Resilience Through Cycles, Diversified Development Builds Foundation, China Merchants Shekou Forges Ahead

After four years of turbulence, China’s real estate industry is now undergoing a deep adjustment while seeking a new balance. As the old narrative of “scale above all” fades, the market’s focus shifts to companies’ survival quality and transformation—exemplified by招商蛇口 (001979.SZ), which has delivered a model performance full of resilience and innovation.

In 2025,招商蛇口 achieved operating revenue of 154.728 billion yuan, with a net profit attributable to shareholders of listed companies of 1.024 billion yuan. Despite a challenging market environment,招商蛇口 proactively strengthened asset quality, maintained stable fundamentals, and ensured cash flow safety, securing profitability and laying a solid foundation for future lightweight operations.

Amid fluctuations in the profit statement,招商蛇口’s core operations demonstrated strong resilience. The company signed contracts totaling 196.009 billion yuan in sales, ranking fourth industry-wide against the trend; net cash flow from operating activities reached 9.693 billion yuan; and at year-end, cash and cash equivalents stood at 86.127 billion yuan. The “three red lines” remained in the green zone, reflecting the stability of a leading real estate enterprise amid industry winter.

During the 14th Five-Year Plan period,招商蛇口’s every step was steady and clear; looking ahead to the 15th Five-Year Plan, facing ongoing industry changes, this top state-owned enterprise is accelerating its transformation. By focusing on “precise investment, product upgrades, operational value-added, and asset revitalization,” it strives to promote high-quality development in the new industry cycle, steadily advancing toward its strategic goal of becoming “China’s leading integrated real estate park development and operation service provider,” injecting continuous momentum to navigate cycles.

Defying industry trends to rank among the top four, product strength builds sales “value”

In a context where industry sales are generally under pressure, scale is no longer the sole pursuit for real estate companies, but maintaining a certain scale remains fundamental to risk resistance.

Reviewing 2025,招商蛇口’s cumulative signed sales reached 196.009 billion yuan, with a total signed area of 7.1612 million square meters. Thanks to this performance, the company’s overall sales ranking improved by one position, firmly holding fourth place in the industry. Among the top five developers,招商蛇口 demonstrated strong resilience, with relatively stable sales fluctuations.

This ranking is supported not only by volume but also by highly optimized structural quality. During the reporting period,招商蛇口 adhered to “sales-driven investment and selecting the best,” adding 43 new land parcels in 2025, with nearly 90% of investments concentrated in core 10 cities; investments in first-tier cities accounted for 63%. These included five parcels in Shanghai, three each in Shenzhen, Beijing, Chengdu, and Hangzhou, and two in Xi’an. This intense focus on high-energy core cities directly translated into impressive sales performance.

招商蛇口’s market position in key cities continues to strengthen. It ranked in the top three in total sales in Shanghai, Shenzhen, Chengdu, Xi’an, Changsha, Nanjing, Zhengzhou, Suzhou, Foshan, and Nantong—10 cities in total—and entered the local top five in 15 of the 30 key cities nationwide.

In Shanghai,招商蛇口’s total sales exceeded 50 billion yuan, returning to the market leader position; in Beijing, sales approached 19.3 billion yuan, ranking fifth for the first time; in Hangzhou, despite fierce competition,招商蛇口’s nearly 17 billion yuan in sales propelled it into the top four for the first time; simultaneously, in Shenzhen, it maintained third place with over 15 billion yuan, and in Chengdu, sales surpassed 1 billion yuan.

These core cities with solid fundamentals and strong market resilience contributed over 60% of招商蛇口’s annual performance, fully validating the forward-looking and correct strategy of focusing on core cities.

Currently,招商蛇口’s total available saleable resources amount to about 340 billion yuan, with the “6+10” core cities accounting for 81%, and 94% of resources concentrated in the 30 key cities, highlighting high resource concentration in areas with the greatest safety margins.

Moving forward, to improve investment efficiency and accuracy,招商蛇口 has established a “6 Good” review system for all new projects—good city, good sector, good team, good turnover, good product, good operation—ensuring that every yuan is spent on the most valuable projects under reasonable costs.

Notably, the “value” of these sales data continues to rise. In 2025,招商蛇口’s average selling price increased sharply by 19.3% year-on-year to 27,686 yuan per square meter. This leap reflects an increased proportion of improved products and pricing advantages in core cities, further demonstrating market recognition of招商蛇口’s product strength.

In fact, as the industry has recently returned to the essence of residential living, regulators have also emphasized the concept of “good housing” based on market demand.招商蛇口 responded swiftly, developing and implementing its own “Good Housing” system, which includes a standard covering seven dimensions, 28 scenario modules, and 485 technical details—the “招商蛇口 Good Housing Quality Standard”—and has scaled this across more than 20 benchmark projects nationwide.

With excellent product quality and a comprehensive product system as the foundation,招商蛇口’s “Good Housing” projects have repeatedly passed market tests—over 20 new projects like Kangding 19 in Shanghai,招商玺 in Chengdu, and招商序 in Changsha achieved initial sales rates exceeding forecasts, with 15 projects making the national annual/half-year project lists.招商蛇口 ranked 4th in the “2025 China Real Estate Enterprise Product Power TOP 100.” Product strength has become a core lever for market recovery amid adversity.

Dual-wheel drive takes shape, diversified businesses build a “second growth curve”

If development is the “ballast” for招商蛇口 to navigate cycles, then asset operation and property services form its “propellers” for future growth.

Under the guidance of the integrated “developer + operator + service provider” model,招商蛇口’s diversified businesses not only stabilized their fundamentals in 2025 but also built professional barriers in their respective fields: asset operation revenue grew steadily to 7.63 billion yuan, and third-party property management expanded by 13% year-on-year.

