Real estate companies in the past six months: "lying flat" has led to a good life

With the end of the "mid-term report season," over 300 A-share and Hong Kong-listed real estate companies have submitted their performance reports.

According to statistics, among the 95 A-share listed real estate companies, 45% reported a year-on-year increase in net profit, while among the 239 Hong Kong-listed real estate companies, 43.5% reported a year-on-year increase in net profit.

Under the deep adjustment of the industry, those once top-ranking real estate companies, such as Sunshine City, R&F Properties, Kaisa Group, Longguang, and Rongsheng Development, have almost disappeared from people's sight; while some former leading real estate companies are still struggling to hold on.

How are these real estate companies faring today?

According to the sales ranking of real estate companies released by CRIC for January to August 2025, among privately-owned real estate companies, only Vanke remains in the top ten. In the first eight months, Vanke achieved sales of 91.11 billion yuan. Following closely are Longfor and Sunac, with sales of 45.63 billion yuan and 30.48 billion yuan, ranking 12th and 16th respectively.

"Those real estate companies that collapsed early are actually doing quite well now," said an insider from a leading real estate company in South China.

This view has also been corroborated by many.

"Those who have 'laid flat' are living well"

"The earliest batch of 'laid flat' real estate companies, many of their management salaries have not decreased, and working there is quite comfortable," said a real estate person from North China. "On the contrary, those still struggling are under immense pressure."

Kaisa Group, headquartered in Hong Kong, once ranked in the TOP30 of mainland real estate companies by sales. Due to early investments in Hong Kong's Sing Tao Daily, many employees are now "relocated" to that media outlet for editorial work.

According to a report by Leju Finance on June 27, Li Dapeng, who previously served as vice president of Kaisa Group, made his first public appearance as the president of the overseas division of Sing Tao News Group and chairman of Sing Tao Global Network.

"Media transforming into public relations is quite common, but it's the first time I've heard of public relations collectively transforming into media," sighed a person from the brand public relations department of a real estate company.

According to multiple sources, not only Kaisa but also several "collapsed" real estate companies, including R&F Properties and Sunshine City, have not seen any impact on employee salaries, and the personnel at the company headquarters remain stable.

"In real estate companies, employee salary expenses are not large; compared to huge debts, it's merely 'a drop in the bucket.' Even if they collapse, it's still not a problem for the boss to support the existing employees," said the aforementioned South China real estate insider.

"For example, a struggling real estate company needs to pay 100 yuan for a publicly traded bond with a face value of 100 yuan, plus the corresponding interest; while for a collapsed real estate company, according to the debt restructuring agreement, they may only need to pay 30 or 40 yuan, or even less," he explained. "Those that have held on until today without collapsing have paid a massive amount of funds for debt repayment compared to the earliest batch that collapsed."

However, these collapsed real estate companies present a different picture in the capital market.

Kaisa is known in the industry as the "King of Old Renovation." At its peak, it had 44 old renovation projects in Shenzhen, with a value of approximately 450 billion In 2022, Kaisa Group announced a "blowout." After the "blowout," Kaisa also attempted self-rescue. In April last year, Kaisa's founder Guo Yingcheng quietly returned to the mainland to promote the restructuring of overseas debts. This year, Kaisa's restructuring of over $15 billion in overseas debt has made key progress and has been approved successively.

In 2024, Kaisa's contracted sales were 6.757 billion, a year-on-year decrease of 62%, which is only 5% of the 143.5 billion sales in 2020; the net profit attributable to the parent company recorded a loss of 28.53 billion, setting a historical record.

In the first half of this year, Kaisa's net loss attributable to the parent company was 10.03 billion yuan. Over the past four years, Kaisa has accumulated losses of over 73 billion.

Another "blowout" real estate company, Fantasia Holdings, according to financial report data, now has a net asset of -11 billion, with cumulative losses exceeding 30 billion over four years.

Fantasia was founded in 1996 and is headquartered in Shenzhen. In 2009, Fantasia Holdings was listed on the Hong Kong Stock Exchange. Fantasia officially announced a "blowout" in 2021 and has also recorded losses for four consecutive years.

Currently, real estate companies with net assets below -10 billion include China Aoyuan, Tahoe, and Jinke. These companies were once among the TOP30 real estate companies and successively "blew out" between 2021 and 2022.

