中国海外发展(00688) 　　Resignation of chairman is a surprising move. COLI announced the resignation of Mr. Hao Jian Min as executive director, chairman and CEO of the company. Mr. Xiao Xiao, with c35 years of management experience in construction and property business, has been elected to be the new chairman and CEO. In our view, this is a surprising move as Mr. Hao, aged 51, has only served as the chairman for about three years since 2013, while the prior chairman’s (Mr. Kong Qingping) tenure was about 8 years. We also note that Mr. Hao has demonstrated a strong execution track record over the past few years, underlined by the successful acquisition of the CITIC property portfolio earlier this year. 　　New chairman is well suited for the role with extensive experience, but hasalready approached retirement age. We believe Mr Xiao’s extensive industryknowledge and experience is well suited to assume the chairman role given that his involvement with CECEC dates back to 1982 and he is a familiar face within the investment community. However, we would highlight that Mr. Xiao has already approached the retirement age of 60. In China, employees of state-owned enterprises are required to retire at a certain age based on a policy document issued by the central government in 1953. Generally speaking, the retirement age for men and women is 60 and 55, respectively. For reference, Mr. Kong had stepped down as chairman in 2013 at the age of 58 which at the time was within the market’s expectation. Against this backdrop, we believe the next key question is who will succeed Mr. Xiao. 　　Reiterate Buy with unchanged TP of HKD32.60. While the resignation of Mr. Haoappears to be a surprise, we expect COLI’s operational strength to remain intact under the management of Mr. Xiao. We expect to hear more about COLI’ssuccession plan in the upcoming results season in March-17. Our TP of HKD32.60 is set at par (+1SD to historical mean) to our NAV estimate of HKD32.60. Key downside risks include inability to keep up with the strong sales momentum in 2017, lowerthan-expected ASP and margins, particularly for the newly acquired CITIC projects given the lack of a track record in some new geographic regions, and uncertainties related to macroeconomic and property-specific policies in China.