Core Viewpoint - Poly Developments anticipates a significant decline in net profit for 2025, projecting a net profit of 1.026 billion yuan, a year-on-year decrease of 79.49% [1] Group 1: Financial Performance - The company expects a net profit attributable to shareholders of 1.026 billion yuan for 2025, down 79.49% year-on-year [1] - The net profit after deducting non-recurring gains and losses is projected to be 628 million yuan, a decrease of 85.25% year-on-year [1] - Excluding impairment impacts, the operating net profit attributable to shareholders is estimated at 5.2 billion yuan, with the fourth quarter contributing approximately 3.3 billion yuan [1] Group 2: Strategic Actions - Poly Developments has actively implemented inventory reduction strategies, which, while pressuring short-term profits, help avoid systemic risks and facilitate structural adjustments [1] - The company maintains a leading expansion scale, with total expansion amount exceeding 79 billion yuan in 2025 and cumulative expansion exceeding 390 billion yuan from 2022 to 2024 [1] Group 3: Market Position and Financial Health - The company achieved a total sales amount of 253 billion yuan in 2025, ranking first in the industry for three consecutive years [2] - The asset-liability ratio has decreased for four consecutive years, reaching 73% as of September 2025, down approximately 5 percentage points from its peak [2] - As of September 30, 2025, the company had a cash balance of 122.646 billion yuan [2]

Core Viewpoint - The performance of real estate companies is expected to stabilize as they navigate through the current market challenges, with a focus on asset impairment provisions and strategic investments in long-cycle industries [2][3][4]. Group 1: Company Performance - Poly Developments announced a projected revenue of approximately 308.26 billion yuan for 2025, a year-on-year decrease of 1.09%, with a net profit attributable to shareholders of about 1.03 billion yuan, reflecting a decline compared to 2024 [2][4]. - The company plans to recognize asset impairment and credit impairment losses totaling approximately 6.9 billion yuan, which is expected to reduce the net profit for 2025 by about 4.2 billion yuan [4]. - Excluding the impact of impairment provisions, Poly Developments' net profit for 2025 is estimated to be around 5.2 billion yuan, with the fourth quarter contributing approximately 3.3 billion yuan [4]. Group 2: Industry Trends - The real estate sector is experiencing a cautious yet orderly expansion in investment, with companies exploring new revenue streams beyond traditional real estate development, such as entering long-cycle industries and enhancing service offerings [3][6]. - The top 100 real estate companies are projected to have a total land acquisition amount of 964 billion yuan in 2025, representing a year-on-year increase of 3.9%, driven by favorable policies and the need for sustainable development [5]. - The industry is expected to enter a new development phase in 2026, as many companies have passed the peak of delivery and debt repayment, indicating a potential for recovery and stabilization in performance [2][8]. Group 3: Future Outlook - Real estate companies are increasingly focusing on property operations and other sectors, with many adopting strategies to enhance their operational efficiency and capitalize on the growing REITs market [6][7]. - Companies like China Resources Land and China Merchants Shekou are also expanding their presence in property operations, with significant growth in recurring income and rental revenues [6]. - The market conditions are improving, with expectations for a recovery in 2026, as companies work towards repairing their balance sheets and potentially achieving profitability [8].

Core Viewpoint - The real estate industry is expected to stabilize as companies navigate through the current market challenges and explore new growth avenues, with major players like Poly Developments taking significant steps to adjust their strategies and financials [2][3][6]. Group 1: Company Performance - Poly Developments reported an estimated revenue of approximately 308.26 billion yuan for 2025, reflecting a year-on-year decrease of 1.09%, with a projected net profit attributable to shareholders of about 1.03 billion yuan, a decline compared to 2024 [2][3]. - The company plans to recognize asset impairment and credit impairment losses totaling around 6.9 billion yuan, which is expected to reduce the net profit for 2025 by approximately 4.2 billion yuan [3][4]. - Excluding the impact of impairment provisions, Poly Developments' net profit for 2025 is estimated to be around 5.2 billion yuan, with the fourth quarter contributing approximately 3.3 billion yuan [4]. Group 2: Industry Trends - The real estate sector is witnessing a cautious yet orderly expansion in investments, with companies focusing on stabilizing their operations and gradually reducing the impact of impairment provisions [2][3]. - The top 100 real estate companies in China are projected to have a total land acquisition amount of 964 billion yuan in 2025, marking a year-on-year increase of 3.9% [4]. - The market is expected to see a recovery in 2026 as companies navigate through the peak of delivery and debt repayment, entering a new development phase [2][6]. Group 3: Strategic Shifts - Many leading real estate firms are diversifying into long-cycle industries and real estate operations, with plans to invest in high-tech sectors and enhance service offerings [3][5]. - Poly Developments has expanded its operational assets to 5.73 million square meters, including 26,000 rental housing units, which increased by 18% compared to the end of 2024 [5]. - Other companies like China Resources Land and China Merchants Shekou are also pursuing similar strategies in real estate operations and indirect investments through industry funds [5].

