A report released on May 14 indicates that as annual reports of listed real estate companies are being disclosed, an analysis of 2025 performance from 20 representative developers, including Poly Developments and Holdings, China Resources Land, and Vanke, reveals that while sales pressure persists, high-quality housing products have effectively helped companies outperform the broader market downturn. These leading developers have generally maintained an active stance on land acquisition, concentrating their efforts on replenishing land banks in core or established strategic regions. Affected by declining sales, both revenue and net profit have decreased across the board, leading to increased financial pressure, which necessitates vigilance against further risk transmission. Concurrently, these firms are adhering to a "dual-track" development strategy, strengthening their operational business segments and project management services to cultivate multiple growth drivers.
Sales: Widespread Decline in Sales; High-Quality Housing Products Mitigate Market Pressure In 2025, the real estate sector continued its deep adjustment phase, characterized by shrinking transaction volumes and price adjustments. Data from the National Bureau of Statistics shows that annual sales area for newly built commercial housing was 880 million square meters, down 8.7% year-on-year, with sales value reaching 8.4 trillion yuan, a decrease of 12.6%, indicating that demand recovery still requires time. For the 20 representative listed companies, the average sales value in 2025 was 105.51 billion yuan, a year-on-year decline of 18.8%. Although this drop is steeper than the national average, it represents a narrowing of 5 percentage points compared to the 2024 decline. Specifically, China Jinmao (00817) and Beijing Urban Construction achieved year-on-year sales growth. Companies such as Greentown China (03900), C&D Real Estate, Poly Property (00119), Yuexiu Property (00123), and China Resources Land (01109) also experienced sales declines, but at a rate lower than the national average, thus outperforming the market trend.
In 2025, developers countered market pressures by iterating product lines and creating "high-quality housing" projects, leading to strong sales performance. Among the top 20 best-selling projects in key cities by sales value in 2025, 11 were developed by the representative companies. For instance, China Resources Land actively responded to national policies on quality housing, launching and implementing its own standard system for the first time. By deepening project tiered management and focusing flagship projects with integrated top-tier resources, the company enhanced differentiated advantages, tackled fundamental technologies, and innovated customized services, elevating the living experience from basic shelter to comfortable living. Benchmark projects like Shenzhen Bay Yunxi, Shanghai Yunqi Riverside, and Beijing Runyuan not only gained widespread market recognition but also set new residential standards, further solidifying China Resources Land's product strength. China Jinmao fully implemented its four new residential product lines launched in 2024—Jinmao Fu, Jinmao Pu, Jinmao Man, and Jinmao Tang—in 2025. Leveraging cutting-edge technology, health, aesthetics, and service systems, it created several "phenomenal hit projects," such as Xi'an Puyi Orient, Shanghai Runyun Jinmao Fu, and Xiong'an Jinmao Fu, which became sales champions in their respective cities.
Land Acquisition: Sustained Active Acquisition Focused on Strategic Regions Throughout 2025, developers maintained an active approach to land acquisition, with the top 100 developers by acquisition value seeing a 3.9% year-on-year increase. This trend is attributed to favorable policies introduced by various local governments to stabilize the land market, coupled with improved land quality, which boosted developer enthusiasm. Furthermore, after years of relatively weak land acquisition activity, existing land banks have been largely depleted, prompting companies to seize favorable opportunities to replenish stocks for sustainable development. The 20 representative listed companies actively seized these opportunities, with their average land acquisition expenditure reaching 26.15 billion yuan, a significant increase of 26.8% year-on-year.
In terms of geographical focus, these companies continued to concentrate their land acquisitions in core, high-demand first- and second-tier cities. In 2025, based on land transfer fees, Hangzhou, Shanghai, and Beijing each recorded annual land transfer revenues exceeding 140 billion yuan, leading the nation. As the real estate sector enters an adjustment period, core first- and second-tier cities, with their significant population inflows, strong industrial foundations, and more resilient demand, remain more attractive to developers. For example, China Overseas Land & Investment allocated 73.9% of its 2025 land acquisition budget to five cities: Hong Kong, Beijing, Shanghai, Guangzhou, and Shenzhen, with some projects achieving sales launch within the same year. Similarly, China Resources Land directed nearly 80% of its land acquisition spending to five major core cities, including Beijing and Shanghai.
