Bank of America Securities issued a research report maintaining a "Buy" rating on CHINA OVERSEAS (00688). However, due to a downward revision in earnings forecasts, the target price has been reduced from HK$16 to HK$14.5, which corresponds to a projected 2027 price-to-earnings ratio of 11 times.

CHINA OVERSEAS's performance last year aligned with the bank's expectations. The company reported full-year core profit of RMB 12.8 billion, a decline of 18.5% year-on-year. The dividend per share was HK$0.50, down 16% compared to the previous year. As last year's gross margin performance was at the lower end of expectations, the bank has lowered its profit forecasts for 2026 to 2028 by 4% to 7%. It is anticipated that profits will see a slight decrease in 2026, followed by a recovery in 2027, driven by a rebound in the gross margin.

The report indicated that management retains confidence in the Hong Kong market and expects contract sales to show further growth this year compared to last year. According to the bank's estimates, the gross margin for CHINA OVERSEAS's Hong Kong projects was in the high single-digit to low double-digit percentage range last year. It is projected that the sales gross margin will improve by approximately 5 percentage points by 2026.