Longfor Group reported a revenue of 58.75 billion yuan in the first half of the year, a year-on-year increase of 25%. It is about to pass the peak of debt repayment.

On August 29, Longfor Group released its interim results for 2025. According to the announcement, in the first half of 2025, Longfor Group achieved an operating income of 58.75 billion yuan (RMB, the same below), a year-on-year increase of 25%. Among them, the turnover of the development business was 45.48 billion yuan, and the income from the operating business was 13.27 billion yuan, a year-on-year increase of 1.3%.

In the first half of the year, Longfor achieved a net profit of approximately 1.38 billion yuan after core equity. Among them, the profits of the operation and service businesses continued to grow. The gross profit margin of the operation business was 77.7%, and the gross profit margin of the service business was approximately 30%, becoming the main source of the group's profits.

In the downward cycle of the real estate market, the priority of enterprise operating indicators has shifted from short - term profitability to survival ability and the health of cash flow. From Longfor's performance, it can be seen that in the up - cycle, the development business is used to cultivate the operation and service businesses, and in the down - cycle, the latter feeds back the development business. "Walking on two legs" has become the foundation for its strong risk resistance and ability to cross cycles.

The scene of Longfor's 2025 interim results conference

01 

Upgrade from a traditional developer to a high - quality development model

JPMorgan Chase pointed out that the stability and growth of Longfor's operation and service businesses provide important cash flow support and valuation anchoring for the company. With the continuous development and scale expansion of these businesses, Longfor is expected to achieve a fundamental optimization of its business structure in the next few years.

Longfor's operating income exceeded 20 billion yuan for the first time in 2022, and its revenue accounted for less than 10% at that time. In the first half of this year, this proportion has increased to 22.6%, further enhancing the contribution and stabilizer role of the operating business.

Specifically, the two major businesses of commercial investment and asset management contributed 7.01 billion yuan in income, a year - on - year increase of 2.5%. The proportions of commercial and asset management were 78.5% and 21.5% respectively, and the operating gross profit margin was 77.7%. The tax - excluded income of the service business was 6.26 billion yuan, a slight year - on - year increase, and the gross profit margin was approximately 30.0%.

Chen Xuping, Chairman and CEO of Longfor Group, said that Longfor stepped on the brakes and reduced its liabilities three years ago, changing its underlying operating logic. During this process, the operating business played two very important roles. First, it directly brought stable and healthy cash flow, providing continuous water for reducing liabilities. At the same time, the low cost and long term of the operating property loans laid the foundation for smoothly adjusting the debt structure. Second, the operating business guaranteed the possibility of Longfor's growth. "A safe enterprise must grow. What will drive future growth? It mainly lies in our four business lines from C2 to C5."

At the results conference, Longfor's management revealed that Longfor has cumulatively invested more than 100 billion yuan in cultivating operating businesses such as commercial investment, completing the adjustment of its business structure from a traditional development model to a model that emphasizes both development and operation.

This transformation is a rare successful case among domestic private real estate enterprises, enabling Longfor to shift from relying on one - time development sales revenue to having continuous rental income and service income, thereby obtaining a more stable and predictable cash flow source, providing the enterprise with higher anti - cyclical ability and adaptability to market changes.

Currently, Longfor has 89 malls in operation (including 75 heavy - asset and 14 light - asset malls), with a rental rate of approximately 96.8% in the first half of the year and a rental income of 5.5 billion yuan. It plans to open 10 new malls in the second half of the year, including 7 heavy - asset and 3 light - asset malls.

The management revealed that Longfor will also open approximately 10 Tianjie malls as planned in 2026 and 2027 respectively.

The property management business line currently manages approximately 2,200 projects and has a managed area of approximately 400 million square meters, achieving an income of 5.53 billion yuan in the first half of the year.

The asset management business line achieved a rental income of 1.24 billion yuan in the first half of the year. As of the middle of the year, the scale of the opened rooms of Crown Apartment reached 127,000, and the rental rate at the end of the period was approximately 95.6%.

The smart construction brand "Longfor Longzhizao", established in 2022, achieved a sales volume of 8.4 billion yuan in agency construction, a delivery area of 1.22 million square meters, and an income of more than 700 million yuan in the first half of this year, a year - on - year increase of more than 60%.

The above four business lines provide stable driving force for Longfor with a development mode of low leverage, strong operation, and positive cash flow.

