Longfor

Longfor Group Holdings Limited is a real estate enterprise built around three major business segments of development, operation and services, with main business lines covering residential development, commercial investment, long-term rental apartments, property management and smart construction, organised around the living, working and social scenarios of customers in core cities. The company was founded in Chongqing in 1993, originally named Longfor, and its founder Wu Yajun long served as chairman of the board; the chairman’s statements for 2022 to 2024 were signed by Chen Xuping in the capacity of chairman.

In 2009, Longfor achieved contracted sales of 18.36 billion yuan, up 79.8% year on year; turnover of 11.37 billion yuan, up 154.2% year on year; and profit attributable to shareholders of 2.21 billion yuan, with core profit excluding revaluation gains on investment properties of 1.61 billion yuan. Adhering to a strategy of regional focus, the company acquired projects during the year in Hangzhou, Qingdao, Wuxi, Changzhou, Shenyang and elsewhere; together with Dalian, entered in the first quarter of 2010, it had entered 11 cities, with a total land bank of more than 25 million square metres, of which attributable area was 21.72 million square metres, and an average land acquisition cost that year of 1,869 yuan per square metre. The group then held four shopping centres, all located in Chongqing, with a total area of 331,843 square metres and total rental income in 2009 of 198 million yuan, up 24.7% year on year.

In 2010, the group’s contracted sales reached 33.32 billion yuan, up 81.5% year on year, entering the national top ten by real estate sales for the first time; turnover rose 32.7% to 15.09 billion yuan, and profit attributable to shareholders rose 87.0% to 4.13 billion yuan. It added 11.97 million square metres of land bank during the year, bringing the total land bank to 31.61 million square metres, and newly entered the three cities of Dalian, Yantai and Yuxi. During the year it opened two new shopping centres, Chongqing MOCO and Chengdu Sanqianji, bringing the opened area of held properties to nearly 400,000 square metres; the already opened Chongqing North City Paradise Walk, West City Paradise Walk and others completed renovation and upgrading, with rent levels 45.1% higher than the previous year. At the end of 2010, the group’s net gearing ratio was 43.6% and it had more than 10 billion yuan of cash on hand.

In 2011, the group achieved profit attributable to shareholders of 6.33 billion yuan, up 53.2% from the previous year, with fully diluted earnings per share of 1.22 yuan; full-year contracted sales of 38.27 billion yuan set a record high, and in 8 of the 11 cities where it achieved sales it ranked in the local top ten; the Chongqing company ranked first in the market for the eighth consecutive year with a market share of nearly 10%, and Yantai achieved 3 billion yuan of contracted sales on its debut, ranking first locally. According to a third-party survey, customer loyalty rose 4 percentage points from the previous year to 76%. At the start of the year the group received its first credit ratings, BB+ from Standard & Poor’s and Ba2 from Moody’s, and in April it issued US$750 million of five-year bonds; the average debt maturity rose from 3.4 years to 4.0 years, and the average cost of debt was 6.4%; by year-end cash on hand had risen from 12.6 billion yuan at mid-year to 14.5 billion yuan, and the net gearing ratio had fallen from 56.56% at mid-year to 43.02%. Rental income from investment properties rose 40.0% to 402 million yuan, with a rental gross margin of 80.1%; after the completion of the upgrade and renovation of anchor stores at Chongqing West City Paradise Walk, its rental income rose sharply by 65.9%; during the year Beijing Yihe Starry Street and Chongqing Chunsen Starry Street were completed and opened, bringing the opened area of held properties to 438,979 square metres. In the first half of the year the group added four executive directors and one independent non-executive director, and in August appointed Shao Mingxiao as group CEO, with chairman Wu Yajun stepping down as CEO to focus on her work as chairman of the board.

