Annual Report Insights | Chen Xuping from Longfor: This year's market decline is expected to narrow significantly, achieving a stabilization after a downturn

On March 27, Longfor Group held its 2025 performance meeting.

At the meeting, Chairman and CEO Chen Xuping provided his assessment of the real estate industry’s trends for 2026.

He stated that since the second half of 2021, when the real estate sector entered a deep adjustment, it has already been five years. During these five years, the construction volume of new homes in the entire real estate market has dropped by 70% compared to its peak, the transaction volume of new homes has decreased by 50%, and the prices of second-hand homes have fallen by nearly 40%.

“The extent of the overall adjustment is quite large. This has a significant impact on the real estate industry itself as well as on the entire Chinese economy.”

He believes that with the substantial decline and the continuous introduction of favorable policies to stabilize the housing market, the entire market, especially in some hot cities, has seen a stabilization in transaction volumes for second-hand homes since the first quarter of this year. Additionally, high-quality upgraded products in the new home market have also seen strong sales.

“So we believe that after five years of adjustment and such a deep decline, with policies continuing to be reinforced, the overall market’s decline this year is expected to narrow significantly, and there is hope for stabilization. Meanwhile, the warming of second-hand home transactions will subsequently lead to demand for new home replacements.”

Against this backdrop, Longfor is also actively preparing some products. Chen Xuping mentioned that last year, the Chongqing Yuhuajing project achieved sales of 3 billion RMB within eight months of entering the market, and this year, they will combine old projects with new land acquisitions to gradually release products.

On the same day, Longfor Group announced its 2025 performance report.

In 2025, the company’s operating revenue was 97.31 billion RMB.

Of this, the revenue from real estate development was 70.54 billion RMB, revenue from operation business was 14.19 billion RMB, and revenue from service business was 12.58 billion RMB. The combined revenue from operation and service business was 26.77 billion RMB, accounting for 27.5% of total operating revenue.

In 2025, the profit attributable to the company’s owners was 1.02 billion RMB. After excluding the impact of fair value changes of investment properties and other derivative financial instruments, the core loss attributable to the company’s owners was 1.70 billion RMB. Among this, the core profit from operation and service business was 7.92 billion RMB, continuously contributing stable profits.

During the same period, the basic earnings per share attributable to the company’s owners was 0.15 RMB, and after excluding the impact of fair value changes of investment properties and other derivative financial instruments, the core basic loss per share attributable to the company’s owners was 0.25 RMB.

In addition to the interim dividend of 0.07 RMB per share announced on August 29, 2025, the board has resolved not to distribute a final dividend for 2025.

As of the end of 2025, the company’s total consolidated borrowings amounted to 152.81 billion RMB, a decrease of 23.51 billion RMB compared to the end of the previous year.

The cash on hand was 29.2 billion RMB, with equity attributable to the company’s owners totaling 162.81 billion RMB, and the net debt ratio (net debt divided by total equity) was 52.2%. The average financing cost was an annual interest rate of 3.51%, with an average contractual loan term of 12.12 years.