Core Viewpoint - The photovoltaic and real estate industries are experiencing significant losses, with the real estate sector facing even more severe challenges as many companies, including state-owned enterprises, are projected to report substantial losses in 2025 [1][5]. Summary by Sections Photovoltaic Industry Losses - Tongwei Co. is expected to report a loss of 9 to 10 billion yuan, TCL Zhonghuan is projected to lose 9.2 to 9.6 billion yuan, LONGi Green Energy is expected to lose 6 to 6.5 billion yuan, and JA Solar is projected to lose 4.5 to 4.8 billion yuan in 2025 [1]. Real Estate Industry Losses - As of January 19, 2026, 22 A-share listed real estate companies have released their 2025 performance forecasts, with only Poly Development expected to be profitable, while the other 21 companies are projected to incur losses [1][3]. - Poly Development anticipates a net profit of 1.026 billion yuan in 2025, a significant decrease of 79.49% compared to 2024, despite a slight revenue decline of 1.09% [4]. Major Losses Among Real Estate Companies - China Fortune Land Development and Greenland Holdings are expected to report losses exceeding 10 billion yuan, with China Fortune Land Development projected to lose between 16 to 24 billion yuan and Greenland Holdings expected to lose between 16 to 19 billion yuan [6][7]. - Other companies such as Beichen Industrial, Guangming Real Estate, and Jingtou Development are also expected to report losses exceeding 1 billion yuan [7]. Shift from Profit to Loss - Companies like Huafa Holdings and Tibet Urban Investment, which were profitable in 2024, are projected to report losses in 2025, marking a significant shift in their financial performance [8]. - The overall trend indicates that many companies are facing unprecedented challenges, with some experiencing their first losses in decades [1][8]. Market Conditions and Profitability - The decline in profitability across the real estate sector is attributed to a prolonged downturn in housing prices, leading to asset impairment and reduced profit margins [15][16]. - The average gross margin for major real estate companies has decreased significantly, with some companies reporting net profit margins as low as 2.27% [16]. Broader Implications - The losses are not confined to private enterprises; state-owned and central enterprises are also affected, indicating a systemic issue within the real estate market [17]. - The perception of the real estate industry as a high-profit sector is changing, as many companies are now struggling to maintain profitability amid challenging market conditions [16][17].

Core Viewpoint - The rental and sales rights concept has seen a rise of 1.75%, ranking sixth among concept sectors, with significant gains from stocks like Chengdu Investment Holdings and Hefei Urban Construction, which hit the daily limit [1][2]. Group 1: Market Performance - The rental and sales rights concept had 18 stocks rising, with notable increases from Chengdu Investment Holdings (10.11%), Hefei Urban Construction (10.03%), and *ST Nan Zhi (5.14%) [1][3]. - The top gainers in the sector included China Merchants Shekou (7.35%), I Love My Home (7.33%), and Huitong Energy (4.99%) [1][2]. - Conversely, the biggest decliners were *ST Yang Guang (-4.91%), Shoukai Co. (-4.72%), and Yueshin Health (-2.68%) [1][2]. Group 2: Capital Flow - The rental and sales rights concept attracted a net inflow of 694 million yuan, with 15 stocks receiving net inflows, and five stocks exceeding 100 million yuan [2][3]. - Hefei Urban Construction led the net inflow with 277 million yuan, followed by I Love My Home (233 million yuan) and Poly Development (165 million yuan) [2][3]. - The net inflow ratios for leading stocks were Chengdu Investment Holdings (28.37%), Hefei Urban Construction (24.03%), and *ST Nan Zhi (20.17%) [3][4].

