Sales Climb to Industry Fourth, Cmacol's Underlying Logic Is Shifting

Source: Times Finance Author: Lin Xinhe

When the industry no longer rewards scale, profit fluctuations become a process of “squeezing out water.” The true watershed begins with whether companies can continuously create value.

During the deep adjustment cycle of the real estate sector, China Merchants Shekou (001979.SZ) has delivered a clear performance report. By 2025, the company achieved operating revenue of 154.728 billion yuan and net profit attributable to the parent of 1.024 billion yuan. Despite industry pressure, China Merchants Shekou maintained profitability and emphasized cash flow safety and stable operations. A deeper change lies in the shift of development logic.

China Merchants Shekou believes that the core competitive landscape of the real estate industry has shifted from the past “scale is king” extensive growth to high-quality development centered on products, services, and operational capabilities. The key to competition has also shifted from resource dependence and debt-driven growth to refined management, product delivery capability, and organizational resilience.

Based on this judgment, China Merchants Shekou clearly proposed during the “14th Five-Year Plan” period the path of “optimizing development, strengthening operations, expanding services, and improving risk management,” transforming from a traditional developer to a “developer + operator + service provider,” aiming to build a more sustainable value creation system.

In a sense, this financial report is not just a performance disclosure but also a self-calibration at an industry inflection point by a leading real estate enterprise: after the scale downturn, those who can traverse the cycle with more stable financial strength, more certain delivery capabilities, and verifiable product strength are more likely to gain an advantage in the next round of competition.

China Merchants Shekou 2025 Annual Performance Briefing held in Shenzhen

Fourth in sales ranking, focusing on core city strategic fulfillment

Against the backdrop of continued policy tightening, the overall Chinese real estate market in 2025 remains in a stage of adjustment and bottoming out.

Housing transaction area in 30 key cities nationwide is about 326 million square meters, down 7% year-on-year, with new home transactions down 18%, while second-hand home transactions are basically flat, further increasing their proportion to about 65%. Changes in market structure indicate the retreat of the era of incremental development and the reshaping of industry logic through stock and structural opportunities.

In this context, China Merchants Shekou still maintained relatively steady sales performance.

In 2025, the company achieved a total contracted sales area of 7.1612 million square meters and contracted sales of 196.009 billion yuan, ranking fourth in the industry.

More valuable is its urban layout—ranking in the top three in full-caliber sales in 10 cities including Shanghai, Shenzhen, Chengdu, Xi’an, Changsha, Nanjing, Zhengzhou, Suzhou, Foshan, and Nantong. Among the 30 key cities nationwide, 15 entered the local TOP 5.

Behind this achievement is the company’s ongoing “focusing on core cities” strategy, which has been gradually realized. Shanghai performed especially well, with full-caliber sales exceeding 50 billion yuan, returning to the top spot in the local market; Beijing achieved full-caliber sales of 19.3 billion yuan, entering the top five for the first time; Hangzhou reached the top four with 16.9 billion yuan, also its best historical result in the city, breaking through hard-won market share against local competitors like Binjiang and Greentown. Meanwhile, Shenzhen’s sales exceeded 15 billion yuan, ranking third; Chengdu also surpassed 10 billion yuan, ranking fifth.

Corresponding to its scale performance is the continuous strengthening of product strength.

During the reporting period, over 20 new projects nationwide achieved pre-sale clearance rates exceeding expectations. Projects such as Shanghai Kangding 19, Chengdu China Merchants X, Chengdu Jinchengxu, Changsha China Merchants Xu, and Xi’an Wutong Academy were listed among the top ten projects nationally for the year or half-year, helping the company rank fourth in “China Real Estate Enterprise Product Power TOP 100”; projects like Beijing China Merchants X and Foshan Huaxi Phase II entered the “Good Houses” TOP 20.

In terms of product system, China Merchants Shekou has been continuously upgrading product lines such as “X, Xu, Lan Yue, Tian Qing,” and systematically building the “Good House” standard around policy guidance. This system covers seven dimensions: “Worry-Free Living, Comfortable and Healthy, Green and Low-Carbon, Smart and Convenient, Exquisite Craftsmanship, Aesthetic Renewal, Thoughtful Service,” refined into 28 scenario modules and 485 technical details, and has been scaled in more than 20 benchmark projects nationwide.