In 2012, the group’s contracted sales rose 4.9% to 40.13 billion yuan, turnover rose 15.8% to 27.89 billion yuan, core profit attributable to shareholders rose 20.0% to 5.40 billion yuan, and the core net profit margin rose from 18.7% to 19.4%; sales area grew 27.2% year on year, the full-year sales collection rate was 91%, customer loyalty remained at 76%, and property service satisfaction reached 92%. During the year the group acquired 17 new land parcels with a total gross floor area of more than 8.91 million square metres, at an average premium of only 8.72% over the listed reserve price, focusing on replenishing city-centre land in Beijing, Hangzhou, Xi’an, Chengdu, Shenyang and other cities, and added three new cities, Xiamen, Quanzhou and Shaoxing. On financing, during the year it completed an offshore syndicated loan of HK$2.43 billion, issued US$400 million of seven-year US dollar bonds, and carried out its first share placement since listing, of HK$3.09 billion. On the commercial side, Phase 1 of Chongqing Times Paradise Walk opened with a size of 160,000 square metres, an opening occupancy rate of more than 90%, and footfall of more than 500,000 in the first three days after opening. In early 2013, the group acquired a site in Wangcheng, Changsha, strategically entering central China.

In 2013, the group’s sales rose 20% from the previous year to 48.12 billion yuan, and turnover rose 49% to 41.51 billion yuan, of which rental income from the property investment business rose 31.3% to 630 million yuan; profit attributable to shareholders was 8.04 billion yuan, core profit was 6.21 billion yuan, and the core net profit margin attributable to shareholders was 15%. All 17 projects acquired in 2012 were launched on the market during the year; the Chongqing and Beijing companies steadily contributed 8 to 10 billion yuan each per year, and the sales capacity of the Hangzhou and Chengdu companies rose to 6 to 8 billion yuan. The group concentrated its land purchases in the first and fourth quarters, when competition was relatively mild, buying 15 new parcels at reasonable prices with an average premium rate of less than 13%, mainly located in near-city areas of first-tier cities and core locations of second-tier cities, and established a presence in Changsha, Kunming, Suzhou and Jinan, expanding its business coverage to 21 cities in 5 major regions. On financing, the group issued 10-year long-term bonds in January and completed a HK$7.7 billion syndicated loan in July, with a financing cost of 6.58% for the period. At the end of December 2013, Chengdu North City Paradise Walk opened as the group’s first large shopping centre outside Chongqing.

In 2014, the group’s contracted sales were 49.05 billion yuan, up 2% year on year, with the sales collection rate remaining around 90%; turnover rose 22.8% to 50.99 billion yuan, of which rental income from the property investment business rose 38.1% to 880 million yuan; profit attributable to shareholders was 8.35 billion yuan, core profit was 6.61 billion yuan, the core net profit margin was 13.0%, and the dividend payout ratio was raised by 5 percentage points to 25% of core net profit. The group concentrated on buying 16 parcels at reasonable prices in the first and fourth quarters, establishing a presence in Nanjing and Guangzhou and expanding its business coverage to 24 cities in 5 major regions. In March it locked in a HK$3.4 billion five-year syndicated loan, and in May it issued its first four-year dim sum bond of 2 billion yuan; at year-end it had 19.04 billion yuan of cash on hand, an overall borrowing cost of 6.4% and a debt maturity extended to 4.5 years, and in December it obtained a domestic AAA rating. During the year four commercial real estate projects, including Beijing Changying Paradise Walk, opened as scheduled, and total commercial income rose 38.1%.

