When the industry is being reshaped, ZhongAn has provided an alternative path.

This article is sourced from: Times Weekly Author: Tang Luo

In the past year, the key words in the real estate industry have focused on pressure and recovery. According to iFinD data, 71 A-share real estate companies have issued profit warnings for 2025, with more than seventy percent falling into losses. Among this long list, there are many former industry giants and established listed real estate companies.

As the industry’s clearing and reshuffling unfolds with unprecedented intensity, the periodic operational adjustments reflected in corporate financial statements are, in essence, an objective reflection of the entire industry shedding the pains of the old model. Shrinking sales scale, increasing pressure from inventory impairment, and lengthening de-inventory cycles—these are not isolated cases of any one company, but common issues within the industry and an inevitable result of a deep market adjustment.

However, at the beginning of 2026, policy signals were clearly released. The first issue of the Seeking Truth magazine published Improving and Stabilizing Real Estate Market Expectations, clearly stating that “the real estate industry is an important industry in the national economy and a significant source of residents’ wealth. The future real estate market will bid farewell to high-leverage expansion, shifting to optimizing stock and enhancing quality, reshaping a new balance between resident wealth and industry development.” Two months later, Continuing to Work on Stabilizing Expectations reiterated this tone, emphasizing “continuing to stabilize the real estate market with stronger and more precise measures.”

This means that the industry has not lost its space but has entered a new stage with higher thresholds and more stable rhythms. Against this backdrop, evaluating a company’s comprehensive ability to navigate economic cycles can no longer rely solely on short-term financial performance; instead, attention should be focused on whether its fundamentals are sound, whether its strategy is clear, and whether it possesses long-term capabilities. The industry’s pains test companies’ responses. Some choose to contract and wait, while others actively adjust, accelerate cash collection, and consolidate asset quality to accumulate strength for the next stage. Zhong’an Group, deeply rooted in Hangzhou, is an observational example among the latter.

Stabilizing the Foundation: Using Financial Discipline and Quality Land Reserves to Hedge Systemic Risks

During the industry’s downturn cycle, the primary task of real estate companies has shifted from development to survival, with the premise of survival being the stability of fundamentals. In Zhong’an’s strategic logic, “stability” is placed at the forefront—this is not conservatism but a reverence for industry laws.

First, there is the safety margin at the financial level. Zhong’an has long maintained a “green file” status, with core indicators such as net debt-to-equity ratio and cash short-term debt ratio within the industry safety range. By the end of 2025, the group’s asset-liability ratio decreased by 5 percentage points to 62.2%, and the cash short-term debt ratio improved to 1.35. In a context where the essence of risk in the real estate industry is primarily liquidity risk, this has become a key advantage—only by safeguarding cash flow can a company have time to adjust and repair. It is based on this financial security that, in the face of deep industry adjustments, Zhong’an can act calmly and proactively: increasing de-inventory efforts, activating the front line through a “bottom-line pricing + partner sales” mechanism; specially promoting accounts receivable recovery to exchange operational actions for cash flow.

Next is the high certainty of land reserves. Zhong’an’s land reserves are mainly distributed in several core cities of the Yangtze River Delta, with an average land cost of about 2,550 yuan per square meter, providing a relaxed profit margin for subsequent development due to a reasonable cost structure. This regional deep cultivation strategy has shown stronger stability in the current environment. Core cities in the Yangtze River Delta, represented by Hangzhou, possess both economic vitality and a continuous influx of population, with a substantial and resilient market demand that is currently in a stabilizing and recovering phase. This reasonable and high-quality regional layout not only builds a natural firewall for Zhong’an against market downturn risks but also signifies that its assets possess high liquidity and anti-decline attributes.

                    | Classic Project Showcase (Image source: Zhong'an Group official WeChat)

Stability is the foundation of all strategic actions at Zhong’an. It is based on this financial security and land reserve confidence that Zhong’an has the capacity to consider “how to live better” and build longer-term competitiveness.

Seeking Change in Stability: Reshaping Product Certainty through System Engineering

If stability addresses the current survival crisis, then management and system “advancement” point to the core competitiveness of the enterprise in the future. In a context where the industry logic has changed, merely relying on land acquisition and sales to drive growth can no longer sustain long-term competitiveness.

Zhong’an’s approach to breaking the deadlock is to decisively shift its operational focus from extensive single-project development to refined system capability building. Homebuyers in China’s real estate market, especially those in vibrant and sensitive markets like Hangzhou, have demanding requirements for product quality. In such a market, Zhong’an has recently shifted its focus from project-oriented to system-oriented, continuously strengthening systematic thinking, proposing “collaboration of three major systems: real estate, engineering, and services,” as well as a seven-dimensional integration of “city, market, construction, venue, technology, greenery, and services.” On the product side, Zhong’an continuously iterates, gradually transforming the value orientation of safety, comfort, greenery, and health into perceptible living experiences.

                    | Overview of "Seven Dimensional Integration" (Image source: Zhong'an Group official website)

On the engineering side, Zhong’an has adopted management logic similar to that of the manufacturing industry. The coding of prefabricated components upon entry, monitoring deviations on smart construction sites, and standardized procedures in the technology library—engineering systems have shifted from passive control to proactive pre-control. Quality control is prioritized, aiming to eliminate quality issues as much as possible at the design stage, with engineering, customer service, and property management intervening early to feed real living experiences back into product design.

                    | Full-cycle Green Construction Guide (Image source: Zhong'an Group official website)

Of greater long-term significance is that Zhong’an is building a quality control data center covering the entire business chain. Data from material inspections, key node acceptance, to post-delivery repairs are all integrated into a database, achieving continuous iteration through the path of “problems-data-optimization.” In a stage where delivery certainty is highly valued in the industry, this system truly constitutes a competitive barrier for the company.

