CICC Securities: High-quality real estate companies' performance stabilizes first, real estate companies' confidence in land acquisition significantly improves.

According to the research report of CITIC Securities, the overall performance of the real estate development industry in the first half of 2025 is still under pressure, with a total revenue decrease of 15%. The increase in inventory impairment provision and rising expense ratio led to a 27 billion yuan widening of losses in the first half of the year. However, the improvement in gross profit margin significantly alleviated the drag on performance, with the gross profit margin and profits of some high-quality real estate companies stabilizing and rising. There is a differentiation in the debt repayment ability of real estate companies, as the trend of deleveraging continues due to the contraction of business scale, but overall debt repayment ability weakened due to more losses in the industry. The leading real estate companies are still profitable and their debt repayment ability is stable. The sales of the top 100 real estate companies in the first 8 months decreased by 14% year-on-year, a 16 percentage points narrower decline compared to the full year of last year. However, the land market has started to show signs of recovery, with the top 100 real estate companies acquiring a total amount of land worth 723.5 billion yuan in the first 8 months, an increase of 31% year-on-year. Real estate companies are actively replenishing inventory in core cities, and sales volume is gradually approaching the bottom.