China Merchants Shekou Zhu Wenkai: China Merchants Shekou is no longer a pure developer; it will continue to adhere to core city layout strategy in 2026

Everyday Economic Reporter | Chen Ronghao Everyday Economic Editor | Huang Bowen

On March 17, China Merchants Shekou held its 2025 Annual Performance Briefing and Investor Communication Meeting at its new office in Shenzhen. The new Chairman Zhu Wenkai, along with Directors and General Managers Nie Liming, Vice General Managers Wu Bin and Lü Bin, Financial Director and Board Secretary Yu Zhiliang, attended.

It was disclosed that in 2025, China Merchants Shekou achieved total operating revenue of 154.728 billion yuan, a 13.53% decrease year-over-year; net profit attributable to shareholders was 1.024 billion yuan, down 74.65%; and net profit after non-recurring gains and losses was 169 million yuan, down 93.10%. On the sales side, in 2025, the company signed contracts totaling 196.009 billion yuan with a contracted sales area of 7.1612 million square meters, maintaining a top five industry ranking.

Zhu Wenkai released key signals at the performance meeting. He stated that in 2026, the company will adhere to its core city layout strategy, focus on upgrading “good housing” products, abandon blind scale expansion, and pursue sustainable growth with quality and receivables.

Breaking out of the traditional single-track development of residential developers

In the segment discussing the company’s strategic development, Zhu Wenkai first summarized the past development of the real estate industry.

He said, “During the 14th Five-Year Plan period, the real estate industry underwent reshaping, with four fundamental changes: first, the supply and demand relationship changed significantly, with supply exceeding demand; second, the transaction pattern shifted from mainly new homes to mainly second-hand homes; third, the operating model changed from ‘high leverage, high turnover’ to ‘sales-driven investment and production’; fourth, the main entities operating in the real estate market changed.”

As the industry enters a period of adjustment, what are China Merchants Shekou’s response strategies? Where are the core competitive advantages that enable it to navigate cycles? These questions became the focus of investor attention during the meeting.

Zhu Wenkai believes that China Merchants Shekou has long since broken out of the single track of traditional residential developers. The company’s core competitive advantages are: first, the support and background of the China Merchants Group with a century-long history; second, clear and firm strategic planning and execution; third, prudent financial management; and fourth, comprehensive development capabilities across the entire chain.

He stated that these four core advantages form the development barriers of China Merchants Shekou and are the key support for the company to withstand industry fluctuations and achieve long-term steady growth.

According to Zhu Wenkai, since 2021, the company has proposed the “Three Transformations,” and has continuously shifted and transformed its strategy. During the implementation process, it also adjusts tactics dynamically based on market conditions to meet strategic requirements.

At the performance meeting, management also responded to the main reasons for the decline in the past year, stating that as the industry stabilizes, the decline will slow, and the market will enter a phase of bottoming out and recovery. Future profit pressures are expected to gradually ease.

Nie Liming mentioned that in 2025, China Merchants Shekou’s revenue decreased by 24.2 billion yuan year-over-year, and investment income from joint ventures and associates decreased by about 2.3 billion yuan. The company also recognized impairment losses exceeding 4 billion yuan during the year. “These figures reflect that, under the industry downturn, the profitability of enterprises is generally impacted.”

No fixed investment intensity is preset; in 2025, a total of 43 land parcels were acquired

In response to the current industry trend of bottoming and recovery in the real estate market, China Merchants Shekou clearly conveyed its operational outlook for 2026 during the meeting. The company will focus on core cities and product upgrades, completely abandon scale-driven growth, and emphasize “quality and receivables” as the core standards for sales growth.

Regarding the effects of housing policies, Nie Liming said that core cities have gradually optimized restrictions on purchase and loans, which has significantly boosted market confidence in the short term. For example, the “Shanghai 2.25 New Real Estate Policy” directly increased visits and contract signings in core urban areas on a month-over-month basis.

Nie Liming mentioned that the real estate industry is still in a bottoming and recovery phase. Companies need to remain cautious and optimistic. Short-term policy boosts will build confidence, but long-term market stabilization still requires time. These policies send two clear signals: first, the government’s precise city-specific regulation and control measures demonstrate unwavering determination to stabilize housing prices and the market, avoiding a “one size fits all” approach; second, a new high-quality development model for real estate is accelerating from the bottom-up, providing institutional support for stabilizing the economy and preventing industry risks, ensuring the industry’s long-term healthy development.

Another key focus in the industry is the actual layout, current situation, and future outlook of land investment and financing by leading real estate companies like China Merchants Shekou.

Management first reviewed the land market over the past year, noting that in 2025, the overall domestic land market showed a pattern of high first and then low, with a clear cooling trend. They expect 2026 to continue at low levels overall, with some localized hot spots. The management also stated that China Merchants Shekou will strictly implement the “Six Good” investment review system, focusing resources on first-tier and strong second-tier core sectors. In 2025, nearly 90% of the company’s investments were in the “core 10 cities,” with about 63% in first-tier cities, concentrating resources on first-tier and strong second-tier core areas.

Public data shows that in 2025, China Merchants Shekou acquired 43 land parcels, totaling approximately 4.4 million square meters of gross floor area, with a total land price of about 93.8 billion yuan, and a land payment of approximately 54.3 billion yuan.

“The goal during the 14th Five-Year Plan is very clear: on one hand, to digest existing inventory and gradually restore profitability; on the other hand, to promote transformation and upgrading according to the established strategy, increase returns, and achieve sustainable investment returns for investors,” the management said.