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 the real estate development business was 70.54 billion yuan; the income from the 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 the development business has been continuously decreasing. In 2025, the development business suffered a profit loss for the first time, but the operation and service business achieved a post - core equity profit of nearly 8 billion yuan, offsetting the negative impact of the decline in 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 and become 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 and 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 payments, no extensions, no defaults" as the company's credit bottom - line.

According to Longfor's annual report, 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, bank financing accounted for 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 repaid about 22 billion yuan of debt at the group level, including 13.5 billion yuan of domestic bonds and HK$9.2 billion of overseas loans. There is still about 6 billion yuan of debt due this year, of which about 2.5 billion yuan is 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 cleared, 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, among Longfor's interest - bearing liabilities, the balance of foreign - currency 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 advance receipts decreased to 55%, the net debt ratio basically remained 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 position.

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

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

• First, strictly abide by credit, ensure that bank financing has no overdue payments or extensions, and there are no defaults on debts in the public market;
• 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 at the same time, especially control short - term debts and foreign - currency debts;
• Third, strengthen the financing and cash - management mechanisms, 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 bottoming out in 2025 and 2026, with the dual decline of the total liabilities and interest rates, the continued increase in the proportion of the 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 

Transition between Old and New Models is Almost Completed

It can be seen from Longfor Group's business income structure 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 inventory liquidation, tackle the hard problem of inventory, and will not deliberately focus on scale. The company's performance growth and stability mainly depend on the operating business.

Judging 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 a newly added value of 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 investment. Currently, Longfor still has about 22 million square meters of land reserves, and the total unsold value exceeds 200 billion yuan. The basic strategy is to determine expenditures based on sales and revitalize inventory. The requirement for new projects is to make each project a success.

Compared with the "conservative" strategy of the development business, the business in channels such as commerce is 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 rental income of the shopping malls 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 a total of 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. After excluding vehicle sales, the overall turnover increased by 17%, and the same - store turnover increased by 6%. The average daily customer flow was about 3.8 million person - times, with an overall increase of 16% and a same - store increase of 7%.

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

In the other channels, Longfor's service business achieved a total 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 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 been going on for 5 years, and the construction volume has dropped by 70%, with a very large adjustment amplitude. 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, based on this, 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 the year with 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 its "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.