Actively seizing favorable opportunities to secure prime plots has been a priority. In recent years, to stabilize the land market, land supply has exhibited a trend of "reduced volume with improved quality," frequently resulting in plots fetching high premiums. The representative companies have actively laid the groundwork for future development by acquiring such premium land. Several firms, including China Merchants Shekou Industrial Zone Holdings, China Resources Land, and Binjiang Group, have successfully secured high-premium, quality plots.
Land acquisition methods have diversified, including consortium bidding and mergers and acquisitions. In 2025, for core first- and second-tier cities, the 20 representative companies commonly utilized methods beyond public auctions, such as forming consortiums or engaging in M&A activities. On one hand, consortium bidding helps manage market uncertainties by sharing risks like slow sales or price fluctuations among multiple parties. On the other hand, as land prices in core cities are high, consortiums allow for cost-sharing, enabling access to prime plots with lower individual capital outlays. For instance, on August 1, 2025, China Resources Land announced that its subsidiary Shanghai Hongzhe, in a consortium with independent third-party Shanghai Nanfang, acquired 100% equity and creditor's rights of four target companies for a total consideration of approximately 24.47 billion yuan. This acquisition involved the Yaohua Road and Yuqingli projects, both located in Shanghai's core areas—the former in the Pudong Expo Park zone and the latter near People's Square in Huangpu District.
Profitability: Further Revenue Decline and First Net Loss in Five Years Impacted by reduced sales and consequently lower revenue recognition from completed projects, revenue continued to decline. In 2025, the average operating revenue for the 20 representative listed companies was 110.5 billion yuan, down 9.4% year-on-year, marking the second consecutive year of decrease. In recent years, shrinking land acquisition scale and the market downturn have led to a yearly decline in sales growth, significantly reducing the pipeline of sales available for revenue recognition, thereby pressuring current revenue. Companies with stronger operational businesses, such as property holding and service segments, saw improvements in these areas, which contributed to boosting overall revenue. For example, in 2025, China Resources Land generated recurring income of approximately 43.3 billion yuan, up 3.7% year-on-year. Within this, rental income from operational commercial properties became a core contributor to the company's profit and stable cash flow, generating revenue of 25.44 billion yuan, a 9.2% increase. Seazen Holdings achieved commercial operation revenue of about 14.09 billion yuan, a 10.0% year-on-year rise. Longfor Group (00960) recorded operational income of roughly 26.77 billion yuan, remaining largely flat year-on-year; this comprised operational revenue of approximately 14.19 billion yuan (up 5%) and service income of about 12.58 billion yuan.
Profitability continued to deteriorate, with the representative companies reporting their first collective net loss in five years. Declining sales and reduced scale of revenue recognition led to widespread revenue drops. However, rigid development costs remained unchanged, and some companies experienced slight increases in their three expense ratios (selling, general & administrative, and financial), causing net profit to decline rapidly. In 2025, the average net profit for the 20 representative listed companies was -2.72 billion yuan, marking the first loss in nearly five years. Additionally, asset impairment losses significantly dragged down profitability. The decline in net profit is a result of accumulated adjustments from past market cycles, and inventory write-downs are an inevitable outcome. Developers need to make adequate provisions to move forward unburdened. The sharp downturn following years of rapid market expansion has left many real estate companies with heavy historical burdens, severely impacting current profitability. In 2025, some listed companies, adhering to the prudence principle amid the ongoing market adjustment, increased provisions for impairment on inventory, investment properties, and long-term equity investments, fully considering the adverse effects of adjustments in pricing strategies, market pressure, and impacts from new regulations on existing projects.
Debt Risk: Rising Net Gearing Ratio and Declining Cash-to-Short-Term Debt Ratio Highlight Need for Vigilance In 2025, the average asset-liability ratio excluding advances from customers for the 20 representative listed companies was 61.5%, showing a notable decrease. This reduction can be attributed to several factors. Firstly, some companies adopted a "de-leveraging" strategy, using internal funds or operating cash flow to prepay or redeem high-interest debt ahead of schedule. For instance, Longfor Group reduced its interest-bearing debt by over 20 billion yuan in 2025, with a cumulative reduction of approximately 60 billion yuan over the past three and a half years, directly lowering its leverage ratio. Secondly, under the industry's "sales-determine-production" model and destocking cycle, declining sales scale led to a reduction in new customer advances. While excluding advances from customers aims to reflect true liabilities, the decrease in such advances directly reduces the numerator (liabilities). If total assets do not contract proportionally, this metric declines.
