On April 27, the international rating agency Fitch released its latest rating report on Longfor Group (00960), affirming the company's existing 'BB-' rating and revising its outlook to 'Stable'. Fitch stated that the outlook revision reflects its view that Longfor will maintain a sufficient liquidity buffer to withstand the impact of a further downturn in China's property sector. This is supported by the company's reduced debt repayment pressure and its ability to generate positive operating cash flow even during the industry's downturn. As of the end of 2025, Longfor Group's interest-bearing debt stood at 152.81 billion yuan, a reduction of 23.51 billion yuan from the end of 2024, representing a decrease of 13%. Currently, Longfor's operating cash flow, including capital expenditures, has been positive for three consecutive years, with a net inflow of 5.8 billion yuan in 2025. Fitch believes that Longfor's ample liquidity and prudent cash flow management will help mitigate the ongoing challenges in China's real estate market.

Entering 2026, Longfor's debt maturity pressure has significantly eased. Fitch expects the company's annual maturities of credit debt over the next three years to decrease to between 5 billion and 7 billion yuan, compared to approximately 20 billion yuan in the previous three-year period. Fitch considers that, as of the end of 2025, Longfor Group's available cash and its track record of consistently achieving positive operating cash flow provide the company with an adequate liquidity buffer, sufficient to cover near-term debt maturities.

It is noteworthy that following Moody's, Fitch has also adjusted its rating methodology for Longfor Group, shifting from its previous China Developer Criteria to the Asia Pacific Real Estate REITs Criteria. Fitch believes the new methodology better reflects Longfor Group's evolving business model. In 2025, Longfor Group's revenue from its operations and services business and its proportion of total revenue increased further. For the full year, revenue from operations and services reached 26.77 billion yuan, accounting for 27.5% of total operating revenue. Core profit from the operations and services business was 7.92 billion yuan, continuing to contribute stable earnings. Fitch indicated that over the past few years, Longfor's development business has contracted, while its operations and services business has continued to grow. Consequently, in 2025, the operations and services business accounted for the majority of the group's total assets and EBITDA, becoming a key driver of its credit profile. Fitch expects that, driven by the continuous expansion of its shopping malls, the recurring revenue generated by Longfor Group's operations and services business will grow steadily.