Longfor: Revenue reached 97.31 billion in 2025, and it is expected to complete the foundation of the new model in two years.

On March 27th, Longfor Group released its annual performance report for 2025. The report shows that Longfor Group's operating income in 2025 was approximately 97.31 billion yuan.

Among them, the income from real estate development business was 70.54 billion yuan; the income from operation and service business was 26.77 billion yuan, accounting for 27.5% of the group's operating income, reaching a record high; the profit attributable to the owners of the company was 1.02 billion yuan; after excluding the impact of the fair - value changes of investment properties and other derivative financial instruments, the core loss attributable to the parent company was 1.7 billion yuan.

Since 2022, Longfor has actively adjusted its pace and reduced its liabilities, and the proportion of its development business has been continuously decreasing. In 2025, the development business suffered a profit loss for the first time, but the profit after core equity of the operation and service business was close to 8 billion yuan, offsetting the negative impact brought by the decline of the development business.

Chen Xuping, the Chairman of the Board and CEO of Longfor, said that it is expected that by 2028 at the latest, the income from Longfor's operation and service business will exceed that from real estate development, becoming the company's main source of income. At the same time, since the business structure of real - estate enterprises is deeply integrated with the company's income, liability structure, cash - flow sources and rhythm, and credit system, and the business structure and liability structure are mutually causal, the adjusted income structure mainly based on operation service income also means that Longfor has completed the "foundation" construction of the new development model.

Longfor's performance press conference

01

Safely Passed the Debt Repayment Peak

Debt safety is the top - priority lifeline for enterprises in the real - estate industry during the contraction period. During this period, Longfor has always taken "no overdue, no extension, no default" as the company's credit bottom - line.

According to Longfor's annual report data, as of the end of 2025, its interest - bearing liabilities decreased to 152.8 billion yuan, the average financing cost decreased to 3.51%, and the average borrowing term was extended to more than 12 years. Among the interest - bearing liabilities, the proportion of bank financing was nearly 90%, an increase of about 15 percentage points compared with the end of 2022, and the total amount and proportion of credit bonds continued to decrease.

Zhao Yi, the Chief Financial Officer of Longfor, said that in 2025, the group redeemed about 22 billion yuan of debt at the group level, including 13.5 billion yuan of domestic bonds and 9.2 billion Hong Kong dollars of overseas loans. There was still about 6 billion yuan of debt due within this year, of which about 2.5 billion yuan was credit bonds, and it has safely and smoothly passed the debt peak.

While reducing the total liabilities, Longfor has also been continuously adjusting its liability structure. As of the end of last year, the proportion of domestic loans of Longfor increased to 83%, the proportion of overseas credit loans decreased to 6%, the supply - chain financing was basically zeroed out, the new operating property loans in that year were about 18 billion yuan, the total amount exceeded 100 billion yuan, and the proportion increased to 66%.

In addition, the balance of foreign - currency liabilities in Longfor's interest - bearing liabilities also continued to decrease to about 15 billion yuan, accounting for about 10% at the end of last year.

As of the end of 2025, Longfor's asset - liability ratio after excluding prepayments decreased to 55%, the net - debt ratio remained basically stable at around 52%, and the cash - to - debt ratio after excluding pre - sale regulatory funds remained above one time, indicating a relatively stable financial situation.

2025 was the peak year for Longfor's debt repayment, with the due amount being about 22 billion yuan. Then it decreased to about 6 billion yuan in 2026 and 6.9 billion yuan in 2027. After that, it decreased significantly again in 2029 to about 4 billion yuan.

Zhao Yi revealed that in the future, Longfor's financing management strategy will strictly abide by three principles:

• First, strictly abide by credit, ensure that bank financing is not overdue or extended, and debts in the public market do not default;
• Second, continuously improve the NPI of operating assets, enhance the asset valuation, explore the space for operating property loans, optimize the financing structure, extend the account period, and especially control short - term debts and foreign - currency debts;
• Third, strengthen the financing and cash management mechanism, consolidate and establish an account - level control system, and reduce the peak of due debts in advance.

