S&P assigns Longfor a "Stable" outlook, expecting liquidity to remain ample over the next 12 months.

On March 31, international credit rating agency S&P released its latest rating report on Longfor Group, confirming the company rating at BB- with a “stable” outlook.

“A stable rating outlook reflects our view that the company’s liquidity will remain sufficient over the next 12 months.” S&P said that, benefiting from business diversification, Longfor Group’s non-real-estate development businesses generate stable cash flow, which mitigates risks in the current downturn cycle and will support the company’s liquidity. In addition, prudent financial management will continue to underpin the company’s debt-servicing ability.

By the end of 2025, Longfor Group’s interest-bearing liabilities were 152.81 billion yuan, down 23.51 billion yuan from the end of 2024, a decline of 13%. With incremental operating property loans and positive operating cash flow, Longfor has safely and smoothly passed the debt peak: in 2025, it repaid a total of 22 billion yuan of debt, including domestic credit bonds, CDB/China Bond Guarantee Scheme-backed bonds, and offshore credit loans. In 2026 and beyond, the size of each year’s maturing domestic bonds and offshore debt is limited. Specifically, the remaining amount due in 2026 is about 6.1 billion yuan, and that due in 2027 is about 6.2 billion yuan.

At present, the operating cash flow of Longfor, including capital expenditures, has been positive for three consecutive years, with net inflow of 5.8 billion yuan in 2025. According to S&P’s forecast, Longfor will generate about 6 billion yuan of operating cash flow inflows each year in 2026 and 2027. Combined with the incremental operating property loans, S&P believes that Longfor’s debt-servicing and refinancing risks over the next 12 months are manageable.

In its latest research report, CITIC Securities said that Longfor’s debt structure has already improved significantly. The company’s strategy to strengthen its operating and services business capabilities and drive earnings growth is also the right one. The company is building a new development model grounded in operations and services—that is, lowering the share of its development business and raising the share of its operations and services business. A substantial portion of the company’s asset base is no longer value-volatile residential property, but instead operating real estate and service-type assets with stable, predictable cash flows. After delivering 7.9 billion yuan of profit from core equity interests in operations and services in 2025, the company further expanded the footprint of assets it holds, laying the foundation for further reducing reliance on the development business.