CHINA JINMAO still has tough battles to fight

Author | Huang Yu

During the deep adjustment period of the real estate industry, reshuffling among real estate companies is happening at any time, with some being kicked out of the table and others welcoming their shining moments.

On August 26, as a central enterprise, CHINA JINMAO (00817.HK) released its mid-term performance report for 2025. The financial report shows that in the first half of the year, CHINA JINMAO's revenue was approximately 25.112 billion yuan, an increase of 14% year-on-year; net profit attributable to the parent company was approximately 1.09 billion yuan, an increase of 8% year-on-year; and the overall gross profit margin was about 16%, basically flat compared to the same period in 2024.

While performance rebounded, data from the China Index Academy shows that in the first half of this year, CHINA JINMAO achieved a contracted sales amount that increased by 20% year-on-year to approximately 53.4 billion yuan, ranking ninth in sales scale and entering the top ten in the industry for the first time.

This achievement of CHINA JINMAO is particularly prominent against the backdrop of an overall market downturn.

It is worth noting that in the first half of 2025, the total sales amount of the TOP 100 real estate companies was 1,836.41 billion yuan, a year-on-year decrease of 11.8%.

Tao Tianhai, Chairman of the Board of CHINA JINMAO, pointed out that the industry has a long way to go to stabilize after the decline. Facing a difficult external situation, CHINA JINMAO remains steadfast in its strategy of "optimizing increments and revitalizing stock," focusing on promoting the "Six Forces and Three Comparisons" thematic work, systematically enhancing overall chain competitiveness, and leading the industry in showing signs of stabilization in sales performance.

In terms of investment and land acquisition, CHINA JINMAO was also a major player in land acquisition in the first half of this year, acquiring 16 new projects, all located in core first and second-tier cities, including a "behemoth" plot in Chaoyang District, Beijing.

According to data from the China Index Academy, in the first half of this year, CHINA JINMAO ranked seventh in the land acquisition amount list with an acquisition amount of 26.1 billion yuan.

As of the end of the first half of this year, CHINA JINMAO held property development projects with a sales area of approximately 26.81 million square meters.

In the context of less optimistic real estate development and sales, promoting the development of commercial operations and other operational businesses has become an industry consensus.

In the first half of this year, although CHINA JINMAO's property development revenue grew against the trend by 17% to 20.04 billion yuan, other diversified businesses did not perform particularly well.

The financial report shows that in the first half of this year, CHINA JINMAO's income from commercial leasing and retail operations decreased by 5% year-on-year, with the percentage of total revenue dropping from 4% in the same period last year to 3%, mainly due to the fact that in the same period last year, Changsha Lanxiu City became the underlying asset of the Huaxia JINMAO Commercial REIT, and in the second half of 2024, the first phase of Ningbo Jiayuan Plaza was sold, and its income was no longer included in CHINA JINMAO's financial statements.

In addition, the hotel operating income under CHINA JINMAO decreased by 12% year-on-year, mainly due to the disposal of the Hilton Hotel in Sanya in the second half of 2024; relatively well-performing was the property listed company JINMAO Property Services, which contributed a year-on-year increase of 20% in revenue, but the total revenue proportion remained the same as last year, still at 7%.

In the current market environment, although CHINA JINMAO has gained market trust and sales have increased year-on-year, its "self-sustaining ability" has not yet recovered, with a net cash flow from operating activities still recording a negative value in the first half of this year, although the outflow amount decreased from 3.019 billion yuan in the same period last year to 1.488 billion yuan Tao Tianhai stated in the financial report that in the short term, the industry will still be in the process of bottoming out. The company's operations should focus on "three accelerations and one emphasis": with the core of rapidly returning to positive operating cash flow, accelerating the de-stocking of incremental projects; aiming to achieve the advancement tasks, accelerating the revitalization of existing projects; focusing on promoting awareness transformation and performance transformation, accelerating the creation of the second curve; emphasizing risk hazard control to assist the company's performance realization and high-quality development.

In the medium to long term, Tao Tianhai believes that as policies continue to be implemented effectively and residents' confidence in home buying is restored, the industry will gradually return to a stable development track. China Jinmao will explore layouts to accelerate the construction of a "new model" for development, while maintaining its positioning as an urban operator, effectively grasping both the existing and incremental markets, and continuously deepening the strategic connotation of its business.

Against the backdrop of deep adjustments in the industry, both private enterprises and state-owned enterprises face enormous survival challenges and must actively optimize their business structures and strengthen risk management to achieve sustainable development in a complex market environment