The Zhitong Finance App learned that J.P. Morgan Chase released a research report stating that it raised the target price of Seashell-W (02423) H shares from HK$59 to HK$65 and the target price of US stocks (BEKE.US) from $23 to $25, maintaining an “overholding” rating, and listed Shell as one of the preferred stocks in the Chinese entertainment and vertical internet stock sector. The bank is more optimistic about the growth prospects of the company's housing stock, leasing and decoration business. It raised its net profit forecast for 2027 by 7%, and is expected to increase net profit by 77% year-on-year in 2026.
The bank pointed out that Shell's net profit growth in 2026 is expected to be supported by the expansion of leasing services and optimization of intermediary networks and store costs. The company's stock price has risen 13% since this year, outperforming the China Overseas Internet ETF (KWEB), which had a cumulative decline of 31% during the same period. Second-hand housing sales remained resilient, with an 11% year-on-year increase in the first nine months, and the cumulative sales volume for October up to October 18 increased 26% year over year.
J.P. Morgan predicts that Shell's operating profit will grow at a compound annual rate of about 25% from 2026 to 2028, mainly due to improvements in the second-hand housing market, rental services and home improvement business development. Among them, about 40% of the company's profit comes from second-hand housing transactions, and the recent property market policy is beneficial to related businesses; the profit of leasing services is expected to be about 1 billion yuan in 2026, and the business volume is expected to increase by more than 30%; and the home improvement business is expected to reach balance of income and expenditure in the third quarter.
The bank believes that artificial intelligence will help Shell provide better housing services to developers and buyers, expand market share, and improve the work efficiency of top agents. Relevant positive factors are expected to offset the possible decline in new home transactions.