After the pain comes new life. Huafa Group is emerging from its adjustment period, returning steadily?

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Produced by|China-Fang Network

Reviewed by|Li Xiaoyan

In a critical stage of deep adjustments in the real estate industry, as developers accelerate clearing out and reshaping, Zhuhai China Fortune (China Fortune Shares) is pushing a systematic transformation, directly facing cyclical challenges, repairing the fundamentals of operations, and anchoring itself to a direction of high-quality development. Although the company’s 2025 performance is under pressure and its personnel and organizational structure have undergone phase-specific adjustments, relying on strong backing from Zhuhai’s state-owned assets, active reforms by management, continuous optimization of its financial structure, and steady cultivation of operating business, the company is emerging from its period of turbulence, moving into a new sustainable development cycle with a lighter, more efficient, and more focused posture.

Since 2025, Huafa Shares has gone through a round of concentrated management updates and optimization of its organizational structure. This is not a passive response, but rather an inevitable choice during the period of industry adjustment, when state-owned enterprise governance modernization and operational flattening take shape. Over the past two years, the company completed a smooth handover of its core management team. The new executive management team led by Guo Lingyong combines industry experience with a market-oriented perspective. The team size was streamlined to 6 people, significantly shortening the decision-making chain and greatly improving execution efficiency.

In this round of personnel adjustments, there are both senior managers who have long been accompanying the company’s growth and market-oriented talents brought in from leading real estate developers such as Longhu, Gemdale, and Huaxia Happiness. This creates a complementary pattern of “state-owned-asset heritage + market-oriented capabilities.” At the same time, professionally trained managers in fields such as design and marketing introduced from outside are flowing in an orderly manner. This aligns with the industry’s talent cycle and the company’s strategic orientation of focusing on its core business. Overall, it presents a clear thread of “eliminating redundancies, strengthening professionalism, and improving effectiveness.”

Organizational change is advancing with equal depth. From November 2025 to January 2026, Huafa Shares optimized its regional layout twice. It shifted from the “headquarters—bureaus—cities” three-level management and control to a “headquarters—regions” two-level direct supervision model. It abolished the bureau-level platforms, established seven sub-regional units directly connecting to headquarters, cut out intermediary management layers, and achieved concentrated allocation of resources and rapid response on the front line. This transformation directly targets the pain points of traditional real estate developers—administrative redundancy and delayed responsiveness. It is consistent with the trends of leading state-owned enterprises such as Poly, China Overseas, and China Resources, and it is a key move to cut costs and increase efficiency while focusing on core markets.

Affected by factors including weaker-than-expected industry sales recovery, recognition of impairment provisions for stock assets, and the concentrated release of expansion costs from prior periods, Huafa Shares is expected to see a phase-specific loss in net profit attributable to shareholders in 2025. This is a common industry pressure under deep adjustment, and it is also a rational choice by the company to actively clear historical burdens and move forward lightly.

Looking back at its development path, from 2020 to 2023, Huafa Shares aligned with urbanization advancement and regional development needs, moderately expanded its land reserve and improved its ranking by scale. It exceeded 100 billion yuan in sales for three consecutive years, stayed among the top ten in the industry, and laid the foundation for a nationwide layout. As the industry shifted toward “low leverage, stable turnover, and emphasis on returns,” the company quickly contracted its investment pace. From 2024 to 2025, its land investment amounts dropped sharply to around 7 billion yuan, proactively reducing the demand for scale and focusing on the disposal of existing inventory.

On the financial front, Huafa Shares has demonstrated the stability and resilience unique to state-owned enterprises. As of the end of September 2025, the company’s asset-liability ratio had already fallen to 69.72%, continuing a steady downward trend for many years. Net cash flow from operating activities reached 17.416 billion yuan, increasing significantly year over year. Operating cash flow has continued to turn positive. Cash and cash equivalents are sufficient, and the unused amount of bank credit lines is more than 250 billion yuan, providing a strong liquidity safety buffer. In February 2026, the company announced that it plans to raise 3 billion yuan through a private placement aimed at its controlling shareholder, Huafa Group, to be used for core project construction and optimization of its financial structure. The state-owned capital’s full subscription reflects long-term confidence, which will further reduce leverage, strengthen capital strength, and provide solid support for operational recovery.

