Goldman Sachs has revised its target price for Greentown China (03900) downward from HK$12 to HK$10.8 while maintaining a "Buy" rating. The company reported a 96% year-on-year decline in net profit for the 2025 fiscal year, falling to RMB 71 million, primarily due to significant impairment losses of RMB 4.9 billion, including RMB 2.9 billion in inventory write-downs and RMB 2 billion in receivables impairments.

Management at Greentown China has set a contracted sales target of RMB 130 billion for 2026, representing a 15% decrease compared to the previous year. The firm plans to continue optimizing its investment portfolio and intensify efforts to reduce inventory through stricter key performance indicator mechanisms and innovative marketing strategies. The dividend policy is expected to remain largely unchanged, with payouts ranging from 20% to 50% of net profit after adjusting for foreign exchange impacts.

In light of management's guidance on land reserves and inventory reduction activities, as well as sales performance in the first quarter of this year, Goldman Sachs has lowered its 2026 contracted sales forecast for Greentown to RMB 133 billion, a 13% year-on-year decline. Sales for the following two years are projected to remain relatively stable. Additionally, the investment bank has reduced its net profit forecasts for 2026–2028 by an average of 34%, while raising core profit estimates by an average of 3% to RMB 4.6 billion. The expected dividend payout ratio has been adjusted downward from 50% to 30%.