The leading real estate company conducts a "big bath" in its performance, sacrificing profits to ensure a stable cash flow.
The real estate industry has been in a continuous downturn, and even the top - tier players have faced tremendous pressure. After five consecutive years of decline from the peak of sales, even leading listed real estate companies have to choose between "protecting profits" and "protecting cash flow".
On the evening of April 17th, Poly Developments and Holdings Group Co., Ltd., which has ranked first in annual sales for three consecutive years, released its 2025 performance report:
- Annual sales reached 253 billion yuan, ranking first in the industry for three consecutive years;
- Operating income was 308.144 billion yuan, a slight year - on - year decrease of 1.13%;
- Net profit attributable to the parent company plummeted by 79.31%, leaving only 1.035 billion yuan;
- Net cash flow from operating activities was 15.191 billion yuan, a year - on - year surge of 142.74%;
- Available cash on hand was 122.9 billion yuan, and the cash - to - short - term debt ratio was 1.74 times;
- The comprehensive financing cost dropped to 2.72%, the lowest in history.
On one hand, the profit was "halved and then halved", while on the other hand, the cash flow was abundant and the financing cost hit a record low. Obviously, Poly took the initiative to "perform a major operation" on itself and prioritized protecting cash flow in its business strategy.
Data source: Poly Developments and Holdings Group Co., Ltd. 2025 Annual Report
01 A significant decline in net profit
Poly Developments and Holdings Group Co., Ltd.'s net profit attributable to the parent company was 5.001 billion yuan in 2024, and suddenly dropped to 1.035 billion yuan in 2025. The non - recurring net profit attributable to the parent company even declined by 84.52% year - on - year, dropping to 659 million yuan, becoming the most concerned focus in the annual report.
Poly Developments and Holdings Group Co., Ltd. explained that during the reporting period, affected by industry and market fluctuations, the gross profit margin of the company's real estate project transfers decreased year - on - year. The company's revenue in the real estate sales industry decreased by 1.19% year - on - year, and the gross profit margin also decreased by 0.99 percentage points.
Although Poly Developments and Holdings Group Co., Ltd.'s gross profit margin is lower than that of its peers such as China Overseas Land & Investment and China Merchants Shekou Industrial Zone Holdings Co., Ltd., it is still within a reasonable range against the background of a significant decline in corporate profits.
The huge gap among different regions across the country is also reflected in Poly's annual report. Among Poly's five major regions, only the East China region had positive revenue growth, while the North China region had the largest decline, reaching 33.84%. In terms of gross profit margin, the East China, North China, and Central regions increased compared with the previous year, while the South China and Western regions decreased by 4.66 and 5.63 percentage points respectively.
In addition, the deterioration of investment income from associated and jointly - controlled enterprises is also one of the main reasons for the decline in Poly's net profit margin. Affected by the under - performance of some cooperative projects, Poly Developments and Holdings Group Co., Ltd.'s investment income from associated and jointly - controlled enterprises decreased from 1.22 billion yuan in 2024 to - 140 million yuan in 2025, a reduction of 1.36 billion yuan, further eroding the net profit attributable to the parent company. At the same time, the proportion of minority shareholders' profits and losses increased significantly, rising from 48.7% in 2024 to 84.5% in 2025, further reducing the net profit attributable to the shareholders of the parent company.
Data source: Poly Developments and Holdings Group Co., Ltd. 2025 Annual Report
In the past two years, listed real estate companies have significantly made provisions for asset impairment, actively reduced net profit, cleared risks in advance, and reduced dividends, which has become a common way to cope with market pressure. This time, Poly also carried out the same "technical operation".
In 2025, Poly Developments and Holdings Group Co., Ltd. made provisions for asset impairment of 6.958 billion yuan at one go, directly swallowing 4.447 billion yuan of net profit attributable to the parent company, becoming the most important factor dragging down profits. In terms of the composition of impairment, the provision for inventory write - down accounted for the highest proportion, reaching 5.442 billion yuan, accounting for 78.2% of the total impairment amount, mainly involving projects with difficult sales and declining expected returns such as Foshan Poly CCCC Grand Metropolis, Wenzhou Binjiang Cloud Valley, and Changzhou Poly Tianhui; the provision for impairment of long - term equity investments was 1.015 billion yuan, accounting for 14.6%, mainly targeting cooperative enterprises such as Shanghai Huayuan Industry and Tianjin Ruifeng Real Estate; the provision for impairment of other receivables was 501 million yuan, accounting for 7.2%, mainly for the impairment of receivables from affiliated companies and cooperation partners.
For this significant provision for impairment, Lixin Certified Public Accountants issued a standard unqualified audit report for the company. Industry insiders believe that this is Poly's initiative to clean up historical burdens and prepare for a lighter future.
02 The inventory pressure is still high
Based on sales volume, Poly Developments and Holdings Group Co., Ltd. has ranked first in the industry for three consecutive years. In 2025, Poly achieved a contracted sales amount of 253 billion yuan, a year - on - year decrease of 21.67%, with a larger decline than the industry average, and the decline has exceeded 20% for two consecutive years. This means that Poly has felt greater pressure from the decline in sales than its peers.
In order to slow down the decline in performance, Poly has been continuously increasing the proportion of land reserves in core cities. In 2025, the total land price for Poly's annual land acquisition was 79.1 billion yuan, of which the total land price for land acquisition in first - and second - tier cities accounted for more than 90%, and the proportion of land acquisition in core cities was 99%, with Beijing, Shanghai, and Guangzhou accounting for about 48%.
The bet on first - and second - tier cities is to hedge against the "old inventory" left in third - and fourth - tier cities during the peak period of the real estate market, which is difficult to digest.
From the perspective of inventory structure, Poly's unsold area is mainly concentrated in core cities, and the inventory turnover period is reasonable. However, Poly's inventory still faces structural pressure: First, the scale of completed properties has continued to grow, increasing by 7.2% from the beginning of the period to 213.77 billion yuan, and the proportion in the total inventory has increased to 28.1%, increasing the pressure on inventory turnover; Second, the proportion of existing projects is relatively high, especially the existing unsold projects acquired before 2022, and some high - cost land projects are difficult to sell; Third, there is still a large amount of inventory in third - and fourth - tier cities, and the pressure on inventory turnover is prominent.
In order to speed up inventory turnover, Poly has taken a series of measures:
- "Revitalizing old projects": Adjusting and optimizing the regulations of existing projects and upgrading products to give old projects a new look;
- "Producing according to sales": The newly started construction area decreased by 40% year - on - year to reduce new inventory;
- Flexible pricing: Reducing prices for promotions and offering group - purchase discounts, sacrificing gross profit margin for sales speed.
What's the effect? In 2025, the existing projects of Poly contributed a contracted sales amount of 95.3 billion yuan, accounting for about 38% of the total contracted sales amount. The inventory turnover has initially achieved results, but there is still a long way to go.
After Poly released its financial report, Kaiyuan Securities analyzed and predicted that Poly's short - term profit will still be under pressure in 2026, the gross profit margin will bottom out in 2026 and recover in 2027, but the PE ratio will continue to decline in the next three years.
In the reshuffle period of the industry, only the fittest will survive. Poly Developments and Holdings Group Co., Ltd. is striving to protect its cash flow with its advantages in bond issuance, financing cost, and sales operations, and win by maintaining stability.