In 2015, the group’s contracted sales were 54.54 billion yuan, up 11.2% year on year, a record high; turnover was 47.42 billion yuan, of which rental income from the property investment business rose 61.5% to 1.42 billion yuan (1.50 billion yuan before deducting business tax); profit attributable to shareholders was 8.99 billion yuan, core profit was 6.95 billion yuan, up 5.1% year on year, the core net profit margin attributable to shareholders was 14.6%, and the dividend payout ratio was raised by 5 percentage points to 30% of core net profit. Adhering to its “10+X” strategy, the company added 25 land parcels during the year, concentrated in high-tier cities such as Beijing, Shanghai, Hangzhou and Xiamen. On the strength of its domestic AAA investment rating, the company issued 8 billion yuan of corporate bonds, and its overall borrowing cost fell to 5.74%. During the year the company received a BBB- investment-grade rating from Fitch (outlook stable), and Standard & Poor’s raised its outlook on the company to positive (BB+), making it the first private enterprise among property developers of similar size to obtain investment grade both domestically and overseas. In the second half of the year it opened two Paradise Walks in Hangzhou and Chengdu, totalling 240,000 square metres, giving Longfor’s commercial business a presence across three major regions, the west, north China and east China, with a cumulative opened mall area of nearly 1.5 million square metres.

In 2016, the group’s contracted sales were 88.14 billion yuan, up 61.6% year on year, a record high; turnover rose 15.6% year on year to 54.80 billion yuan, of which rental income from the property investment business rose 35.2% to 1.91 billion yuan; core profit was 7.76 billion yuan, up 11.8% year on year, the core net profit margin attributable to shareholders was 14.2%, and the dividend payout ratio was raised by 5 percentage points for the third consecutive year to 35% of core net profit. During the year the company added 43 land parcels at reasonable prices, concentrated in Beijing, Shanghai, Hangzhou, Guangzhou, Chongqing, Xiamen, Jinan and other cities, and added Tianjin and Wuhan; in February 2017 it formally entered Hefei, bringing the number of cities covered to 27. During the year, on the strength of its domestic AAA investment rating, it issued 11.8 billion yuan of corporate bonds, and its overall borrowing cost fell further to 4.92%. During the period the company obtained a BBB- investment-grade rating from Standard & Poor’s, and Moody’s raised its outlook on the company to positive (rating Ba1); together with Fitch’s BBB- rating, it was poised to become the first private property developer to be unanimously granted investment grade by the three major overseas rating agencies. On the commercial side, it added three Paradise Walks in Beijing, Chongqing and Shanghai, bringing the cumulative number of opened malls to 21 with an operating area of 1.94 million square metres. “Guanyu”, which serves young customers’ needs for quality rental housing and lifestyle services, and “Yizhan Space”, positioned as co-working offices within commercial complexes, were successively launched in Beijing, Shanghai, Chengdu, Chongqing and elsewhere.

In 2017, the group’s contracted sales reached 156.08 billion yuan, up 77.1% year on year, securing its place in the industry’s top ten; turnover rose 31.5% year on year to 72.08 billion yuan, of which rental income from the property investment business rose 35.6% to 2.59 billion yuan; core profit was 9.77 billion yuan, up 25.9% year on year, the core after-tax profit margin was 18.3%, the core profit margin after minority interests was 13.6%, and the dividend payout ratio was raised to 40% of core profit; it also proposed a special dividend of 8.5 cents per share for the 25th anniversary of its founding, for a total dividend of 0.758 yuan per share. During the year it added 76 land parcels to its land bank at an average floor price of 6,445 yuan per square metre, and newly expanded into seven cities: Shenzhen, Hong Kong, Hefei, Baoding, Fuzhou, Jiaxing and Zhuhai. During the period the company became a private property developer unanimously granted investment grade by domestic and overseas rating agencies, and in July 2017 and January 2018 it twice issued investment-grade US dollar bonds, with total financing of US$1.25 billion. On the commercial side, five Paradise Walks opened, with occupancy and opening rates both above 95%, and it acquired 17 new held commercial projects, entering 4 cities for the first time; as of the end of the period, Guanyu covered 17 first- and second-tier cities, with a cumulative 15,000 rooms opened. From the start of 2018 to the time of the report, the group newly entered three cities, Nanchang, Zhengzhou and Nantong, expanding its footprint to 36 cities.

