According to China Index Academy, in the first half of 2025, listed real estate companies experienced significant revenue decline and continued losses, with debt ratios continuing to rise and debt servicing capabilities further deteriorating. Among leading real estate companies, CHINA RES LAND (01109) and LONGFOR GROUP (00960) demonstrated strong counter-cyclical resilience, with their revenue structures showing diversified characteristics, while light-asset and operational service businesses contributed higher profits. The main operational strategies for leading real estate companies in the second half include: accelerating inventory clearance and optimizing incremental quality; accelerating product iteration to build quality homes; and creating a second growth curve.

First Half Performance: Significant Revenue Decline, Continued Losses, Rising Debt Ratios, and Deteriorating Debt Servicing Capability

Data Source: China Index Data CREIS

In the first half of 2025, Chinese listed real estate companies' performance continued its sluggish trend. Data shows that the average operating revenue of listed real estate companies was 10.42 billion yuan, down 16.9% year-over-year, with the decline widening by 3.2 percentage points compared to the same period in 2024. Revenue-side contraction pressure continues to escalate, reflecting the current situation of weak market demand and continued pressure on the sales front.

Profitability performance is even more concerning, with the industry's average net profit falling to -830 million yuan, showing a gradually expanding loss scale. Approximately 60% of listed real estate companies experienced varying degrees of losses, with some highly leveraged real estate companies facing debt restructuring pressure. Behind this data lies not only the industry's multiple challenges during the deep adjustment period, including destocking and finding new growth points, but also indicates that corporate transformation and risk resolution still require considerable time.

Data Source: China Index Data CREIS

In the first half of 2025, Chinese listed real estate companies' financial risks continued to escalate, with debt servicing capabilities further weakening. Data shows that the asset-liability ratio of listed real estate companies (excluding advance receipts) reached 66.5%, up 0.9 percentage points year-over-year; the net debt ratio surged significantly to 171.8%, jumping 55.8 percentage points year-over-year, reflecting the industry's overall high leverage levels.

This phenomenon primarily stems from the continued contraction of monetary funds, combined with intensified depreciation pressure on inventory and investment property assets due to market downturn. More concerning is the short-term debt servicing capability indicator, with the cash-to-short-term debt ratio falling to 0.88, down 0.03 from the same period last year, meaning that over half of real estate companies' cash on hand can no longer cover debts due within one year, intensifying liquidity pressure. Currently, real estate companies generally face narrowed financing channels and high financing costs, forcing some companies to maintain cash flow balance through asset disposal and debt extensions.

The first half 2025 financial reports show that among typical real estate company representatives, CHINA RES LAND and LONGFOR GROUP demonstrated strong counter-cyclical resilience, with their revenue structures showing diversified characteristics. From a revenue structure perspective, both China Resources and Longfor's property holding income and operational service income account for over 20% of total revenue.

Data Source: China Index Data CREIS

From a profit contribution perspective, non-development businesses of China Resources and Longfor contributed over 60% of profits. In the first half of 2025, CHINA RES LAND's development and sales business contributed 39.8% of net profit, while non-development sales businesses contributed over 60% of net profit. LONGFOR GROUP's development and sales business contributed only 1.3% of profit, while non-development sales businesses contributed over 90% of profit.

Leading Real Estate Companies' Second Half Strategies: Accelerate Inventory Clearance and Optimize Incremental Quality; Accelerate Product Iteration to Build Quality Homes; Create Second Growth Curve

China Index Academy summarized the second half operational strategies of leading real estate companies, which mainly feature the following characteristics in investment strategy, product and business development:

1. Investment Strategy In the second half of 2025, leading real estate companies are accelerating inventory clearance through project-specific strategies, fully focusing on clearance and fund recovery, balancing profit and cash flow of existing projects. In terms of investment, companies maintain precise investment to ensure safety, liquidity, and profitability of incremental projects, improving resource quality. Meanwhile, leading real estate companies focus on core cities and core locations. For example, Yuexiu Property centers around the theme of "stabilizing performance, seeking breakthroughs, refining management, and enhancing capabilities," focusing on accelerating sales and inventory reduction, improving commercial operational capabilities, deepening organizational reform and strengthening lean management, fully concentrating on sales targets and various operational objectives, adhering to precise investment strategies, striving to increase quality land parcels, and continuously improving resource quality. At the same time, optimizing resource allocation, focusing investment on core areas of first-tier cities and key second-tier provincial capital cities, and continuously strengthening cooperation with excellent enterprises to comprehensively enhance investment capabilities and effectively respond to market competition.

2. Product Strategy Responding to the "quality homes" policy by improving product iteration. For example, CHINA RES LAND strengthens and deepens product iteration; LONGFOR GROUP emphasizes customer demand-oriented product enhancement - delivering quality homes and providing quality services; Binjiang Group follows quality principles, namely quality cities, quality locations, quality projects, quality products, and selecting quality partners, ensuring investment projects achieve high quality and high returns.

3. Business Strategy Accelerating the construction of new development models and creating a second growth curve. For example, CHINA RES LAND proposes to specialize, optimize, strengthen, and expand operational real estate business and asset management business, promoting high-quality development of the second growth curve. Further expanding Mixc Life's leading market position in light-asset management business, strengthening its role as a strong growth driver for performance contribution. At the same time, actively cultivating ecosystem element-based businesses, forming new growth momentum with the positioning of transformation development accelerator, thereby constructing a development pattern where various business segments advance synergistically. LONGFOR GROUP advances simultaneously in development, operations, and services sectors, with future growth mainly in four operational tracks from C2 to C5: commercial, asset management, property management, and construction management, building competitive advantages in their respective sectors, maintaining continuous growth, forming capability moats, and continuously cultivating the second growth curve.