ratio and a 4% dividend yield, the implied value stands at HK$27 per share. Should the recurring income business, including disposal gains, be assigned a 10x price-to-earnings multiple, the value would rise to HK$29.1 per share.