In the year 2024, the net profit attributable to the parent companies of China’s top 50 listed real estate enterprises amounted to -280.365 billion yuan, and both the net profit margin and gross profit margin, two key indicators of profitability in the real estate sector, experienced a decline.
As the annual reports of listed companies for the year 2024 were successively released, the operational conditions of Chinese real estate enterprises began to surface. Among the top 50 real estate firms, declining operating income, expanding losses, and decreased cash flow have become common phenomena.
According to a report from “China Real Estate News” on May 6, the financial reports of listed companies showed that the total operating income of the top 50 listed real estate enterprises (excluding China Evergrande) in 2024 was 3.62 trillion yuan, a decrease of 17.1% year-on-year. The net profit attributable to the parent companies was -280.365 billion yuan, an increase of 38.193 billion yuan in losses compared to 2023, resulting in an average monthly loss of 23.364 billion yuan.
Simultaneously, the two major indicators of profitability for real estate enterprises, the net profit margin and gross profit margin, both experienced a decline. The average net profit margin for the top 50 listed real estate enterprises in 2024 was -22.1%, a decrease of 13.3 percentage points from 2023; the average gross profit margin was 10.72%, down by 5.8 percentage points from 2023.
The data shows that with a gross profit margin of 10.72%, companies make only 10.72 yuan in gross profit for every 100 yuan of goods sold, indicating a very low level of profitability. In recent years, factors such as inventory write-downs and declining sales prices have contributed to the continual decrease in profit margins in the real estate development sector.
From 2021 to 2025, the average gross profit margin of the top 50 listed real estate enterprises decreased from 20.4% to 10.72%, while the average net profit margin decreased from 6% to -22.1%.
In 2024, although Vanke topped the list with operating income of 343.2 billion yuan, it experienced a 26.32% year-on-year decrease. Poly Development ranked second with operating income of 311.7 billion yuan, down by 10.16%, while China Resources Land, in third place, saw its operating income increase by 11.01% to 278.8 billion yuan. However, companies like Country Garden and Greenland Holdings, ranked fourth and fifth, achieved operating incomes of 252.8 billion yuan and 240.9 billion yuan respectively, still within the top five, but their year-on-year decline rates were too rapid.
Overall, among the top 50 listed real estate enterprises, only 17 companies saw a year-on-year increase in operating income, accounting for less than 40%. Six companies experienced a decline of over 50%, including Sunac China, Road King Group, and China Aoyuan Group.
Additionally, the losses within real estate enterprises continue to expand. Of the top 50 listed real estate companies, 33 saw a year-on-year decrease in operating income; 36 saw a year-on-year decrease in net profit attributable to the parent companies, accounting for over 70%; and 31 companies incurred losses, making up over 60%. Vanke was the biggest loss-maker among listed real estate companies in 2024, with a loss of 49.48 billion yuan and a net profit decline of 506.81% year-on-year. In the first quarter of this year, Vanke’s operating income fell by 38.31% year-on-year, resulting in a net loss of 6.246 billion yuan.
While profits are declining, the total debt of the top 50 listed real estate companies amounts to 13.67 trillion yuan, although it decreased by 1.7 trillion yuan from the end of 2023, the absolute amount remains high due to the base being too high. At the end of 2024, Poly Development, Country Garden, Greenland Holdings, and Vanke had total debts of 992.6 billion yuan, 984.6 billion yuan, 980.7 billion yuan, and 947.4 billion yuan respectively. There are 11 companies among real estate firms with a debt-to-asset ratio exceeding 90%, including China Aoyuan, Times China, and Poly Developing Properties, with debt-to-asset ratios exceeding 100%, indicating greater debt repayment pressures. The main source of self-owned funds for real estate companies, sales revenue, decreased by 31.3% year-on-year. As of the end of 2024, the top 50 listed real estate companies collectively held 1.26 trillion yuan in monetary funds, an 8.1% decrease year-on-year.
Netizens expressed their views on this matter, with one saying, “The common people have no money in hand, yet the real estate game continues.”
Another individual named “Ren Zhe Le Shan” believes, “There is an oversupply on the supply side, and the purchasing power on the demand side is not enough, so the decline is not surprising.”