What Zhong’an has established at this stage is not merely a mechanism to avoid errors but a set of continuously evolving systems.

Seizing Opportunities for Progress: Redefining Asset Valuation and Service Value Boundaries

As profits from single residential development continue to shrink, the capital market’s dimensions for assessing real estate company value have changed: in addition to looking at financial stability, there is also a focus on whether the company can build stable cash flow and create cross-industry collaborative value.

When product power becomes foundational, service power is the key variable determining asset value. Zhong’an’s third competitive strength lies in breaking the traditional boundary where delivery is the endpoint, constructing a micro-city ecosystem through the “real estate +” strategy to achieve a comprehensive premium on service value.

                    | Strategic Overview of "Horizontal Integration and Vertical Connectivity" (Image source: Zhong'an Group official website)

The past logic of real estate companies was that selling was the end, but Zhong’an promotes the integration of the service system throughout the entire development cycle. From introducing customer needs during the positioning phase, to clarifying future service lists during the sales phase, and then implementing smart property and operational systems after delivery, services have transformed from an add-on to a part of the product. Homebuyers are purchasing not just the house itself but a complete set of predictable lifestyles.

Even more forward-looking is Zhong’an’s promotion of the “real estate +” ecological strategy. The deep interconnection of four major sectors: real estate, commerce, services, and capital, forms a micro-city ecosystem capable of mutual enhancement and continuous value output. Commerce provides vitality to spaces, residential areas stabilize core customer groups, services enhance experiential stickiness, and the capital system provides financial and construction support. The more complete the ecosystem, the smaller the fluctuations of individual projects, the more stable the company’s cash flow, and the higher the valuation given by the capital market.

                    | Overview of Diverse Industries Under Zhong'an (Image source: Zhong'an Group official WeChat)

The IOC·Lianxi project at the core of Hangzhou’s Olympic Sports Center is a concentrated example of this system. Faced with the challenges of super-tall construction, multi-industry integration, and high-end service operations, Zhong’an’s systematic capabilities have been fully displayed: the engineering system ensures the construction precision and complexity of super-tall buildings, the service system anticipates hotel-level living scenarios, and the ecological system integrates river view resources, commercial operations, and high-end residential experiences, turning the project into a composite value carrier that transcends traditional housing. The vertically integrated intelligent scheduling system for vertical transportation and the smart security system within the project further elevate the super-tall living experience to new heights.

                    | Schematic of Commercial Support for Zhong'an IOC·Lianxi (Image source: Zhong'an Group official WeChat)

Such an ecological asset package that can traverse cycles and generate stable collaborative cash flow has pricing logic that has long broken away from the traditional “cost + profit” model, genuinely reflecting the high-dimensional premium capability created by ecological collaboration, thus opening up new growth poles for enterprises in an era of thin profits.

Anchor for Traversing: Long-term Governance and Digital Leap

Building and operating such a large and complex modern operational system requires significant upfront investment and a long adjustment period, fundamentally posing a challenging inquiry into long-termism. This brings forth the core driving force propelling Zhong’an forward: a strategic resolve that transcends cycles, a focus on social value, and continuous evolution in internal governance.

The concept of “strategy leading the future” and the mission of “committing to developing socially beneficial endeavors” form the cultural foundation of Zhong’an’s system. A clear set of values enables the company to disregard short-term gains and losses, consistently adhering to transparent and standardized governance practices for many years, while maintaining long-term investments in areas such as green building research and social welfare.

                    | Zhong'an Social Responsibility Showcase (Image source: Zhong'an Group official WeChat)

Entering 2026, to further stimulate organizational momentum, Zhong’an has once again boldly sought progress in internal governance: comprehensively launching AI construction, starting with key nodes such as human resources, and gradually achieving AI-driven decision-making across all business processes to effectively enhance management efficiency. At the same time, it deeply promotes the “controlling upper empowerment, enhancing lower efficiency” mechanism to unleash operational and organizational vitality. This deep reform aimed at internal efficiency ensures that the enterprise can remain agile and robust in harsh conditions.

Conclusion

The old logic of the real estate industry is retreating, while the new logic is still forming. The emphasis on “high-quality development” and “good houses” highlighted by Seeking Truth is becoming the new industry coordinate. In this stage that emphasizes systemic capabilities, product capabilities, and long-termism, the differentiation of enterprises will be far more pronounced than in the past.

Zhong’an’s path is highly representative: maintaining stability to safeguard the bottom line, enhancing capabilities through systematic construction. In the midst of industry adjustments and periodic challenges, Zhong’an has not passively waited but has actively adjusted, accelerated cash collection, and solidified asset quality to accumulate strength for the next stage.

As the market gradually emerges from the trough, the companies that can truly traverse cycles are often not those that charge fastest at the peak but those that complete self-repair and capability rebuilding during the downturn. Zhong’an’s exploration is an attempt to answer the proposition raised by Seeking Truth: how to continuously create certainty in an uncertain industry.