In 2018, the group’s contracted sales reached 200.64 billion yuan, up 28.5% year on year; turnover rose 60.7% year on year to 115.80 billion yuan, of which rental income from the property investment business rose 57.7% to 4.09 billion yuan; core profit was 12.85 billion yuan, up 31.5% year on year, the core after-tax profit margin was 14.7%, the core profit margin after minority interests was 11.1%, and the dividend payout ratio was raised to 45% of core profit. The full-year sales collection rate was above 85%, total head-office-level credit lines exceeded 200 billion yuan, and the full-year average financing cost remained at a low 4.55%. The company added 91 projects during the year, making many gains in hot second-tier cities in metropolitan areas such as Chongqing, Chengdu, Hangzhou and Qingdao, and established a presence in 11 new cities including Nanchang, Zhengzhou, Guiyang and Dongguan. On the commercial side, rental income rose 42% to 3.6 billion yuan, with same-store growth of 17%; Beijing Fangshan Paradise Walk, Changzhou Longcheng Paradise Walk and Chengdu Xichen Paradise Walk, which opened during the year, debuted with occupancy rates of nearly 100%; as of the end of the period, Guanyu had opened a cumulative total of more than 50,000 rooms. During the year, through the China Guangcai Program Foundation, the group and its major shareholder jointly established the “Guangcai-Longfor Education Poverty Alleviation Special Fund”, pledging total donations of 300 million yuan, and it donated 100 million yuan to jointly establish the “Longfor-Palace Museum Cultural Development Fund” with the Palace Museum.

In 2019, the group achieved contracted sales of 242.5 billion yuan, up 21% year on year; its average financing cost was only 4.54%, Moody’s raised its outlook on the company to positive, and Standard & Poor’s upgraded its rating to BBB. The group adhered to decision-making discipline and concentrated land acquisition in the second half of the year, adding 90 new parcels and expanding into 11 new cities during the year, with about 90% of supply concentrated in hot cities and high-value areas. Full-year rental income rose 42% to 5.79 billion yuan, and 10 new malls, including Beijing Chang’an Paradise Walk, Shanghai Minhang Paradise Walk and Hangzhou Xixi Paradise Walk, opened in succession. In March 2019, the group donated 100 million yuan to set up the “Longfor-Palace Museum Cultural Fund”; in response to the pandemic, the group donated 39 million yuan in cash and supplies and granted rent reductions to more than 4,500 partner brands and merchants in the 39 malls it had in operation.

In 2020, the group achieved contracted sales of 270.6 billion yuan, up 11.6% year on year; its average financing cost fell further to 4.39%, the net gearing ratio was kept at a low 46.5%, and the cash-to-short-term-debt ratio was 4.24 times. During the year it acquired 121 new parcels with a total gross floor area of 25.67 million square metres, expanded into 8 new cities, and increased the number of cities in which its business was focused and deeply cultivated to 63. On the commercial side, it opened 10 new malls in six cities, Nanjing, Chengdu, Suzhou, Xi’an, Jinan and Chongqing, with a year-end occupancy rate of 97%, and full-year commercial rental income rose 23% to 5.8 billion yuan. Guanyu achieved full-year rental income of 1.8 billion yuan; Longfor Smart Services achieved full-year revenue of 5.8 billion yuan. “Tange”, the lifestyle services brand representing home leasing and sales and home renovation, was upgraded to a main business line. In November of the same year, the Longfor Charity Foundation was formally registered and established, and in December the group completed the construction of its green finance framework. On March 15, 2021, Longfor was formally included in the Hang Seng Index.

In 2021, the group’s residential development business achieved contracted sales of 290.1 billion yuan, up 7% year on year; operating income, made up of commercial operations, rental housing, property management and others, reached 18.8 billion yuan, up 39% year on year; and core net profit after minority interests rose 20% year on year. As of the end of 2021, the group’s net gearing ratio was 46.7% and its average financing cost was 4.14%. During the year it acquired 122 new parcels with a total gross floor area of 23.55 million square metres. On the commercial side, same-store sales and footfall at opened malls both grew by more than 20% year on year, and commercial rental income rose 40% year on year to 8.15 billion yuan; long-term rental apartments contributed full-year rental income of 2.23 billion yuan, and Guanyu had become profitable since starting operations in 2017. At the start of the year, the group formally launched its smart living and space services brand “Longfor Intelligent Living”.