In response to questions from the market regarding joint development and equity structure, the company responded to concerns through more transparent information disclosure. It gradually optimized its cooperation model, increased its share of equity, and drove shareholder returns back into a reasonable range. Over the past period, the company relied on its state-owned credit standing and, through diversified financing tools such as bonds and private placements, kept its capital chain secure—winning valuable time windows for steady operations during the industry adjustment phase.

Facing pressure to dispose of existing land reserves, Huafa Shares has focused on the core of “unlocking existing reserves, optimizing the structure, and collecting funds,” and has rolled out a package of measures. On the one hand, it actively connected with local governments regarding land buybacks; cities such as Shenzhen successfully completed the buyback and collection of funds for commercial land, optimizing its asset structure and easing funding pressure. On the other hand, it focused on high-quality projects in core cities, accelerating construction, launching sales, and selling to improve turnover efficiency, thereby driving a gradual and orderly decline in inventory. In the third quarters of 2024 to 2025, the company’s inventory decreased from 248 billion yuan to 225.9 billion yuan, and the effects of disposal have begun to show.

In terms of regional layout, the company stays committed to core city clusters such as the Guangdong–Hong Kong–Macao Greater Bay Area, the Yangtze River Delta, and the Beijing–Tianjin–Hebei region. It reduces efforts on non-core fronts and concentrates resources in higher-value segments. Sub-regions such as Shanghai–Jiangsu, Zhejiang–Fujian, and Guangzhou–Shenzhen–Guangdong–Shenzhen rely on strong demand support, becoming the main driver for sales fund recovery and profit contribution. Sub-regions such as the western region and the northern region focus on intensive cultivation to achieve steady operations. This strategy of “core focus and regional deep cultivation” not only aligns with the industry trend toward higher concentration, but also maximizes the reduction of risk from cyclical fluctuations.

While stabilizing the underlying fundamentals of its development business, Huafa Shares is steadily pushing a dual-wheel drive of “development + operations,” cultivating long-term growth engines. The company laid out its commercial operations as early as 2014. After years of cultivation, it manages more than 160 commercial projects with a managed area of 3.65 million square meters. Rental income increased from 344 million yuan in March 2022 to 785 million yuan in 2024, maintaining rapid growth. Consistent with the strategic shift among leading real estate developers such as China Resources, China Overseas, and Longhu toward operating assets, Huafa Shares is gradually increasing the proportion of business such as commercial operations, property services, and industrial support, reducing reliance on single-family housing development.

As a core listed platform of Zhuhai’s state-owned assets, Huafa Shares carries the mission of urban development and industrial coordination, deeply participating in areas such as Zhuhai’s urban renewal, the construction of industrial carriers, and people’s livelihood projects. Beyond real estate, it is opening up a second growth curve. This “real estate + city services + industrial operations” model not only fits the functional positioning of state-owned enterprises, but also provides solid support for the company to pass through cycles and achieve sustainable operations.

Short-term personnel turbulence, performance fluctuations, and inventory pressure are the inevitable tests every real estate developer faces during its transition period, not signs of an inability to develop. Huafa Shares responds to cyclical challenges with proactive change; activates governance effectiveness by streamlining the organization; fortifies the bottom line of safety with financial steadiness; and lays out a future strategy through transformation—fully demonstrating the responsibility and adaptability of a state-owned enterprise.

As management alignment is achieved, organizational effectiveness is released, existing assets are unlocked, private placements are implemented to empower operations, and operating businesses accelerate, Huafa Shares is gradually moving out of its adjustment period and returning to a track of steady growth. Against the backdrop of accelerating construction of new models and new order in the real estate industry, this state-owned enterprise developer that is deeply rooted in Zhuhai and has a nationwide presence will deliver long-term value with a clearer strategy, more efficient operations, and more robust financials—contributing exemplary strength to high-quality development in the industry.

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