Profit drops by 95.6%! On the day of the Green City annual report release, President Guo Jiafeng suddenly resigns | Live coverage of the earnings conference

“Mr. Guo has been with the company for (nearly) 30 years and has made outstanding contributions to the company’s steady development, but if he is proposing to retire, we also have no choice but to respect his personal wishes.” On March 31, at the 2025 performance meeting held by Greentown China, the management said the following about the departure of Administrative Chief Executive Officer (CEO) Guo Jiafeng.**

Core executives resign on the day the annual report is released—this is extremely rare across the entire industry, but a similar storyline has repeated itself again at Greentown China.

Second from the left is Guo Jiafeng / Sun Wanqiu / Photo

On the eve of the April 2025 performance meeting, Greentown China suddenly reshuffled its leadership. The former chairman of the board, Zhang Yadong, resigned, and his successor is Liu Chengyun, a Standing Member of the Party Committee of China Communications Construction Group and Deputy General Manager.

This time, Greentown China appointed Geng Zhongqiang, the former executive CEO who was in charge of finance and financing, to act in the capacity of Administrative CEO. Geng Zhongqiang is an executive from the “China Communications” system. He joined China Communications Construction Group in July 1995, and between 2018 and 2019 served as President and Deputy Secretary of the Party Committee of China Communications Real Estate, as well as a director and a member of the Party Committee of China Communications Real Estate Group. He was later appointed as the Executive CEO of Greentown China.

Although he was acting in the role, Greentown China also emphasized in its announcement that “after the pending considerations and appointment procedures for the Administrative CEO are completed, a separate announcement will be published.” However, in the eyes of the public, this is yet another key signal that China Communications Construction Group is further strengthening centralization of power and taking full control.

Some also linked Guo Jiafeng’s departure to performance, because the 2025 financial report is the worst “performance report” Greentown China has produced in recent years.

In 2025, Greentown China achieved revenue of about RMB154.966 billion, down 2.3% year over year; profit attributable to shareholders was about RMB0.071 billion, down 95.6% from RMB15.96 billion in the prior year.

At the performance meeting, when explaining the reasons for the sharp decline in profit scale, management said that the main reason was that the real estate market was still in a period of adjustment. The company continued to actively promote long-term inventory reduction and clearance to support long-term development, resulting in a decline in the gross profit margin of revenue recognized from 2025 and also the decline in performance of share of results from joint ventures and associates.

According to management, among the projects delivered and revenue recognized in 2025, some with relatively high performance contribution are cooperation projects, and Greentown China’s equity share in these projects is not that high, therefore the proportion of net profit attributable to the parent company is relatively low.

Meanwhile, during the reporting period, Greentown China incurred losses of RMB1.1 billion in joint ventures and associates, which had a major impact. “Because this is one-way consumption of Greentown’s net profit attributable to the parent company.”

Impairment charges are still eating into profits.

In 2025, Greentown China recorded a net amount of RMB4.921 billion for impairment losses on relevant assets and losses from changes in fair value, which was basically the same as the previous year, thereby affecting profit attributable to shareholders.

Adding up the impairment charges from the past two years, within the three-year period from 2023 to 2025, Greentown China has made total impairment provisions of more than RMB11.8 billion. Management expects the above impact to continue into 2026: “Affected by the same factors, the company’s profit in 2026 is also expected to face some pressure.”

However, management also emphasized that in recent years, the quality of Greentown China’s newly acquired projects has been very good, and the proportion of equity is also gradually increasing. As the old inventory prior to 2021 is gradually reduced, the company’s net profit attributable to the parent company will improve to some extent.

In recent years, Greentown China has been pushing long-term inventory reduction and clearance. During the reporting period, the company cleared inventory of about RMB32.8 billion from 2021 and earlier, and the clearance ratio for homes-to-cars (car inventory clearance ratio) further increased to 1.51 times.

Management said that as of 2025, the proportion of inventory from 2021 and earlier has been decreasing year by year, and in 2026 the company will further intensify inventory reduction efforts and set certain assessment policies.

For example, in 2026, the company will strengthen assessments for major and difficult items, reinforce the stock contract indicator targets from 2021 and earlier, and key difficult-inventory plan indicators such as long-term residential inventory, parking garages, and commercial remaining-end products. The assessment strength will be directly linked to the payout of annual bonuses; subsidiaries that cannot meet KPIs will have their annual bonuses deferred.

At the same time, resources will also be tilted toward existing inventory projects. For projects from 2021 and earlier, the company will orient resource allocation toward improving sales pace, and will adjust resource allocation in terms of pricing policy, incentive policy, personnel replenishment, and redeployment of outstanding personnel, among other dimensions. For the restart of development in relation to low-efficiency value drives such as cooperation disputes, specific measures include whole-set repurchase, commercial-to-residential conversion, resolving cooperation disputes, and so forth.

Last year, Greentown China achieved total contracted sales of RMB251.9 billion, of which sales from self-invested projects were RMB153.4 billion and equity sales were RMB104.3 billion; and sales from entrusted construction management projects were RMB98.5 billion.

From the investment side, in 2025 Greentown China added 50 new projects during the year, with attributable land cost of about RMB51.1 billion. It is expected that new project value will be RMB135.5 billion, and the average attributable equity ratio of these new projects is about 69%. Among these newly acquired projects, newly added project value in first- and second-tier cities was RMB116.8 billion, accounting for 86%, and the Yangtze River Delta accounted for 81%.

During the reporting period, Greentown China seized the early opportunities to ensure conversion, with a conversion rate of newly acquired projects of 33%, up 3 percentage points year over year, achieving sales of RMB45.3 billion for the year.

Regarding this year’s investment plan, management stated at the meeting that 2026 will be the most difficult year in recent years.

It pointed out that the real estate market is still in a bottoming-out phase, and the overall market scale still faces some downward pressure. Compared with prior years, the supply-side pace has clearly slowed down, total volume has declined, and there are relatively fewer high-quality land plots. For cities with more inventories and slower clearance, developers will slow down land acquisition, so differentiation among cities is very pronounced.

In 2026, Greentown China will adhere to the “one in, one out” principle, balancing investment with cash flow and profit and not placing emphasis on any single dimension. While developing deeply in core cities, the company will also actively explore structural opportunities in high-quality land in non-hot cities. The initial target for annual land acquisition value is set at RMB1,000 billion, and it will be dynamically adjusted during execution.

As of the end of 2025, Greentown China has total project value of about RMB2300 billion. Combined with inventory and newly added project value, the company aims to achieve a sales target of about RMB1,300 billion in 2026. Management emphasized, “We will still take comprehensive account of industry conditions as well as our internal investment scale to ensure that sales scale and business safety are aligned.”

Reporter: Wu Dian

Text editor: Sun Wanqiu