The real estate sector has entered the era of existing stock, and Xuhui (00884) is expected to break through by leveraging the synergy between its light and heavy business operations.

Since the launch of the offshore debt restructuring at the end of 2022, CIFI has been a benchmark case for troubled private real estate companies seeking self-rescue. On one hand, it has consistently focused on "ensuring delivery," with nearly 300,000 new homes delivered over four years and a delivery rate exceeding 99%, ranking among the industry's best. On the other hand, it has actively sought to "reduce leverage," successfully voting through its domestic debt restructuring plan by September 15, 2025, and achieving the effectiveness of its offshore debt restructuring plan by December 29, thus becoming one of the first troubled private real estate companies to complete both domestic and international debt restructuring. Debt restructuring is just the first step in the recovery of troubled real estate companies. Whether a company can return to stable operations, restore sustainable profitability, and repair its valuation in the capital market hinges on its ability to embrace industry changes and complete its business transformation. According to data from the Ministry of Housing and Urban-Rural Development, in the first half of this year, the volume of second-hand housing transactions accounted for 50.4% of total transactions in China, surpassing new housing for the first time, marking a comprehensive shift of the real estate market into the era of stock assets. The Economic Daily has pointed out the direction for real estate companies' transformation: as China's real estate market transitions from an incremental era to a stock era, real estate companies will shift from a singular focus on development and construction to a diversified focus including agency construction, rentals, and operations. In line with this trend, at the annual shareholders' meeting held at the end of June, CIFI expressed its firm determination and confidence in its asset-light transformation. CFO Yang Xin pointed out that for private real estate companies to remain competitive in the new real estate model, they must have a significant breakthrough capacity in the stock market, and CIFI is a real estate group that has continuously succeeded in incubating multiple asset-light operation companies. In response to shareholder inquiries about the liquidity of CIFI's stock, he asserted, "We cannot change the capital market, but we can do our best with what we can control. In the future, CIFI's ecosystem platform of 'One Heavy and Five Light, Five Management Synergy' will gradually take shape, leading to a natural rebound in the liquidity and value of CIFI's stock." What asset-light operation companies has CIFI incubated? I conducted in-depth research. From publicly available information, the most notable is CIFIs Jian Guan, established in 2021, which has risen to the top two in the industry in just three years, positioning itself as a competitor to the dominant position of Greentown Management. According to its disclosed data, in the first half of 2026, it signed 42 new projects, with government and state-owned enterprise agency construction accounting for 55%. Its semi-annual sales reached 7.2 billion, already surpassing CIFI's main business of real estate development. The property management segment, ES SERVICES, was already listed by the end of 2018, with a lot of publicly available data. The 2025 annual report shows that ES SERVICES achieved revenue of about 6.87 billion yuan, setting a historical record; the annual external contract revenue reached 1.69 billion yuan, a year-on-year growth of 5.6%, also a historical peak. More importantly, the proportion of managed area by third parties climbed to 76.6%, consistently ranking in the top ten in the industry, indicating that its operational service capability has gained widespread market recognition. CIFI's rental housing brand, "Ling Yu," has been deeply engaged in the rental sector for over ten years. Its business model combines "asset management" and "entrusted management," managing over 80 rental communities and 150,000 rooms across 23 cities nationwide. Industry rankings show that Ling Yu was ranked third among China's housing rental enterprise management scales in 2025 and first in the Yangtze River Delta region. According to Ling Yu's own disclosure, it became the first enterprise in the industry to successfully implement a complete asset management closed loop of "investment, financing, construction, management, and exit" as early as the beginning of 2022. Over the years, Ling Yu has leveraged its full-chain capabilities of "asset management + development and construction + operational services" to complete the full process exit of 12 projects, solidifying its market positioning as a "one-stop integrated service provider for rental housing." CIFI Commercial has quietly developed over 16 years, managing over 3.5 million square meters and covering more than 20 cities with over 35 projects under management. Although CIFI Commercial has not disclosed how many of its management projects come from market-driven contracts, according to its official WeChat account, this year, CIFI Commercial has successively won bids for the Shanghai Jinding TOD commercial complex and performing arts center, as well as the Nantong Jinsa Newland Pharmaceutical and Jinsa Beach project's asset-light operation, indicating significant results in its market expansion. The vigorous development of various asset-light business segments forms the foundation of CFO Yang Xin's vision of creating an "ecosystem platform." An overall analysis reveals a clear and rigorous logic of collaboration among CIFI's various business lines: construction management serves as the traffic inlet and source of scale, continually supplying incremental projects to property management, rental management, and commercial management; property management follows up on delivery from construction management and manages the ongoing property services of existing projects, providing a stable cash flow basis and linking front-end development with back-end operations; rental management has successfully implemented the "investment, financing, construction, management, exit" closed loop, leveraging construction management to obtain increments and collaborating with asset management for exits; commercial management relies on its own operational capacity to revitalize existing assets while collaborating with asset management to enhance commercial asset values and achieve exit monetization. Since 2026, the mandatory convertible bonds (MCB) in CIFI's offshore restructuring plan have been converted into shares, creating selling pressure that has led to a continuous decline in the stock price. However, from another perspective, CIFI's net assets disclosed in the 2025 financial report amounted to 30.3 billion yuan, while the current market capitalization stands at only 730 million Hong Kong dollars, indicating a high safety margin and a significant undervaluation of the company, which does not reflect the potential value of debt optimization and future asset-light business ecosystem synergy. Looking at leading asset-light companies listed on the Hong Kong Stock Exchange, their long-term price-to-earnings ratios remain in the range of 10-15 times. Perhaps recognizing the stock price's undervaluation, CFO Yang Xin stated during discussions with investors that in this round of domestic debt to equity conversion, he firmly chose to convert nearly 2.8 million bonds held at face value into shares. In the era of stock assets, the synergy between light and heavy business is not a choice but a matter of survival. We have already seen in CIFI the potential for asset-light transformation and the collaborative development of light and heavy operations. Once this path is successfully navigated, CIFI will build its irreplicable moat, truly becoming a full-chain, all-sector, nationwide real estate development and operation group. Given its years of incubating business foundations and the firm attitude of its management team, this may be one of the most noteworthy examples of transformation among private real estate companies today.