Yuexiu Property (00123) announced on the evening of July 17th that, impacted by the previous deep adjustment cycle in the industry, it estimates its interim profit attributable to equity holders for 2026 will decline year-on-year to a range of 0.5 billion to 1.0 billion yuan, with core net profit also falling to between 0.5 billion and 1.0 billion yuan, indicating a phase of profit margin compression.
A market analyst noted that shrinking profits for property developers are not an isolated case; the market downturn in recent years, leading to reduced profit recognition on projects and the concentrated release of impairment provisions, is a common industry phenomenon. Compared to the widespread losses seen among many developers, Yuexiu's ability to remain profitable demonstrates the solidity of its operational foundation and its stronger resilience to market cycles.
Robust Financial Foundation
Yuexiu Property has long maintained a stable financial structure. Announcement data shows that in 2025, the company achieved a net operating cash inflow of nearly 14 billion yuan, with cash on hand at period-end reaching 46.76 billion yuan. Its coverage ratio for short-term debt maturing within one year stood at 1.7 times, indicating a substantial financial safety cushion. The company also maintains its investment-grade ratings from S&P and Fitch.
This robust financial foundation provides solid support for the company to seize market opportunities and advance its sales and strategic layout in key cities.
Strong Sales Performance
Data from CRIC shows that Yuexiu Property achieved full-caliber contract sales of 50.5 billion yuan in the first half, steadily ranking eighth in the industry. Furthermore, a recent June performance announcement stated the company's contract sales for that month reached 13.492 billion yuan, a year-on-year increase of 24.9%, indicating sustained sales momentum.
Its home market of Guangzhou performed particularly strongly. According to CRIC data, Yuexiu Property achieved full-caliber sales exceeding 20 billion yuan in Guangzhou in the first half, a year-on-year increase of approximately 31.8%, with success across its luxury, upgrade, and entry-level product lines.
Projects like Guanyue accumulated sales of 1.938 billion yuan in the first half. The Yujingtai project, since its March launch, has seen robust sales exceeding 2.4 billion yuan, ranking among the top three in the city for new home transaction value in the first half. The Wanbo and Zhen projects consistently ranked in the top five for both transaction volume and area of new homes in the city during the period.
The aforementioned market analyst commented that the Guangzhou property market has seen a structural recovery this year, driven by policy support, with new home prices rising month-on-month for four consecutive months. Yuexiu Property has accurately capitalized on this market window, resulting in strong sales growth.
Expansion in Key Cities
Beyond its standout performance in Guangzhou, Yuexiu Property has also achieved solid sales in other key cities like Beijing and Hangzhou. In Hangzhou, its total transaction volume for the first half ranked among the city's top five. In Chengdu, the Tianyue Yun Cui Phase III project has received over 10,000 visits since its March launch, repeatedly topping monthly charts for transaction volume, area, and value of townhouses in the main city area. In Beijing, the Puyue project continues to lead the local luxury residential market.
While sales momentum remains steady, Yuexiu Property also secured several prime assets in core locations in Guangzhou, Shanghai, and Chengdu during the first half, further consolidating its strategic presence in key cities.
Analyst Support
Leveraging its strong sales performance, several brokerage firms continue to cover Yuexiu Property and maintain "Buy" ratings. CLSA has issued two research reports, expressing confidence in Yuexiu's sales resilience and including it among its preferred state-owned property developer picks. CLSA also anticipates that the potential injection of the Guangzhou Zhujiang New Town project could act as a catalyst for the company's share price, leading it to raise its target price to HK$5.50.
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