In 2022, Longfor delivered more than 110,000 quality homes, 100% on schedule, with customer satisfaction of about 90%; full-year core net profit after minority interests reached 22.5 billion yuan, rising steadily; and operating income made up of the operation and service businesses reached 23.6 billion yuan, up 25% year on year, with operating profit accounting for 27%. According to Caixin, the company’s operating revenue that year rose 12.2% to 250.57 billion yuan, net profit attributable to shareholders of the parent rose 2.1% year on year to 24.36 billion yuan, and the gross margin fell 4.1 percentage points year on year to 21.2%. In the same year, Longfor’s commercial business had acquired a cumulative 139 projects in 32 cities nationwide; Longfor Guanyu had opened more than 110,000 rooms; Longfor Intelligent Living’s property management business had 320 million square metres under management, with customer satisfaction remaining above 90% for 14 consecutive years. The company also launched the smart construction brand Longfor Longzhizao, combining multiple business modules including preliminary planning, development management, scheme design and smart city solutions, forming one-stop, full-cycle, all-format service capabilities. On the financial side, by the end of 2022 the group had repaid all of its 2023 offshore debt in advance, and the swap ratio of its foreign currency debt reached 98%. 2023 was the 30th anniversary of Longfor’s founding.

In 2023, the group’s development business achieved full-year contracted sales of 173.5 billion yuan, ranking ninth in the industry; the operation and service businesses achieved 24.9 billion yuan of sustainable revenue for the year, up nearly 6% year on year, and the contribution of these two businesses to core profit after minority interests had reached more than 60%. As of the end of 2023, the group’s interest-bearing debt balance was 192.6 billion yuan, down 7.4% from 2022, with bank financing accounting for 77%; the group as a whole achieved positive operating cash flow (including investment, interest, dividends and so on). Full-year same-store sales at Longfor’s opened malls rose 30% year on year, same-store average daily footfall rose 28% year on year, and the occupancy rate recovered from 93% at the start of 2022 to 96%; Longfor Guanyu had opened 123,000 rooms in high-tier cities, with an overall occupancy rate of 95.5%. In the same year, Longfor was selected for the Hang Seng Corporate Sustainability Benchmark Index, and its MSCI ESG rating jumped to AA.

In 2024, the group added 11 Paradise Walk projects in operation in Nanjing, Hefei, Suzhou, Chongqing, Changsha and elsewhere; the commercial segment, with an occupancy rate of 97% (as of the end of 2024), achieved steady growth in both operating profit and cash flow, with same-store growth in both sales and footfall. Through six business segments, long-term rental apartments, industrial offices, serviced apartments, vibrant blocks, women’s and children’s hospitals, and health and elderly care, the asset management business line Longfor Longzhi Asset Management built full-cycle, all-format asset management capabilities, contributing operating revenue of 3.18 billion yuan for the year. Longfor Intelligent Living achieved full-year revenue of 11.42 billion yuan, up 8% year on year; its five flywheel businesses of residential, commercial and enterprise, home furnishing, select products, and leasing and sales served more than 3.25 million households, with more than 400 million square metres under management and customer satisfaction above 90% for the 16th consecutive year. Longfor Longzhizao provides one-stop, all-format services covering multiple modules including research and planning, design, construction management and fine engineering. On ESG, 100% of the group’s new projects met national green building star-rating standards, and it built a digital dual-carbon management platform covering the entire business chain; it had invested a cumulative total of more than 2 billion yuan in charitable funds, benefiting 2.34 million people assisted across the country.