Recently, several property developers have issued profit warnings for 2025, serving as the most direct signal of the ongoing deep adjustment within the industry. Data from WIND shows that, as of January 20, more than 26 listed developers, including Greenland Holdings, Huafa Co., Ltd., Gemdale Corporation, China Fortune Land Development, and Beijing Capital Development, have forecasted losses for their 2025 annual performance. Among them, Greenland Holdings expects a net profit attributable to shareholders of between -16 billion and -19 billion yuan; Beijing Capital Development also explicitly stated that it remains in a loss-making position; notably, Huafa Co., Ltd. is projected to report an annual loss for the first time since its listing in 2004. The total scale of losses for developers that have disclosed data currently ranges between 47.546 billion and 62.464 billion yuan.
In the view of industry insiders, the warnings already disclosed may only be the beginning. It is reported that approximately 68.1% of listed property developers recorded losses in the 2024 fiscal year. As the annual report season approaches in March 2026, it is anticipated that more listed developers will issue forecasts for losses or declines in performance. YUEXIU PROPERTY (00123) also issued an announcement on January 23. The announcement stated that, affected by the continued market adjustments in the real estate sector, the core net profit for 2025 is expected to be in the range of 250 to 350 million yuan.
Behind the pressure on profits is a significant contraction in the revenue of property developers. Data from the National Bureau of Statistics shows that in 2025, the sales area of newly built commercial housing nationwide decreased by 8.7% year-on-year, while sales value fell by 12.6% year-on-year. Data from CRIC indicates that the total sales value of the top ten developers by full-scale sales amount in 2025 decreased by approximately 16.2% compared to 2024, with many leading developers experiencing double-digit year-on-year declines in sales value.
Experts believe that the real estate industry is still in a period of deep adjustment, and inventory asset impairment provisions are one of the primary factors affecting developers' current profits. However, the core rationale behind these impairments is to adhere to the principle of financial prudence, allowing for the early recognition of potential risks. When the market environment improves in the future and the value of related assets recovers, the current concentrated provisions will objectively create room for profit recovery once the industry rebounds.
This move by YUEXIU PROPERTY is consistent with recent actions by several other leading developers, reflecting a common strategy to strengthen risk control and solidify asset quality at the bottom of the current cycle. The capital market's reaction to these profit fluctuations has also become more rational. An analyst from a securities firm commented, "Investors' focus is shifting from a singular emphasis on the income statement towards the quality of a company's core assets and its financial safety margins. In the current market, companies with稳健 financial styles and land reserves highly concentrated in high-tier core cities like Beijing, Shanghai, and Guangzhou have stronger demand support for their assets and superior risk resistance. Once market conditions improve, these companies are also expected to demonstrate greater profit elasticity and a faster recovery pace."
Research reports released by several securities firms also corroborate this view. Institutions believe that developers capable of consistently meeting the "three red lines" green tier requirements and maintaining positive operating cash flow during the industry's adjustment period typically possess thicker financial safety cushions. This not only grants them a unique ability for counter-cyclical land acquisitions but also positions them to lead peers significantly in both the certainty and speed of performance recovery when the industry rebounds.
Looking ahead, preliminary signals of the market bottoming out and stabilizing are beginning to emerge. In December 2025, the month-on-month decline in sales prices for commercial residential buildings in 70 large and medium-sized cities showed a narrowing trend. Analysis by China International Capital Corporation (CICC) points out that as historical burdens continue to be digested, industry gross profit margins are expected to gradually recover starting in 2026, driven by improvements in the structure of property values. Over the next one to two years, the main theme for the industry will remain digestion and adjustment. Those developers with high-quality assets,稳健 finances, and those already showing signs of recovery ahead of the cycle are more likely to seize the dual opportunities of gross margin recovery and market bottoming, achieving a率先 revaluation of both their performance and valuation.
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