In the past few years, affected by the in - depth adjustment of the industry and the structural impact of settlement projects, Longfor Group's gross profit margin has also been continuously declining. However, the company's management expects that after the bottoming - out in 2025 and 2026, with the dual decline of the total liabilities and interest rates, the continued increase in the proportion of operation and service business income, and the gradual reduction of losses brought by the settlement rhythm of the development business, the company's gross profit margin will recover.

02

The Transformation of the Old and New Models is About to Be Completed

From the business income structure of Longfor Group, it can be seen that the company is relying more and more on the operation and service business.

Chen Xuping said that in the next few years, Longfor's real - estate development business will still focus on the digestion of existing inventory, tackle the difficult problem of inventory, and will not deliberately focus on scale. The growth and stability of the company's performance mainly depend on the operating business.

From the data, the income from Longfor's development business fell below 100 billion yuan for the first time in 2025, while the income from the operation and service business reached a new high.

Longfor's income structure in 2025

In 2025, Longfor was still relatively "conservative" in land acquisition. It newly acquired 7 projects throughout the year, with a total construction area of about 380,000 square meters, an equity construction area of about 260,000 square meters, and the newly - added cargo value was about 8.2 billion yuan. Compared with the contract sales of 63.16 billion yuan, the land - acquisition - to - sales ratio was only about 5.5%.

Zhang Xuzhong, an executive director of Longfor and the general manager of the real - estate development channel, said that Longfor's strategy is to put financial safety first, and the priority of ensuring debt repayment is higher than new investments. Currently, Longfor still has about 22 million square meters of land reserves, and the overall unsold cargo value exceeds 200 billion yuan. The basic strategy is to determine expenditures based on sales and revitalize existing inventory. The requirement for new projects is to make each project a success.

Compared with the "conservative" strategy of the development business, the channel businesses such as commerce are more active in terms of growth. In 2025, Longfor opened 13 new shopping malls, including 8 self - owned heavy - asset projects and 5 light - asset operation projects.

The shopping - mall rental income rose to 11.21 billion yuan in 2025, a year - on - year increase of 4%, and the overall occupancy rate was 96.8%.

As of the end of the period, Longfor had 99 shopping malls in operation, with a total opened construction area of about 10.5 million square meters, covering 25 key cities. The total turnover exceeded 82 billion yuan. The turnover excluding vehicle sales increased by 17% overall, and the same - store growth was 6%. The average daily passenger flow was about 3.8 million person - times, an overall increase of 16%, and the same - store growth was 7%.

It is reported that in 2026, Longfor will open about 9 more shopping malls. The channel operation target put forward by the management is to achieve a year - on - year growth of more than 5% for the same stores this year.

In other channels, Longfor's service business achieved an overall income of 12.58 billion yuan in 2025. Among them, the property - service income was 11.23 billion yuan, and the managed area was 360 million square meters; the asset - management income was 2.98 billion yuan, of which the income from the long - term rental apartment brand "Guan Yu" was about 2.48 billion yuan, and the overall occupancy rate was 94.1%; the income from Longzhizao was 1.3 billion yuan.

Chen Xuping said that the industry adjustment has lasted for 5 years, and the construction volume has dropped by 70%, with a very large adjustment range. However, during this period, while reducing liabilities under the downward pressure of the market, Longfor did not sell or dilute any of its core operating service assets, preserving the company's most core assets and providing the most favorable conditions for reserving future growth space.

Chen Xuping proposed that Longfor hopes that the profit from the operation and service business will achieve a growth of about 10% this year and reach the scale of 10 billion yuan as soon as possible. While providing a bottom - line for Longfor's profitability and maintaining stability, and driving growth with operating cash flow, on this basis, use operating property loans to replace the company's short - term financing and continue to reduce the debt pressure.

The management of Longfor expects that the company's profit will bottom out and rebound in 2027, and the income from the operation and service business will exceed that from the development business in 2028, completely completing this round of strategic transformation.

After a year of the highest debt pressure, Longfor still adheres to the practices of reducing liabilities, ensuring safety, and carefully evaluating investments, and continues to reserve redundancy to cope with industry changes.

Recently, UBS issued a research report maintaining a "Neutral" rating on Longfor Group. It pointed out that the losses in the development business bring pressure on asset reduction, but assets with higher valuation potential such as shopping malls provide potential for the improvement of Longfor's fundamentals.