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

According to a report from CITIC Construction Investment, the overall performance of the real estate development industry in the first half of 2025 continues to be under pressure, with a total revenue decrease of 15%. The increase in inventory impairment provisions and rising expense ratio led to a 27 billion yuan expansion of losses in the first half of the year. However, the improvement in the drag on performance due to the decline in gross profit margin is significant, with the gross profit margin and profits stabilizing for some high-quality real estate companies. The debt repayment ability of real estate companies is differentiated, as the shrinking business scale continues the deleveraging trend, but due to the large number of companies incurring losses, the overall debt repayment ability weakens. Leading real estate companies still maintain profitability and stable debt repayment ability. The sales of the top 100 real estate companies in the first 8 months decreased by 14% year-on-year, narrowing the decline by 16 percentage points compared to the full year of last year; however, the land market has rebounded first, with the top 100 real estate companies acquiring a total of 723.5 billion yuan in land in the first 8 months, a year-on-year increase of 31%. Real estate companies are actively replenishing inventory in core cities, and sales volume is approaching a bottom.