The "Model" of China Merchants Shekou in the Stock Era: 86.1 Billion Yuan Balance Support, Three Major Business Segments Collaborate to Steady Progress and Achieve Long-term Development

Ask AI · With the policy shift towards good housing, how will China Merchants Shekou lead the industry’s transformation?

The Chinese real estate sector is experiencing a different atmosphere this spring compared to previous years. With the 2026 government work report setting the main tone of “focusing on stabilizing the real estate market” for the entire year, the focus of industry policy is gradually shifting from the stage of clearing existing risks centered around “ensuring delivery and preventing risks” to a new cycle of value creation and structural optimization led by “good housing and new models.”

Against this backdrop, China Merchants Shekou (001979.SZ), with its robust business strategy and forward-looking strategic layout, has delivered a report to the market showcasing its resilience and determination to transform. The annual report released on March 16 shows that the company achieved operating revenue of 154.728 billion yuan and a net profit attributable to shareholders of 1.024 billion yuan; the total contract sales amount reached 196.009 billion yuan, elevating the company’s industry ranking to fourth place. In the face of a complex external environment, the company not only solidified the foundation of its development business but also made significant breakthroughs in asset operation, property services, and financial stability, continuously leading the high-quality transformation track of the real estate sector.

Stability First, Demonstrating Resilience Through Cycles

In the context of a deep adjustment in the industry, prudent management has become the core competitiveness for real estate companies to navigate through cycles. In 2025, China Merchants Shekou consistently adhered to prudent financial principles, establishing a comprehensive risk control system, with its “three red lines” remaining in the green category for a long time. The asset-liability ratio, excluding pre-receivables, stands at 64.17%, the net debt ratio at 72.46%, and the cash short-term debt ratio at 1.19, with core financial indicators consistently within the industry’s optimal range, becoming a “ballast” for market confidence.

On the capital operation front, the company leveraged the credit advantages of state-owned enterprises to create a diversified low-cost financing system, with the comprehensive funding cost at year-end dropping to 2.74%, down 25 basis points from the beginning of the year, ranking among the lowest in the industry; it completed the full clearance of 12 billion yuan in perpetual bonds and secured 14.1 billion yuan in operating property loans, continuously optimizing its debt structure. By the end of 2025, the company’s cash balance reached 86.127 billion yuan, and its net cash flow from operating activities was 9.693 billion yuan, providing solid support for the company’s business transformation and stable development with ample cash flow.

At the same time as the financial report was released, China Merchants Shekou announced that the company and its subsidiaries plan to use a total amount not exceeding 10 billion yuan of temporarily idle self-owned funds to carry out entrusted wealth management at financial institutions other than China Merchants Bank. The investment focuses on wealth management products with high safety, good liquidity, and relatively attractive returns, with funds sourced from temporarily idle self-owned funds of the company and its subsidiaries, balancing the safety and profitability of the funds.

In terms of performance, facing the industry’s challenges of declining turnover scale and fluctuating investment returns, China Merchants Shekou achieved operating revenue of 154.728 billion yuan for the year, solidifying its scale foundation; the net profit attributable to shareholders was 1.024 billion yuan, successfully achieving a profitable closure in an environment where the industry is generally under pressure. In terms of regional layout, the company focuses on deepening its presence in core cities, with revenue in the northern region increasing by 10.44% year-on-year, and the resilience of core urban agglomerations continues to stand out, showcasing the unique advantages of state-owned enterprises navigating through industry cycles.

With favorable policies being continuously released in 2025, China Merchants Shekou accurately grasped the policy direction of “stabilizing real estate,” strictly implementing the strategies of “investing based on sales and producing based on sales,” successfully acquiring 43 high-quality land parcels throughout the year, with the investment in the top 10 core cities accounting for nearly 90%, of which the investment in first-tier cities reached 63%, securing high-quality resources in high-energy cities like Shanghai, Shenzhen, and Beijing, providing ample momentum for the company’s subsequent sustainable development.

The recently discussed “Document No. 38” is highly aligned with the development direction of China Merchants Shekou, which holds substantial core area resources, and is expected to further strengthen its development barriers. The document clearly states: “Newly constructed land will prioritize major project construction and the development of people’s livelihood projects, and will not be used for commercial real estate development in principle.” This direction sends a key signal — land supply will shift from incremental expansion to revitalization and structural optimization of existing stock, marking the formal entry of the industry into a new stage of improving the quality of existing stock.

Collaborative Efficiency, Three Main Businesses Working Together

Based on the three core sectors of “development business, asset operation, and property services,” China Merchants Shekou continues to deepen the implementation of its “133341” strategy, transforming the three businesses from “individual efforts” to “collaborative win-win” and constructing a full industry chain ecological system of quality improvement in development, value-added operation, and service expansion, opening up a new growth curve amid the industry transformation wave.

As the core foundation for the company’s development, China Merchants Shekou’s development business adheres to the national standard of “good housing,” creating the industry’s first complete technical system that meets the “safe, comfortable, green, and smart” requirements, covering 7 major dimensions, 28 modules, and 485 technical details, which have been scaled up in over 20 benchmark projects, winning significant industry honors such as “Top 3 Good Housing Enterprises in China” and “Top 4 Product Power.”