At the same time, the group's management said that since last year, Longfor has also been trying to promote new products combining different formats, such as the combination of long - term rental apartments and block commerce. It refines its existing businesses, eliminates unprofitable and hard - to - establish moat formats, deepens the moat of high - quality businesses, and strengthens profitability.

02 

Reduced interest - bearing liabilities by 40 billion yuan in three years and will pass the debt repayment peak by the end of the year

"Financial security is the cornerstone of all development." At the results conference, Zhao Yi, Executive Director and CFO of Longfor, said that in the first half of the year, Longfor's interest - bearing liabilities continued to decrease by 653 million yuan compared with the end of last year, and the total interest - bearing liabilities at the end of the period were 169.8 billion yuan, with the scale decreasing in an orderly manner.

By replacing credit bonds with operating property loans and other methods, Longfor has been continuously lowering its financing cost and extending the debt maturity period. As of the end of June, Longfor's average financing cost was 3.58% per annum, and the average contract loan term was 10.95 years, both setting historical records.

As of June 30, among Longfor Group's interest - bearing liabilities, bank financing accounted for 87%, and its safety was recognized by banks. In terms of the types of interest - bearing liabilities, domestic loans accounted for 76%, and overseas credit loans accounted for 11%.

Zhao Yi revealed that there are no bonds due within 2025. There is still a syndicated debt of HK$9.5 billion to be repaid by the end of this year. 1.1 billion yuan has been repaid in advance in August, and the remaining part will be repaid in advance on a monthly basis. All overseas bonds will mature in four years starting from 2027.

It is reported that Longfor's total interest - bearing liabilities have decreased by approximately 40 billion yuan in the past three years, and it plans to reduce them by approximately 20 billion yuan by the end of this year. Starting from 2026, the debt repayment pressure will be significantly reduced, and it can start to operate with a light burden.

In the future plan, Longfor's total debt repayment in 2026 will be more than 20 billion yuan, and approximately 20 billion yuan in 2027. According to the stable growth expectation of its operating business, the company's financial stability can be basically guaranteed.

03 

Still prudent in land acquisition but optimistic about the long - term development of the real estate market

The data in the interim results announcement shows that in the first half of the year, Longfor achieved a contract sales volume of 35.01 billion yuan and a total sales floor area of 2.614 million square meters, of which the sales in first - and second - tier cities accounted for approximately 90%.

According to the statistics of CRIC, Longfor's sales performance ranked 12th in the industry in the first half of the year and second among private real estate enterprises.

On August 22, Longfor won a plot of land in Huaguo Village, Shizishan Street, Jinjiang District, Chengdu for 351 million yuan. In the first half of the year, Longfor acquired 4 plots of land in Shanghai, Suzhou, and Chongqing, with a total newly acquired land reserve floor area of 249,000 square meters and a newly added cargo value of approximately 5 billion yuan, concentrated in the Yangtze River Delta region and the western region.

However, Zhang Xuzhong, Executive Director and General Manager of the real estate business line of Longfor, said that Longfor is still prudent in land acquisition and always puts financial safety first. The importance of ensuring debt safety and project delivery is higher than new investments. "As of the end of June this year, our total land reserve is still 28.4 million square meters, and the equity land reserve is 21.13 million square meters. The unsold cargo value at the end of the period still exceeds 200 billion yuan. In the future, we will continue to strictly adhere to our investment scale and discipline. On the premise of ensuring financial safety, we will seize opportunities to acquire new land, focus on high - energy cities, and continuously improve our investment accuracy."

In addition, Longfor is also actively revitalizing its existing assets and reducing its inventory. It is reported that in the first half of the year, Longfor reduced its initial spot housing inventory by more than 8 billion yuan, revitalized 11 projects, and vigorously "ensured sales."

After the "replacement of old projects with new ones" in development projects, Longfor's development will have stronger certainty and sustainability.

Chen Xuping also said, "The stabilization of the real estate market is very crucial for the Chinese economy. Therefore, in the short term, we think the trend will depend on the intensity of policy stimulus. In the medium and long term, we are still very optimistic about the resilience of the Chinese real estate market. Because there is still a shortage of good houses in the core areas of first - and second - tier cities, and the improvement demand in the core areas is still very strong. Building good houses and providing good products and services in good locations in first - and second - tier cities is still a business worth doing in the long term."