The net gearing ratio increased, warranting vigilance against debt risk transmission to leading developers. In 2025, the downward trend in operating net cash flow persisted, while a significant net outflow in financing cash flow accelerated cash pressure. Coupled with severe inventory accumulation tying up substantial working capital, the cash conversion cycle tightened continuously, negatively impacting cash flow, leverage ratios, and short-term solvency. The average net gearing ratio for the 20 representative companies was 71.3%, nearly 10 percentage points higher than in 2024. Research indicates that under the influence of net capital outflows due to sluggish sales, long-term debt burdens have increased. Among non-distressed firms, nearly 70% saw their net gearing ratio rise compared to the previous year, with leading state-owned enterprises and some stable private developers also affected. With sales continuing to decline, listed developers cannot yet claim relief from debt repayment risks, and resolving these risks will take time.
The cash-to-short-term debt ratio declined, indicating concentrated pressure on rigid debt repayments for some firms. In 2025, the average cash-to-short-term debt ratio for the 20 representative listed companies was 1.64, down 0.4 from 2024. Among them, approximately one-quarter had a ratio below 1, indicating ongoing tight liquidity. Some companies face concentrated pressure for rigid debt repayments, and upcoming short-term debt maturity peaks will further constrain their cash flow flexibility, potentially trapping them in a vicious cycle of "debt maturity peaks - reduced development scale - worsening cash flow - restricted financing." Continuous vigilance against debt risk is essential.
Financing channels remained relatively accessible, with ongoing exploration of financing innovations. In 2025, financing channels for the representative listed companies were generally open, as they actively sought debt issuance while strictly maintaining safety bottom lines. For example, Seazen Holdings, leveraging trust from financial markets, successfully issued the first pure credit offshore bond by a private developer in nearly three years, with a total size of $300 million. Simultaneously, some companies are actively exploring innovative financing channels. China Resources Land, for instance, is focused on building a multi-tiered real estate investment trust (REITs) platform, including a Pre-REITs strategic commercial property private fund, two publicly offered REITs (China Resources Consumption REIT and China Resources Youchao REIT), and several quasi-REITs. At the end of 2025, the China Securities Regulatory Commission initiated the commercial real estate REITs market, entering a parallel development stage with "infrastructure + commercial real estate" REITs. Regulations for commercial real estate REITs are more relaxed regarding issuers, underlying assets, use of proceeds, and application pathways. The first batch of commercial real estate REITs applications have been submitted. Various forms of REITs are becoming a cornerstone for high-performing companies to revitalize existing assets, broaden equity financing channels, and facilitate business model transformation.
Development Direction: Dual-Track Strategy to Cultivate Multiple Growth Curves Adhering to the "dual-track" development strategy, companies are strengthening their operational businesses and project management services. In 2025, representative listed companies actively explored multi-sector development, leveraging their strengths to refine and strengthen operational real estate businesses and project management, creating multiple growth curves. For example, Poly Developments and Holdings, China Overseas Land & Investment, and China Resources Land have all reinforced their operational segments alongside core development, deepening their presence in commercial and long-term rental operations. In 2025, non-development business contributed over 50% of China Resources Land's profit. By the end of the 15th Five-Year Plan period, the company aims for rental revenue from operational properties to stabilize around 30 billion yuan, accounting for nearly 15% of total revenue. Concurrently, project management services, characterized as "asset-light, counter-cyclical, and high-profit," align well with the current transformation direction and are favored by developers. Approximately three-quarters of the 20 representative companies have engaged in project management, with some establishing clear competitive advantages.
Conclusion Since 2025, the real estate market has exhibited a mix of recovery and differentiation amid continuous policy support and structural adjustments. The 2026 Government Work Report emphasized "focusing on stabilizing the real estate market," implementing city-specific policies to control new supply, reduce inventory, optimize supply, explore multiple channels to revitalize existing commercial housing stock, and encourage the acquisition of such stock primarily for affordable housing. The Political Bureau meeting of the CPC Central Committee on April 28 called for efforts to stabilize the real estate market and solidly advance urban renewal. As policy dividends continue to be released, they are expected to foster market expectation repair and demand release. In this context, developers must prioritize operational safety, actively destock and revitalize existing assets, accurately grasp opportunities from upgrading demand for improved housing, accelerate product capability enhancement and quality construction, and speed up sales collection.
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