CSC: H1 Developer Profits Diverge, Favor Hong Kong, Commercial, Core City Players
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A research report from CITIC Securities, published on Tencent Stock via Jinwu Finance, forecasts that the overall development industry will see a 19% year-on-year decline in revenue in the first half of 2026, with a total net loss of 79.1 billion yuan, narrowing by 23.4 billion yuan from the previous year. This improvement is attributed to rising gross margins, reduced impairment losses, and lower expense ratios. The top ten most profitable firms, primarily leaders in Hong Kong, commercial, and core city development sectors, saw their aggregate net profit attributable to shareholders rise 18% year-on-year, demonstrating stronger earnings resilience. The industry's leverage remains stable, and cash flows have improved due to controlled development spending, accelerated sales collections, and asset revitalization. Top-tier developers maintain financing advantages. In the first eight months, sales declines among the top 100 developers narrowed, while investment intensity weakened. The '828 New Deal' is expected to reshape real estate fundamentals, increasing divergence in performance, financial health, sales, and investment. CITIC Securities continues to favor high-quality firms in the Hong Kong, commercial, and core city tracks.
Source report
CITIC Securities Research reports that in the first half of 2026, the overall revenue of the real estate development industry declined by 19% year-on-year, with total losses reaching RMB 79.1 billion. However, this represents a reduction in losses of RMB 23.4 billion compared to the same period last year, primarily supported by a recovery in gross margins, narrower impairment losses, and lower expense ratios.
Profit Leaders Show Resilience
The top ten most profitable real estate companies are predominantly leading players in the Hong Kong, commercial, and core city development segments. In the first half of the year, their aggregate net profit attributable to shareholders increased by 18% year-on-year, demonstrating stronger earnings resilience.
Financial Health and Cash Flow
- The overall leverage level of the industry remained stable.
- Cash flow conditions improved as developers controlled capital expenditures, accelerated sales collections, and revitalized existing assets.
- Leading real estate companies continued to benefit from financing advantages.
Sales and Investment Trends
In the first eight months, the decline in sales among the top 100 real estate companies narrowed, while investment intensity weakened. Both sales and investment concentration among the top 10 developers increased compared to the full-year figures for the previous year.
Policy Impact and Outlook
The "828 New Policy" has reshaped the foundational framework of the real estate system. CITIC Securities expects this to further widen the divergence among developers in terms of performance, financial conditions, sales, and investment. The firm continues to favor high-quality companies operating in the Hong Kong, commercial, and core city development tracks.
Source
金吾资讯Eastern
Part of this Story
China Real Estate Industry Loss Narrows in H1 2026; New Policy to Widen Developer Divergence