Fitch Ratings: Adjusts methodology for Longfor Properties (00960), gives stable outlook.

On April 27th, international credit rating agency Fitch released its latest rating report on LONGFOR GROUP, confirming Longfor's existing rating of "BB-" and adjusting the rating outlook to "Stable". Fitch stated, "The outlook adjustment reflects our view that Longfor will maintain sufficient liquidity buffer to withstand the impact of further weakening of the Chinese real estate industry, thanks to Longfor's reduced debt repayment pressure and ability to generate positive operational cash flow even in the industry downturn." As of the end of 2025, LONGFOR GROUP's interest-bearing debt was 152.81 billion RMB, a decrease of 23.51 billion RMB from the end of 2024, representing a 13% decrease. Currently, Longfor's operational cash flow, including capital expenditures, has been positive for three consecutive years, with a net inflow of 5.8 billion RMB in 2025. Fitch believes that Longfor's sufficient liquidity and prudent cash flow management will help mitigate the challenges faced by the Chinese real estate market. Entering 2026, Longfor's debt maturity pressure has significantly eased. Fitch expects that the annual credit debt maturity scale for Longfor in the next three years will decrease to 5-7 billion RMB, compared to around 20 billion RMB in the previous three years. Fitch believes that as of the end of 2025, Longfor GROUP's available cash and its track record of continuous positive operational cash flow provide sufficient liquidity buffer to cover near-term debt maturities. It is worth noting that, following Moody's, Fitch has also adjusted its rating methodology for LONGFOR GROUP from the previous China Developer methodology to the Asia-Pacific Real Estate Investment Trust (REIT) methodology, reflecting Longfor's evolving business model. In 2025, LONGFOR GROUP's operating and service business revenues and proportions further increased, achieving a total revenue of 26.77 billion RMB, accounting for 27.5% of the total operating income; the core profit of the operating and service business was 7.92 billion RMB, contributing to stable profits. Fitch stated that in recent years, Longfor's development business has shrunk, while its operating and service business has continued to grow. Therefore, in 2025, its operational and service business accounted for the majority of the group's total assets and EBITDA, becoming a key driving factor in its credit conditions. Fitch expects that, benefiting from the continuous expansion of shopping centers, the recurring income brought by LONGFOR GROUP's operating and service business will steadily increase.