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China Overseas Land & Investment Ltd 00688

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Pilot Property Tax Untimely, Though Sector Already Under Heavy Policy Headwinds

Cheng Wee Tan Senior Equity Analyst

Analyst Note

| Cheng Wee Tan |

Over the weekend, China adopted a decision to carry out an expansion of the property tax pilot scheme. However, while the property tax in pilot regions would be implemented for all types of properties, rural properties are to be excluded and there is a still a lack of details on the proposed new tax and pilot schemes, and in which cities or regions. We have noted that the pilot scheme is not entirely new. In previous property tax pilot schemes that were implemented in Shanghai and Chongqing, the tax rates were relatively low and had small coverage with limited impact to the property market. This time round, we expect there should be deviations to earlier pilot schemes and they are likely to be implemented in markets like Shenzhen and Hainan.

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Company Profile

Business Description

China Overseas Land & Investment, or COLI, is a large real estate developer in China. Property development accounts for most of its core earnings, with operating scale at about three times the size of midsize peers by contracted sales. In addition to property development, COLI targets growth in its commercial property portfolio with a dual focus on offices and shopping malls for recurring income. The company is a subsidiary of China State Construction Engineering, China's largest construction company. COLI holds a 38% stake in China Overseas Grand Oceans, a real estate developer focusing on lower-tier Chinese cities.

Contact
1 Queen's Road East, 10th Floor, Three Pacific Place
Hong Kong, Hong Kong
T +852 29880666
Sector Real Estate
Industry Real Estate - Development
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 5,916