Market Overview - The Shanghai Composite Index fell by 0.01% on January 20, with 20 industries experiencing gains, led by the oil and petrochemical sector and building materials, which rose by 1.74% and 1.71% respectively. The real estate sector ranked third in terms of gains [2] - The telecommunications and defense industries saw the largest declines, with drops of 3.23% and 2.87% respectively [2] Capital Flow Analysis - The net outflow of capital from the two markets reached 95.72 billion yuan, with 11 industries experiencing net inflows. The banking sector led with a net inflow of 1.47 billion yuan and a daily increase of 0.80%. The real estate sector followed with a daily increase of 1.55% and a net inflow of 627 million yuan [2] - The industries with the largest net outflows included the power equipment sector, which saw a net outflow of 19.05 billion yuan, and the electronics sector, with a net outflow of 18.39 billion yuan. Other sectors with significant outflows included telecommunications, defense, and computers [2] Real Estate Sector Performance - The real estate sector increased by 1.55%, with a total net inflow of 627 million yuan. Out of 100 stocks in this sector, 76 rose, including 5 that hit the daily limit, while 21 fell, with 3 hitting the lower limit. A total of 55 stocks experienced net inflows, with 6 stocks seeing inflows exceeding 100 million yuan [3] - The top stocks by net inflow included Hefei Urban Construction with 277 million yuan, followed by Wo Ai Wo Jia and Poly Development with inflows of 233 million yuan and 165 million yuan respectively [3] Top Gainers in Real Estate Sector | Code | Name | Daily Change (%) | Turnover Rate (%) | Main Capital Flow (10,000 yuan) | | --- | --- | --- | --- | --- | | 002208 | Hefei Urban Construction | 10.03 | 9.23 | 27662.79 | | 000560 | Wo Ai Wo Jia | 7.33 | 27.70 | 23316.23 | | 600048 | Poly Development | 4.31 | 3.51 | 16473.16 | | 600649 | Urban Investment Holdings | 10.11 | 3.58 | 12810.67 | | 600675 | China Enterprises | 10.14 | 3.22 | 12651.12 | | 000002 | Vanke A | 1.27 | 2.16 | 10971.52 | | 600266 | Urban Construction Development | 2.32 | 14.86 | 7311.35 | | 000031 | Dayue City | 10.17 | 1.54 | 6907.80 | | 000514 | Chongqing Development | 5.72 | 8.90 | 5353.57 | | 600383 | Jindi Group | 2.93 | 2.92 | 5332.09 [4] Top Losers in Real Estate Sector | Code | Name | Daily Change (%) | Turnover Rate (%) | Main Capital Flow (10,000 yuan) | | --- | --- | --- | --- | --- | | 000036 | Hualian Holdings | -9.95 | 7.38 | -21128.16 | | 600376 | Shoukai Shares | -4.72 | 5.10 | -12971.76 | | 600340 | Huaxia Happiness | -9.88 | 9.08 | -11362.09 | | 600641 | Xian Dao Ji Dian | -4.20 | 6.73 | -10618.38 | | 600895 | Zhangjiang High-Tech | -0.87 | 2.68 | -10515.38 | | 000620 | Yingxin Development | 0.56 | 15.70 | -9666.43 | | 600246 | Wantong Development | -2.20 | 5.83 | -7825.24 | | 600515 | Hainan Airport | -1.88 | 1.83 | -7275.72 | | 600658 | Electronic City | -3.90 | 3.94 | -2817.30 | | 600173 | Wolong New Energy | -5.05 | 3.51 | -2327.00 [6]

Group 1 - The real estate sector is experiencing significant activity, with stocks such as Dayue City, Chengdu Investment Holdings, and others reaching their daily limit up, while real estate ETFs have seen gains of over 3% [1] - The real estate ETFs tracking the CSI All Share Real Estate Index include major companies like China Merchants Shekou, Poly Developments, and Vanke A, indicating a concentration of top-tier firms in the investment direction [5] - The recent data from the National Bureau of Statistics shows a slight decline in new residential sales prices in first-tier cities, with a 0.3% decrease month-on-month, while second and third-tier cities also experienced price drops [5] Group 2 - According to Everbright Securities, the implementation of real estate policies is enhancing local government autonomy in market regulation, leading to further regional and city differentiation [6] - Huayuan Securities anticipates that the real estate adjustment cycle may be nearing its end, with historical data suggesting that the current price adjustments in China are relatively sufficient [7] - The trend towards "good housing" is emerging, with a shift in policy focus towards building safe, comfortable, and green homes, indicating potential growth in the high-quality residential market [7]

