Zhongtai Securities maintained its "Buy" rating on CHINA OVS PPT (02669), highlighting the company’s steady growth in core property management operations during the first half of 2025, enriched third-party expansion, and improved gross margins, demonstrating strong resilience. The firm expects CHINA OVS PPT to sustain moderate growth in scale and performance, supporting long-term high-quality development.

Key financial highlights from the 2025 interim report include: - Revenue reached RMB7.09 billion, up 3.7% year-on-year (YoY). - Net profit attributable to equity shareholders rose 4.3% YoY to RMB770 million, outpacing revenue growth. - Gross margin edged up 0.2 percentage points (pct) to 17.0%, with core property management service revenue growing 8.3% YoY and its margin improving by 0.1 pct to 15.5%. - Sales and administrative expenses dropped 18.6%, driving total expenses down 17.8%. The expense ratio fell 0.6 pct to 2.2%, reflecting enhanced cost control and profitability.

**Expansion Strength and Contract Diversification** In H1 2025, CHINA OVS PPT secured new contracts totaling 30 million square meters, 84.0% of which came from third parties. The total value of new contracts amounted to approximately RMB2.26 billion. The company optimized its portfolio by exiting certain projects, lifting managed area to 440 million square meters by end-H1 (up slightly from end-2024). Residential and non-residential projects accounted for 41.0% and 59.0% of new contracts, respectively, improving risk diversification.

**Dividend Growth Enhances Shareholder Returns** The interim dividend was raised to 9 HK cents per share, supplemented by a special 1 HK cent dividend commemorating its 10th listing anniversary. Total dividends represented 39.2% of net profit attributable to shareholders, up 1.5 HK cents per share YoY. Stable payouts amid operational improvements aim to boost investor confidence.

**Risks**: Potential downside risks include a sharper-than-expected property sector slowdown, receivables impairment, and lower-than-anticipated property fee collection rates.