Financial Insights · Annual Report Highlights | China Merchants Shekou: Focusing on core cities, industry scale growth achievements are hard-won

Ask AI · How can China Merchants Shekou improve its industry ranking against the odds?

On March 17, China Merchants Shekou held its 2025 annual performance briefing. Chairman Zhu Wenkai, President and General Manager Nie Liming, Deputy General Manager Wu Bin, Deputy General Manager Lü Bin, and the company’s Chief Financial Officer and Secretary to the Board, Yu Ziliang, attended.

The financial report shows that in 2025, China Merchants Shekou’s cumulative contracted sales area reached 7.1612 million square meters, down 23.5% year over year. Revenue totaled RMB 154.7 billion, down RMB 24.2 billion year over year; gross profit decreased by RMB 4.8 billion; investment income from joint ventures also fell by RMB 2.3 billion.

In response, management said that in terms of numbers, the impacts mainly come from three aspects. First, over the past four years, the real estate market has undergone a deep adjustment, and profits have been declining, and this decline has been a drop in both volume and price. As a participant in the industry, China Merchants Shekou has also experienced relatively large fluctuations in operations. The changes in these 2025 figures reflect the widespread impact on companies’ profitability under the backdrop of an industry downturn.

Second is impairment provision. China Merchants Shekou has always adhered to a prudent principle; in 2025, the company made impairment loss provisions of more than RMB 4 billion. Third is depreciation. China Merchants Shekou measures investment properties under the cost accounting method. In 2025, depreciation for investment properties and fixed assets amounted to more than RMB 3 billion. These accounting treatments have some effect on the company’s reported profit for the current period; in the long run, they also help strengthen the quality of the company’s assets and prepare for the future with a lighter load.

In the future, on the one hand, the company will still have to bear the pressure from old projects with low returns and even losses. As they are gradually digested and activated, they will bring a dent to future profits. On the other hand, there are also positive signals. Over the past two or three years, China Merchants Shekou has focused on core areas, selecting the better among the best, and it has also invested in some good projects, and profits will gradually be recognized.

In terms of investment strategy, China Merchants Shekou will continue to maintain its focus on key regions and key cities, investing based on sales (sell-first financing), and carefully selecting investments. It will adhere to endogenous development, selecting the best among investment targets so that every project meets the “six good” investment standards, ensuring effective deployment of resources. New land acquisitions will be even more focused on project turnover speed and the realization of returns. It will also fully leverage its internally developed competitive-investment digital benchmarking and matching system, which enables it to know the situation of both itself and the other party, and to adjust its investment and development strategy at any time based on market and company dynamics. Based on market conditions and cash collection, it will meet the “three red lines,” while also balancing scale and profit.

In 2025, China Merchants Shekou achieved contracted sales of RMB 196.009 billion. Its industry size moved up by one place to fourth.

In management’s view, this achievement has not come easily. China Merchants Shekou ranked among the top three in full-coverage sales in ten cities including Shanghai, Shenzhen, Chengdu, Xi’an, Changsha, Nanjing, and Zhengzhou. In addition, it also ranked among the top five among the nationwide key 30 cities in 15 cities. In such a sales structure, last year, the cities among the company’s top five by sales scale all exceeded RMB 10 billion. Shanghai was the first to lead: full-coverage sales exceeded RMB 50 billion, and it regained the No. 1 market ranking in Shanghai. Beijing, the second-place city with RMB 19.3 billion in full-coverage sales, also entered the top five in Beijing for the first time—its ranking. Hangzhou, the third-ranked city, had RMB 16.9 billion, and Hangzhou also entered the top four for the first time in the company’s development history. Competition in these markets is fierce, and obtaining a share of market competition is not easy. This also basically confirms the foresight and correctness of the company’s strategy of focusing on core cities. It is precisely through cities with relatively solid fundamentals and strong market resilience that the company supports its steady performance during the industry’s winter.

For 2026, management said sales plans will also be adjusted according to the current competitive landscape in each city, the value of saleable resources, and the supply of new offerings within the year, to ensure that each round of launches closely aligns with the market’s sales rhythm. “Overall, in 2026 we will continue to deepen efforts in core cities, use good housing and good service to win customers, and use precise strategies to get through the cycle—so as to outperform other peers in a market that stabilizes and recovers from declines.”