Core Viewpoint - The real estate sector continues to face widespread losses, with most listed companies in the A-share market reporting varying degrees of deficit for 2025, except for the leading company, Poly Developments [2][3]. Group 1: Company Performance - Among the 27 listed real estate companies that have released performance forecasts, only Poly Developments reported a positive net profit of approximately 1.03 billion yuan, while the total losses of the other companies ranged from 47.546 billion to 62.464 billion yuan [3]. - Poly Developments experienced a revenue decline of 1.09% year-on-year, with a net profit drop of 79.49% due to decreased gross profit margins and anticipated asset impairment losses of about 6.9 billion yuan [3]. - Other companies, such as China Fortune Land Development, are projected to incur losses of 16 billion to 24 billion yuan for 2025, with net assets expected to decline by 10 billion to 15 billion yuan [4]. Group 2: Industry Challenges - The real estate sector has been struggling with significant losses since 2022, attributed to factors such as low-profit project settlements, increased impairment provisions, and rising interest expenses [6]. - The sales volume of commercial housing is expected to decline by 12.6% year-on-year in 2025, indicating ongoing market challenges [7]. - The real estate development prosperity index has been on a downward trend, reaching 91.45 by December 2025, reflecting a sluggish economic activity in the sector [7]. Group 3: Future Outlook - Analysts suggest that the adjustment cycle in the real estate market may be nearing its end by 2026, with potential growth in the high-quality residential market driven by policy support and demand structure upgrades [8]. - Companies facing significant losses must manage their market value and ensure compliance with financial reporting to avoid delisting risks, which could arise from continuous losses or failure to meet revenue thresholds [9].

Investment Rating - The report assigns an "Overweight" rating for the real estate sector [4]. Core Insights - The report highlights that the rental yield in major cities has shifted from a negative outlook to a neutral stance due to the CPI turning positive and the continuous decline in risk-free rates. This indicates potential stabilization in asset prices in key cities [2]. - The rental yield in first-tier cities has increased from 1.6% in 2020 to 1.9% in 2025, although it remains below the mortgage loan rates and slightly above the risk-free rates. The "rental yield + CPI" metric is expected to improve as the CPI in some first-tier cities turns positive [4]. - Second-tier cities are showing signs of price stabilization, with the "rental yield + CPI" metric improving from 2.3% in 2023 to 2.6% in 2024 and maintaining that level in 2025. Cities like Hefei and Xi'an are expected to see further improvements in their rental yields [4]. Summary by Sections Rental Yield Analysis - The historical rental yield was 1.5%, but when adjusted for CPI, it is not considered low. The report emphasizes the need to differentiate between actual and nominal yields [4]. - The nominal rental yield is adjusted to account for potential inflation, making it a more comparable metric. The report suggests that the high inflation period has made the first-tier cities' rental yield of 1.5% equivalent to an international nominal yield of 3.5% [4]. Market Trends - The report notes that the rental yield plus CPI in first-tier cities is around 2.5%, which is now higher than the risk-free rate. This indicates a potential shift in market dynamics [5]. - The report also points out that the proportion of declining listing prices has increased, indicating a weakening in the second-hand housing market, with about 19% of listings showing price declines [4][18]. Future Outlook - The report anticipates that as the CPI continues to rise and the risk-free rate declines, asset prices in key cities may transition from a negative outlook to a neutral one. This is particularly relevant for second-tier cities, which are expected to have a stronger rental yield plus CPI metric [4].

Market Overview - A-shares opened high but closed lower, with the Shanghai Composite Index down 0.3% at 4101.62 points, Shenzhen Component down 1.22%, and ChiNext Index down 1.83% [1] - The total trading volume in the Shanghai and Shenzhen markets reached 1.85 trillion yuan, an increase of 568 billion yuan compared to the previous trading day [2] Sector Performance - The communication equipment, aerospace military, electronic components, basic metals, and energy equipment sectors experienced significant declines [2] - The banking and insurance sectors saw a notable rise, with food and beverage, real estate, and semiconductor sectors also performing well [2] Banking and Insurance Sector - The banking and insurance sector showed resilience, with major insurance stocks like China Life and Ping An rising over 1% [3] - Key banking stocks such as CITIC Bank increased by over 2%, while other banks like China Construction Bank and Bank of China rose by over 1% [5] - A report from China Galaxy Securities indicated that structural monetary policy tools and a marginal improvement in RMB credit could support bank lending [5] Food and Beverage Sector - The food and beverage sector was active, with food processing stocks leading the gains, including Hongmian Co., Jingji Zhino, and Weizhi Xiang, all hitting the daily limit [6] - Notable performers included Hongmian Co. with a 10.13% increase and Jingji Zhino with a 10.01% increase [7] Real Estate Sector - The real estate sector showed a rebound, with stocks like Dayue City and Chengtou Holdings hitting the daily limit, and others like China Merchants Shekou and Binjiang Group rising over 5% [8] - Recent data from the National Bureau of Statistics indicated a slight decrease in new residential sales prices in first-tier cities, which may influence market sentiment [10] Aerospace and Military Sector - The aerospace and military sector faced significant declines, with stocks like Tongyu Communication and Aerospace Power hitting the daily limit down, and Aerospace Hongtu dropping 13% [11] - Other companies in the sector, such as China Satellite and China Aerospace, also saw declines exceeding 6% [12]