LONGFOR GROUP(HK:00960) YOUNG财经 漾财经·2025-04-25 05:44Core Viewpoint - Longfor Group has proactively adjusted its business strategy in response to market changes, focusing on reducing development activities, increasing the proportion of operational and service businesses, and deleveraging to adjust its debt structure. Despite these efforts, the company has faced significant challenges, with revenue and net profit declining over the past two years, and it is expected to continue on a downward trend in the coming years due to the sluggish real estate development business [2][5][15]. Revenue and Profit Decline - In the first three months of this year, Longfor achieved a total contract sales amount of 16.95 billion RMB, a decrease of 27.8% compared to 23.48 billion RMB in the same period last year. Monthly sales figures also showed declines of 36.4%, 4.7%, and 34.6% respectively [3]. - For the full year 2024, Longfor reported total revenue of 127.47 billion RMB, a year-on-year decline of 29.5%, and a net profit of 10.4 billion RMB, down 19.1%. The real estate development business accounted for 79% of total revenue, with a significant decline of 35.3% [4][5]. Operational and Service Business Growth - Despite the downturn in development activities, Longfor's operational and service businesses have shown growth, with operational revenue reaching 26.71 billion RMB, a year-on-year increase of 7.4%. However, the overall contribution to total revenue remains low [4][10]. - The operational business, primarily consisting of commercial investment and asset management, generated a rental income of 13.52 billion RMB, growing by only 4.5% year-on-year, with a gross profit margin of 75% [9][10]. Debt Structure and Management - Longfor has been actively reducing its debt ratio, with the asset-liability ratio decreasing from 74.81% in 2020 to 66.24% in 2023, and further down to 65.12% in the first half of 2024. The net debt ratio stood at 51.7% by the end of 2024 [12]. - The company has a total interest-bearing debt of 176.32 billion RMB, with cash on hand amounting to 49.42 billion RMB. The debt due within one year is 30.24 billion RMB, representing 17.2% of total debt [12][13]. Future Outlook - Longfor's management anticipates that the overall market decline will be limited in 2025, but there will be increased differentiation among cities and sectors, heavily influenced by policy changes and market expectations [6]. - The company aims to maintain a balanced approach between development, operations, and services, with a goal of having operational and service revenue account for half of total revenue by 2028 [11].