As the industry shifts from scale expansion to high-quality development, China Merchants Shekou’s path is becoming clearer: anchoring on core cities, leveraging product strength, and transforming “good houses” from concepts into replicable and deliverable products through standardized and systematic capabilities.

This capability is becoming a key pillar for its cycle traversal.

Strengthening investment discipline, transforming into a “development + operation + service” model

After four consecutive years of deep adjustment, the supply-demand relationship in China’s real estate market is showing marginal improvement. New construction area has been below sales area for four consecutive years, with the new housing supply-demand ratio in 100 cities remaining below 1, and inventories gradually clearing; meanwhile, rental yields in key cities are slowly rebounding, and asset pricing logic is transitioning from “increment-driven” to “return-driven.”

In this process, demand has not disappeared but has shown more obvious structural differentiation—high-tier cities still demonstrate strong resilience, with core residential demand in first-tier and some strong second-tier cities continuing.

Based on this judgment, China Merchants Shekou continues to adopt the strategy of “focusing on core, investing based on sales, and carefully selecting” at the investment end, further strengthening investment discipline.

In 2025, the company acquired 43 land parcels, totaling about 4.4 million square meters of permissible construction area, with a total land price of about 93.8 billion yuan and equity land price of about 54.3 billion yuan, up 62% year-on-year; corresponding new value added is 125.7 billion yuan, up 85%. In terms of city structure, “Strong Heart 30 Cities” accounted for 100%, “Core 10 Cities” nearly 90%, and first-tier cities accounted for 63%, with investment resources highly concentrated in core areas.

Regarding investment decision mechanisms, China Merchants Shekou further introduced the “Six Good” review system, which evaluates projects across six dimensions: city, team, sector, turnover, product, and operation, ensuring full-process screening and control, optimizing resource allocation under cost control. The company adheres to “sales-driven investment and production,” guided by sales absorption and cash recovery, avoiding ineffective expansion and ensuring alignment with market rhythm.

By the end of 2025, the company’s total unsold land reserves were about 22 million square meters, with 47% in the “6+10” core cities, 76% in the “Strong Heart 30 Cities,” and 25% in the Guangdong-Hong Kong-Macao Greater Bay Area. In terms of property types, residential accounted for 64%, remaining the core support. The overall land reserve structure indicates a further focus on core cities and mainstream products.

It is also worth noting that the land market itself is changing.

Earlier this year, local governments began to release more core location land parcels, actively lowering starting floor prices, reducing plot ratios, and shrinking project scales. By 2025, projects with floor ratios below 2.0 accounted for 43%, a historic low. These changes are beneficial for improving product quality and turnover efficiency but also intensify competition for quality land, with some projects experiencing significant premium increases.

Against this background, China Merchants Shekou remains cautious about investments in 2026, continuing the “core city, precise investment” mainline, paying more attention to project turnover speed and yield realization, emphasizing endogenous growth and high-quality expansion.

On the supply side, the company has prepared for the next stage.

On the sales side, it continues to adopt a cautious strategy. The company expects overall sales scale in 2026 to be roughly the same as 2025, focusing more on sales quality and cash collection rather than scale expansion, aiming for precise matching of supply pace and market windows across different cities.

Overall, the market is still in the stage of “policy bottom already appeared, market bottom to be confirmed.” China Merchants Shekou maintains a short-term view of “boosting confidence” and a medium- to long-term outlook of “cautious optimism,” believing the industry will still undergo a period of bottoming and recovery.

In this context, China Merchants Shekou is accelerating its transformation from a traditional developer to a “developer + operator + service provider,” with growth in holding-type businesses directly reflecting this strategy.

In 2025, the company’s managed properties generated revenue of 7.63 billion yuan, up 2.2% year-on-year; the company added 29 new projects totaling 1.77 million square meters, including long-term rentals, commercial centers, and industrial parks. Additionally, the company increased light-asset management area by about 828,000 square meters, mainly in Shanghai, Hangzhou, Chengdu, and Shenzhen, with diversified business synergy gradually emerging.

Overall, China Merchants Shekou’s core competitiveness is becoming clearer. Relying on the long-term background of China Merchants Group, combined with clear and stable strategic execution, prudent financial management, and full-chain capabilities covering development, operation, and services, these are not easily formed in the short term nor easily replicated.

In an industry still in winter, this capability structure is becoming a fundamental support for steady progress.