In asset management,招商蛇口’s managed properties generated a 2.2% increase in revenue; during the period, 29 new projects were added, totaling 1.77 million square meters, focusing on core city formats, including 12 apartments, 8 commercial properties, and 3 industrial parks. It also leveraged synergies across multiple formats, adding approximately 828,000 square meters of light-asset management area, located in Shanghai, Hangzhou, Chengdu, Shenzhen, and other core cities.

Specifically, in the commercial sector,招商蛇口 opened 8 new commercial projects against the trend, bringing the total operational projects to 54 with about 3.4 million square meters of area. Through its “X+Commercial” core strategy, it continuously creates urban consumption hotspots, generating 1.96 billion yuan in operational income, with over 93% occupancy for projects open over three years.

In industrial parks,招商蛇口 actively transitioned toward industrial operation, focusing on intelligent technology, green tech, and life sciences, deploying in 18 key first- and second-tier cities across China, with 3.12 million square meters of managed area. Projects open over three years have an 88% occupancy rate, generating 1.3 billion yuan in annual operational income. The apartment business also performed well, with 1.4 billion yuan in annual income, and over 93% occupancy for high-quality apartments opened over a year ago; new projects in first-tier cities accounted for 92%.

By continuously expanding asset scale and refining operations to improve project performance,招商蛇口 also actively promotes project capitalization and exit strategies, leveraging public REITs to unlock the value of existing assets.

In 2025,招商蛇口 launched its second infrastructure project under Bosera Shekou Industrial Park REIT, planning to raise additional funds through assets like the Guangming Science and Technology Park B land in Shenzhen’s Guangming District and related assets in Qianhai, Nanshan District. Management has indicated that in 2026,招商蛇口 will continue to promote its fourth REIT issuance, forming a virtuous cycle of development, capitalization, and reinvestment within its core business.

As a platform for property services and light-asset operations,招商蛇口’s subsidiary招商积余 achieved “simultaneous growth in quantity and quality” in 2025. By the end of the period,招商积余 managed 2,473 projects covering 377 million square meters, with annual revenue of 19.273 billion yuan, up 12.23% year-on-year; net profit attributable to the parent was 655 million yuan.

Amid slowing new supply in the industry,招商积余 focused on core areas and high-quality projects, signing new third-party contracts worth 4.169 billion yuan, up 13%. Its business structure became more diversified and healthy, with new annual contracts in the market-oriented residential sector reaching 474 million yuan—up 60% year-on-year—and in non-residential sectors like aviation, higher education, and integrated facilities management (IFM), with increases of 85%, 25%, and 15%, respectively.

After years of expansion,招商蛇口’s “development + operation” dual-wheel model has moved from blueprint to reality: development provides stable cash flow and resource base, while asset operation and property services contribute sustainable income and capital appreciation. In a declining industry, this more balanced business structure effectively hedges cyclical fluctuations in development, building a deeper safety moat and broader growth potential.

Strict financial discipline, optimized debt structure, forging a stable foundation

In real estate, confidence is more valuable than gold—and often rooted in straightforward financial figures. In 2025, when liquidity pressures became a common industry challenge,招商蛇口 demonstrated the strength and resolve of a central enterprise through disciplined financial management.

Cash flow is the company’s lifeline. During the period,招商蛇口 optimized cash management precisely, achieving a net cash flow from operating activities of 9.693 billion yuan, with year-end cash and cash equivalents of 86.127 billion yuan. This ample liquidity gave招商蛇口 full discretion to respond to market fluctuations and seize investment opportunities.

Debt structure is a key indicator of health. As of the end of the reporting period,招商蛇口’s “three red lines” remained in the green zone: asset-liability ratio excluding prepayments at 64.17%, net debt ratio at 72.46%, and cash short-term debt ratio at 1.19. Its debt structure was stable and reasonable.

In fact,招商蛇口 has even stricter internal “three red lines,” which it uses as standards to continuously optimize debt structure. In 2025, the company proactively repaid 12 billion yuan of perpetual bonds and issued 14.1 billion yuan of operational property loans, significantly improving debt maturity profiles and costs. By year-end, short-term debt accounted for 23.1%, and foreign currency financing was only 0.6%, both at low levels.

The advantage of low-cost financing remains招商蛇口’s sharpest competitive edge in the era of credit stratification. Relying on its strong credit profile, the company added 17.94 billion yuan in public market financing during the year, with coupon rates among the lowest industry-wide; its total financing cost for the year was only 2.44%, and the overall cost of funds at year-end dropped to 2.74%, down 25 basis points from the beginning of the year, maintaining industry leadership.

Navigating cycles steadily,招商蛇口 also shares value with shareholders. In 2025, it spent 430 million yuan to repurchase 44.8 million shares, which have now been canceled, effectively increasing net assets attributable to shareholders. Since listing,招商蛇口 has paid dividends over 70% annually; in 2025, it distributed 461 million yuan, accounting for 45% of net profit attributable to the parent. Since restructuring and listing,招商蛇口 has returned a total of 43.988 billion yuan to shareholders.

As the industry moves away from high leverage and rough growth,招商蛇口’s low-cost financing, healthy debt structure, and ample cash reserves provide the confidence to maintain “four no losses” in complex environments.

Looking ahead to 2026, with policy support and market recovery,招商蛇口 will leverage the strong backing of China Merchants Group, along with its strategic focus, strong organizational execution, prudent financial management, and mature full-chain development and operation capabilities, to continue steady progress through the industry downturn and sustain long-term, stable growth.