The solid product strength supports impressive sales performance, as in 2025 the company achieved a signed sales amount of 196.009 billion yuan and a sales area of 7.1612 million square meters, steadily improving its industry ranking to fourth place, with sales in 10 core cities including Shanghai, Shenzhen, and Chengdu successfully ranking among the top three locally. Meanwhile, the commissioned construction business continues to lead the industry, with 80 new commissioned projects added throughout the year, a signed area of 11.39 million square meters, and contract revenue exceeding 800 million yuan; to date, the company has undertaken over 620 commissioned projects, with a scale exceeding 35 million square meters, firmly maintaining its position in the industry’s top 10.

The asset operation business continues to promote quality improvement and efficiency across all formats, with income from properties held under management reaching 7.63 billion yuan in 2025, a year-on-year increase of 2.2%. Six major formats — commercial, apartments, industrial parks, hotels, exhibitions, and cruises — collaborated to launch 29 new market projects throughout the year, totaling a construction area of 1.77 million square meters, with an additional 828,000 square meters in light asset management area; core format occupancy rates remain high, with a 93% occupancy rate for commercial properties over three years old, a 93% occupancy rate for boutique apartments, and an 88% occupancy rate for industrial parks.

Notably, China Merchants Shekou leverages public REITs to connect the entire chain of “investment-financing-construction-management-exit,” launching an expansion of the Bosera Shekou Industrial Park REIT at the capital operation level, continuously releasing the value of existing assets. Additionally, the company seizes opportunities in developing new productivity, laying out in the low-altitude economy sector, and creating a low-altitude economy pilot zone in Qianhai-Shekou, successfully attracting quality enterprises in the zero-gravity aircraft industry chain; the cruise and exhibition business experienced counter-cyclical growth, serving 4.198 million passengers throughout the year and hosting exhibitions covering over 7 million square meters, becoming a new engine for the asset operation business.

Under its subsidiary China Merchants Jiyu, the company adheres to a “lightweight, large-scale, and technology-driven” development approach, achieving operating revenue of 19.273 billion yuan in 2025, a year-on-year increase of 12.23%; to date, the number of managed projects has reached 2,473, with a managed area of 377 million square meters, firmly ranking among the top three in comprehensive strength of property services in China. The effectiveness of market-based expansion has been particularly significant, with the annual contract amount signed with third parties reaching 4.169 billion yuan in 2025, a year-on-year increase of 13%, of which the growth rates for non-residential formats such as aviation, universities, and IFM exceeded 15%, and the contract amount for residential formats increased by 60% year-on-year, completely breaking away from dependence on the parent company and achieving independent high-quality development.

Moving Forward, Strategic Layout for the Long Term

In the face of the new development trend of “stabilizing and reconstructing the model” in the real estate industry in 2026, China Merchants Shekou, guided by the “14th Five-Year Plan” strategic blueprint, is firmly promoting three major transformations: from a focus on development to a balance of development and operation, from a focus on heavy assets to a combination of light and heavy assets, and from homogeneous competition to differentiated development, accelerating its shift towards a “developer + operator + service provider” triad.

To inject new momentum into development, the company is driving innovation through dual wheels of digital intelligence and green development, continuously strengthening its core competitiveness. In the area of digital intelligence, the company has deeply integrated AI technology into core business scenarios such as marketing, property management, and customer research, with the AI property work order assistant improving efficiency by 90%, and smart name tags enhancing customer interaction efficiency by 30%-70%; at the same time, the company has developed the “Jiyu Service” and “Jiyu On-the-Go” native applications on HarmonyOS, successfully capturing the entry point of the domestic system ecosystem. In terms of green development, the company continues to lead the industry, with new prefabricated construction area reaching 2.344 million square meters for the year, accounting for 92.3%; 35 new green building certification projects were added, maintaining an MSCI ESG rating of A, the highest level in the A-share real estate sector.

In the areas of district development and urban integration, the company continues to upgrade its layout, fully demonstrating the responsibilities of a state-owned enterprise. Leveraging 47 years of development experience in Shekou, the company centers on an integrated model of “port area and city” and will officially launch the quality upgrade work in the Shekou area in 2026, striving to create a new landmark for the new era of reform and opening up. Meanwhile, the company is deeply engaged in national strategic areas such as the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan Free Trade Zone, holding substantial high-quality land resources in core areas like Qianhai and Prince Bay, with land value steadily being released.

Upholding the philosophy of coexisting and thriving with responsibility and value, the company continues to improve its market value management and valuation enhancement system, solidly implementing the “dual enhancement of quality and returns” action, with a prudent dividend plan to reward shareholders, proposing a cash distribution of 0.511 yuan for every 10 shares in 2025; on the social responsibility front, the China Merchants C Star Youth Innovation and Entrepreneurship Program was successfully selected as a boutique activity for the “Year of China-Africa Cultural Exchange,” with the company taking practical actions to fulfill its mission as a state-owned enterprise and convey its sense of responsibility.

Combining China Merchants Shekou’s previously released performance forecast, multiple brokerages have given positive evaluations of its development prospects. Among them, Dongwu Securities pointed out that against the backdrop of continued policy efforts and gradually balancing supply-demand relationships in the industry, as a leading state-owned real estate enterprise, China Merchants Shekou is expected to benefit first in the process of industry stabilization and recovery due to its outstanding resource endowment and solid credit advantages, maintaining a steady investment-sales rhythm.