These "blowout" real estate companies have almost become "zombie stocks" in the capital market, losing their financing capabilities. As of the close on September 11, the stock prices of Kaisa, Fantasia, and China Aoyuan were 0.158 HKD, 0.072 HKD, and 0.123 HKD, respectively.

"Choosing 'blowout' real estate companies only loses credibility and refinancing ability in the capital market, but retains a lot of 'real money'." said a senior real estate industry insider.

He noted that many real estate companies from Guangdong and Fujian provinces, besides their listed companies, also own other companies and industries. They have just disappeared from the public eye, but that does not mean their "lives are bleak."

Some Real Estate Companies Are Still Struggling

Currently, some of the previously leading real estate companies that have not yet "blown out" include Vanke, Longfor, New World Development, and Binjiang. How have they fared in the past six months?

According to the data disclosed in the mid-year report, Vanke achieved an operating income of 105.32 billion yuan in the first half of the year, a year-on-year decrease of 26.2%; the net loss attributable to shareholders of the listed company was 11.95 billion yuan, an increase from the net loss of 9.8 billion yuan in the same period last year.

Regarding the performance loss, Vanke explained in the announcement that the main reasons include a significant decrease in the settlement scale of real estate development projects, a low gross profit margin, changes in the industry, market, and operating environment, new asset impairment provisions, and some bulk asset transactions and equity transaction prices being lower than book value.

"Considering the current state of the industry, Vanke's losses during the period are basically within expectations," said an analyst who participated in the performance meeting.

The repayment of public market debts and financing has always been a key topic surrounding Vanke. As of the end of August, Vanke had completed 24.39 billion yuan in public debt repayment, stating that there are no overseas public debts maturing before 2027 In terms of debt structure, as of the end of the first half of the year, Vanke had interest-bearing liabilities totaling 364.26 billion yuan, accounting for 30.5% of total assets, of which interest-bearing liabilities due within one year amounted to 155.37 billion yuan, accounting for 42.7%.

In the first half of this year, within the scope of Vanke's consolidated financial statements, new financing and refinancing excluding shareholder loans totaled 24.9 billion yuan. Regarding shareholder loans, the largest shareholder, Shenzhen Metro Group, has cumulatively provided 23.88 billion yuan in loans, with a comprehensive cost of new shareholder loans at 2.34%.

In terms of loans from financial institutions, Vanke stated that in July 2025, it added bank loans of 560 million yuan and timely repaid maturing debts of 7.444 billion yuan. As of the end of June, Vanke held cash and cash equivalents of 74.002 billion yuan.

Another real estate company in the public bond market that has not faced a crisis is New Town Holdings. According to its semi-annual report, in the first half of the year, New Town Holdings achieved operating revenue of 22.1 billion yuan, with a net profit attributable to shareholders of the listed company of 895 million yuan, and a net profit excluding non-recurring items of 947 million yuan, with a gross profit margin of 26.85%.

New Town Holdings passively reduced its debt due to the involvement of its former chairman in a public opinion storm in 2019, thus avoiding a "crisis."

According to the semi-annual report, as of the end of June 2025, New Town Holdings had a financing balance of 52.276 billion yuan, a decrease of 1.374 billion yuan from the beginning of the year. The interest-bearing liabilities of joint ventures and associates decreased to 2.582 billion yuan, down 691 million yuan compared to the beginning of the year.

As of the end of June, New Town Holdings had a cash balance of 9.183 billion yuan, with a net debt ratio of 53.4%, which is at a relatively low level, and the net operating cash flow was 286 million yuan.

In addition, in the first half of 2025, New Town Holdings achieved total commercial operating revenue of 6.944 billion yuan, a year-on-year increase of 11.8%. The gross profit from property leasing and management business totaled 4.573 billion yuan, accounting for 77.06% of the company's total gross profit, with a year-on-year increase of nearly 20 percentage points.

Similarly, Longfor, which relies on diversified layouts to navigate industry downturns, reported operating revenue of 58.75 billion yuan in the first half of this year, a year-on-year increase of 25.4%. The net profit attributable to the parent company was 3.22 billion yuan. In the first half of the year, Longfor's operational business, consisting of asset management and commercial investment, achieved operating revenue of 7.01 billion yuan.

