YUEXIU PROPERTY (00123.HK) has announced a significant transaction involving the sale of multiple assets to affiliated companies under its parent group, Yuexiu Group. The assets include the Nansha International Finance Center, Cloud Valley Industrial Park, S1 Building, and Zhi Valley Industrial Park in Guangzhou, a hotel in Bijie, and its incubated healthcare and elderly care business.
This related-party transaction is expected to generate net cash proceeds of approximately 4.46 billion yuan for YUEXIU PROPERTY. Chairman Lin Zhaoyuan stated that the divestment of non-core assets and businesses in non-core regions is a strategic move to optimize the company's asset structure and focus on its primary operations. The substantial cash inflow will enhance the company's ability to seize opportunities in the core residential development market.
Despite maintaining a sales scale exceeding 100 billion yuan in 2025, YUEXIU PROPERTY faced pressure on key indicators such as gross profit margin and net profit. During a March earnings presentation, Lin revealed that new projects in core cities are achieving gross profit margins above 15%. The company plans to stabilize operations through strategic investments to restore profitability. In 2025, 96.3% of the company's land acquisition budget was allocated to six core cities. The recent cash injection of over 4 billion yuan further strengthens its capacity to invest in these key markets.
According to public information, the Nansha International Finance Center is YUEXIU PROPERTY's second "IFC" project in Guangzhou. It is a mixed-use complex featuring landmark and standard Grade-A office towers and high-end apartments. The total gross floor area of the assets being sold is approximately 129,000 square meters, with a transaction value of about 1.93 billion yuan. The Cloud Valley Industrial Park, S1 Building, and Zhi Valley Industrial Park, also located in Nansha District, primarily consist of industrial park facilities and commercial properties. The hotel in Bijie, Guizhou Province, has been operational since 2023.
The healthcare and elderly care business targeted for sale, which holds direct or indirect stakes in 42 invested companies, is primarily engaged in the investment, operation, and management of medical, nursing, and elderly care services. One of the invested companies includes Wuxi Langgao Elderly Care Group, listed on the National Equities Exchange and Quotations.
YUEXIU PROPERTY noted in its announcement that while the divested assets and businesses have potential, they are still in the incubation phase. The sale aims to reduce the group's working capital requirements. For instance, the Nansha International Finance Center, Cloud Valley Industrial Park, and Zhi Valley Industrial Park are long-term, slow-turnover commercial properties. Two of the three project companies related to the Nansha International Finance Center recorded losses in 2025. The Bijie hotel and one healthcare target company have also reported losses for two consecutive years. Bijie is considered a non-core region, and the domestic elderly care industry is still emerging, requiring a long development cycle to mature.
Preliminary estimates indicate that the transaction will result in a net cash inflow of approximately 4.46 billion yuan and an after-tax gain of about 108 million yuan. Of the proceeds, 400 million yuan will be used to repay existing debt, with the remaining 4.06 billion yuan allocated for working capital.
An informed source revealed that the transaction is part of an internal resource integration within Yuexiu Group, planned since 2025. The buyers—Guangzhou Paper Group, Guangzhou Yuexiu Intelligent Manufacturing, Guangzhou Yuexiu Industrial Investment, and Guangzhou Yuexiu Health—are all wholly-owned subsidiaries of Yuexiu Group. During Yuexiu Group's annual economic work conference in January 2026, Chairman Chen Qiang outlined development goals for each business segment, emphasizing strengthening finance, optimizing property, expanding transportation, stabilizing food operations, and developing strategic emerging industries.
According to YUEXIU PROPERTY, integrating the healthcare business into Yuexiu Group's dedicated health industry platform will leverage the group's financial resources, synergies, and industrial advantages to accelerate business expansion and scaling. The sale of the Bijie hotel will also streamline the management of non-core regional assets, allowing the company to focus more on core market operations.
The divestment reflects YUEXIU PROPERTY's strategy to optimize its portfolio, while the cash proceeds will be directed toward deepening its core residential development business. Focusing on core regions is a strategic response to market challenges. In 2025, the company achieved contracted sales of 106.2 billion yuan, ranking ninth in the industry. Sales from six core cities—Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, and Chengdu—accounted for approximately 85.6% of the total, with first-tier cities contributing over 80 billion yuan, or about 78% of sales.
Despite stable sales performance, profitability metrics declined. The gross profit margin fell from 10.5% in 2024 to 7.8% in 2025, while net profit attributable to shareholders dropped from 1.04 billion yuan to 60 million yuan during the same period. Lin attributed the margin compression to the ongoing industry adjustment but expressed confidence in restoring margins through higher-margin projects, cost reductions, and improved product offerings.
YUEXIU PROPERTY believes structural differentiation in the property market will persist, with opportunities concentrated in prime locations within core cities. Developing high-quality homes in these areas is expected to yield better market acceptance, higher margins, and faster sales. In 2025, 96.3% of the company's 24.4 billion yuan in land investments were directed toward the six core cities.
For 2026, YUEXIU PROPERTY has allocated 30 billion yuan for equity investment. It remains unclear whether the 4.06 billion yuan from the asset sale is included in this budget. The company continues to advance its strategy of investing in core city hotspots, having recently acquired projects in Shanghai and Chengdu this year. Additionally, Yuexiu Group secured the Guangzhou Racecourse site for 23.6 billion yuan. Based on past practices, this project is expected to be injected into YUEXIU PROPERTY before launch, potentially serving as a stabilizer for the company's profit margins.