Completely eliminate the "three highs"! China Resources Land's three growth curves unlock new valuation potential

Ask AI · How does China Resources Land achieve high-quality growth through three growth curves?

Produced by | Zhongfangwang

Reviewed by | Li Xiaoyan

On March 30, China Resources Land held its 2025 online performance conference, with the entire senior management team including Chairman Li Xin and President Xu Rong appearing, officially releasing the “14th Five-Year” strategic blueprint: leveraging three growth curves to work together, completely breaking away from the traditional path of “high leverage, high debt, high turnover,” and forging a new path of high-quality, sustainable development during the industry’s deep adjustment period. Although core net profit in 2025 is expected to decline by 11.4% year-on-year, the company’s operational business grew against the trend, gross profit margin recovery path is clear, and land reserve structure continues to optimize, demonstrating strong resilience and strategic resolve through cycles.

In 2025, China Resources Land achieved operating revenue of 281.44 billion yuan, a slight increase of 0.9% year-on-year; attributable net profit to shareholders was 25.42 billion yuan, a slight decrease of 0.5%; core net profit was 22.48 billion yuan, down 11.4% year-on-year. Against the backdrop of industry-wide pressure and most real estate companies experiencing declines in both revenue and profit, this performance still outperformed the market, reflecting the稳健底色 of leading state-owned enterprises.

Development and sales business, as the fundamental performance driver, achieved a signed sales amount of 233.6B yuan, with a signed area of 9.22 million square meters, maintaining a top-three industry scale. Among them, sales in first-tier cities accounted for 45%, an increase of 7 percentage points year-on-year; the company ranked first in five cities and among the top three in 13 cities, with significant results from the high-tier city strategy. On the settlement side, the development business realized settlement income of 238.2B yuan, with an average settlement price of 24,599 yuan per square meter, up 10.5% year-on-year. However, affected by industry downturn and rising land costs, the settlement gross profit margin fell to 15.5%, dragging down overall profit performance.

Notably, the core profit growth engine has shifted to the recurring business centered on leasing operational real estate and light asset management fees. This sector achieved revenue of 43.28B yuan for the year, with a core net profit of 11.65B yuan, accounting for 51.8% of total core net profit, surpassing the development and sales business for the first time. Among them, rental income from operational real estate was 25.44B yuan, up 9.2% year-on-year, with a gross margin of 71.8%, an increase of 1.8 percentage points; light asset management fees had a gross margin of 35.5%, up 2.5 percentage points, jointly forming a stable profit and cash flow foundation.

At the performance conference, Li Xin clearly stated that during the “14th Five-Year” period, China Resources Land will build a new pattern of coordinated development across three growth curves, marking the company’s complete departure from reliance on “three highs” and shifting to a diversified high-quality development model driven by “development + operation + services.”

First curve: Development and sales business, the “ballast stone” for quality improvement and efficiency enhancement. The company will focus on the “single project efficiency era,” centering on “improving quality and maintaining profits,” deeply cultivating first- and strong second-tier cities, and exploring value depressions supported by industry to ensure “doing one and one.” By 2025, the company plans to activate land reserves of about 25 billion yuan through special bonds, land exchanges, and equity exits, continuously optimizing land reserve structure; it will acquire 33 projects, with equity investments of 67.37 billion yuan, with nearly 80% invested in five core cities. By the end of the year, the company’s salable resources are about 450 billion yuan, with 92% in first- and second-tier cities, providing a solid foundation for stable sales.

Second curve: Operational real estate leasing, the “main engine” for stable growth. This sector has become China Resources Land’s most competitive segment. In 2025, its retail sales from shopping centers reached 239.2 billion yuan, up 22.4% year-on-year, outperforming the national retail sales growth; the company operates 98 shopping centers, with a leasing rate of 97.4%, and the effect of commercial landmarks in core cities continues to expand. Going forward, the company will continue to expand its commercial footprint, strengthen the “Vientiane” brand advantage, and expect revenue to remain above 30 billion yuan by the end of the “14th Five-Year,” with profit accounting for nearly 50%.

Third curve: Light asset management fee business, the “creator” of space value. Centered on property and commercial operation management, this business leverages its light asset and high gross profit characteristics to become a new growth frontier. In 2025, Vientiane Life achieved revenue of 18.02B yuan, with a core net profit of 3.95 billion yuan, up 13.7% year-on-year. During the “14th Five-Year,” the company will rely on its brand and operational advantages to expand third-party management scale, with expected revenue surpassing 20 billion yuan and profit accounting for 10%-15%.

Regarding market concerns about gross profit margin, CFO Zhao Wei provided a clear recovery path: overall gross profit margin is expected to increase by more than 3 percentage points based on the current level, without relying on a single business. Specifically, first, the development business will aim to improve gross profit margin by 2 percentage points through precise investment and product upgrades; second, strengthen the advantages of real estate sales, maintaining double-digit growth, and keep digital business gross margin above 70%; third, the three growth curves will work together to keep overall gross profit margin above 25%.

On industry trends, COO Chen Wei believes that the most difficult period in the industry has passed, and it has officially entered a cycle of bottoming out, recovery, and deep differentiation: core cities and high-quality sectors are stabilizing first, while other cities are gradually digesting inventory. Data from the first three weeks of March 2026 show that new home transactions are increasing month-on-month, and second-hand housing transactions have significantly rebounded both month-on-month and year-on-year, indicating structural market recovery. Li Xin admits that development business will still face pressure in 2026-2027, but with improved investment quality and the realization of “doing one and one,” incremental growth will drive the business to stabilize and rebound.

Looking ahead to the “15th Five-Year,” China Resources Land has set clear performance guidance: development and sales revenue will maintain between 200 billion and 250 billion yuan, accounting for 70%-75% of total revenue, with nearly 40% profit contribution; operational real estate leasing revenue will exceed 30 billion yuan, accounting for about 15%, with nearly 50% profit contribution; light asset management fee revenue will exceed 20 billion yuan, with a profit share of 10%-15%. The three growth curves will work together to form a virtuous cycle of “development maintaining the basic stability, operation increasing profits, and services expanding space.”

From crossing the second growth curve in the “14th Five-Year” period to building three growth curves in the “15th Five-Year,” China Resources Land has achieved a key industry transformation with strategic foresight. As the real estate industry shifts from scale expansion to high-quality development, the company leverages its prudent finances, high-quality land reserves, and leading operational capabilities to completely break away from the “three highs” model and forge a sustainable, cycle-resistant new development path, providing a “China Resources example” for industry transformation.