Central State-Owned Enterprises Also "Tightened Their Belts"

From the published data, it is becoming increasingly difficult for real estate companies to achieve profitability in development projects in 2025.

Taking Poly Developments, a leading real estate company among central enterprises, as an example, according to the data released by Poly Developments, in the first half of 2025, Poly Developments ranked first in the industry sales ranking with a sales amount of 145.2 billion yuan. However, at the same time, Poly's net profit has significantly declined.

In the first half of the year, Poly Developments achieved total operating revenue of 116.857 billion yuan, a year-on-year decrease of 16.08%; the net profit attributable to the parent company was 2.711 billion yuan, a year-on-year decrease of 63.47%; and the net profit excluding non-recurring items was 2.579 billion yuan, a year-on-year decrease of 64.32% In response, Pan Zhihua, director and general manager of Poly Developments, stated at the performance briefing: "Due to the decrease in the scale of real estate project transfers, the company's total operating revenue has declined year-on-year; affected by industry and market fluctuations, the profitability of transferred projects has decreased, and related profit indicators have correspondingly declined year-on-year."

He noted that the industry is still in a deep adjustment period. Although Poly Developments has maintained a significant level of incremental investment, there are many existing projects, and destocking and profit improvement will still require a certain period.

Shanghai-based state-owned enterprise Greenland Holdings reported a "turn from profit to loss" in the first half of the year. Data shows that in the first half of this year, Greenland Holdings achieved revenue of 94.496 billion yuan, a year-on-year decrease of 18.06%; the net profit attributable to shareholders of the listed company was -3.506 billion yuan, compared to 210 million yuan in the same period last year.

Hangzhou-based Greentown China also experienced declines in both revenue and net profit. In the first half of this year, Greentown China achieved total revenue of 53.368 billion yuan, a year-on-year decrease of 23%; net profit was 1.211 billion yuan, a year-on-year decrease of 64%; profit attributable to shareholders was only 210 million yuan, a year-on-year decrease of 89.74%. This profit attributable to shareholders marked the worst performance in nearly two years for the same period.

Greentown China was once a private enterprise, founded by Song Weiping. In 2014, China Communications Construction Company took over and became the controlling shareholder.

In the first half of this year, nearly all of Greentown China's business revenues were declining. Among them, property sales revenue was 49.651 billion yuan, a decrease of 22.1% compared to 63.757 billion yuan in the same period of 2024; project management service revenue was 1.361 billion yuan, a decrease of 17% compared to 1.64 billion yuan in the same period of 2024.

The once "profit king" of central state-owned real estate companies, China Overseas Land & Investment, has also begun to see a decline in performance.

In the first half of 2025, China Overseas achieved operating revenue of 83.22 billion yuan, a year-on-year decrease of 4.27%; net profit attributable to the parent company was 8.599 billion yuan, a year-on-year decrease of 16.62%.

In terms of sales, from January to August this year, China Overseas' sales amounted to 150.3 billion yuan, dropping from second place in 2024 to third place.

China Resources Land, a central state-owned enterprise that continues to see growth in revenue and net profit, has replaced China Overseas as the new "profit king" in the real estate industry since last year. According to the first half financial report data, China Resources Land's net profit attributable to the parent company reached 11.88 billion yuan, ranking first, widening the gap with China Overseas' 8.599 billion yuan.

However, China Resources surpassed China Overseas not through development business, but through operational business revenue. Among them, recurring businesses such as shopping centers, office buildings, hotels, and long-term rental apartments, although accounting for only 21.7% of total operating revenue, contributed 60.2% of core net profit, reaching 6.02 billion yuan.

In contrast, development and sales-type businesses only brought in 3.98 billion yuan in core net profit, a year-on-year decrease of 23.8%.

"In the face of difficulties in profitability from real estate development projects, central state-owned enterprises have also tightened their belts. Whether it is China Resources among central enterprises or Xincheng Holdings and Longfor among private enterprises, their commonality is that the operational income from shopping centers, office buildings, and other formats has significantly increased." "This type of business has brought stable cash flow to real estate companies," said a real estate analyst from a brokerage.

Author of this article: Yue Jiachen, Source: Prism, Original Title: "Real Estate Companies in the Past Six Months: Living a Good Life by 'Lying Flat' | Prism"

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