Core Viewpoint - Shenzhen Holdings Limited reported a significant increase in sales amid a challenging real estate market, but its profitability continues to decline, leading to a paradoxical situation [1][2]. Sales Performance - Total contract sales for the first three quarters reached 9.838 billion yuan, a year-on-year increase of 24% [1]. - The sales volume for the third quarter alone was 3.025 billion yuan, with a sales area of 128,700 square meters [1]. - During the "Golden Week" holiday, several projects achieved top sales in their respective areas, with the Shanghai Jiading project achieving an 80% sales rate on the first day of opening [1]. Pricing and Profitability - Despite a 36.3% year-on-year increase in sales area to 428,200 square meters, the average selling price dropped from 25,300 yuan per square meter to 23,000 yuan, a decline of 9% [1]. - The gross profit margin for the real estate development business in the first half of 2025 was 13.8%, down 18 percentage points from the previous year, significantly exceeding the industry average decline [1]. Financial Overview - Total revenue for the first three quarters was 24.445 billion yuan, with an operating profit of 161 million yuan and a net loss of 848 million yuan [2]. - The company reported a 175% year-on-year increase in revenue for the first half of 2025, amounting to 10.35 billion HKD, but faced a gross profit margin decline of approximately 12 percentage points [2]. Asset Management and Inventory - The company has seen positive changes in its asset management, with several key projects successfully delivered, leading to a reduction in inventory by approximately 15.1 billion yuan to 81.904 billion yuan [3]. - Contract liabilities also decreased by about 11.5 billion yuan, indicating improved asset turnover efficiency [3]. Debt Management - As of the end of the third quarter of 2025, the total liabilities of the parent company were 143.987 billion yuan, a year-on-year decrease of 6.26%, with current liabilities down by 24% [3]. Financing and Business Expansion - Recently, the company secured a three-year loan of 4 billion HKD [4]. - The company is expanding its urban comprehensive operation business, taking on projects such as the Shenzhen Library North Pavilion and several hospitals in Anhui and Henan [4]. Commercial Real Estate Development - The community commercial project "Shen Ye Shi Ji" has been initiated, with an expected opening in 2026, and the TOD complex at Chegongmiao is in substantial development [4]. - The company is also focusing on technology industry investments, with a 25% year-on-year increase in electronic shipments and a 160% increase in agricultural product sales driven by the pig supply chain [4]. Strategic Shift - Shenzhen Holdings is moving towards a strategic focus on real estate asset management and comprehensive operation services, as evidenced by the planned sale of 70% of its stake in Jinghua Electronics [4]. - However, market reactions have been negative, as seen by the significant drop in stock price following the announcement of the acquisition [4]. Challenges Ahead - The company faces challenges in the commercial real estate sector, where its revenue contribution remains relatively small compared to real estate development [5]. - The overall path for Shenzhen Holdings is expected to be difficult during the industry's deep adjustment period, with a focus on restoring profitability and managing debt risks being crucial for navigating through the cycle [5].