Midea Real Estate Holding Limited delivered QQ2 2025 results that show a pronounced year-over-year revenue decline alongside a notable margin expansion and resilient profitability. Revenue fell to 1.997 billion CNY in the quarter, down approximately 84% year over year, reflecting a difficult base in the prior-year period and ongoing sector headwinds in China’s real estate market. Despite the top-line softness, gross margin rose to roughly 30.8%, supported by favorable product mix, cost discipline, and a lean cost structure, which lifted operating income to 395.8 million CNY and net income to 305.5 million CNY, with a net margin near 15.3% and an EPS of 0.22 CNY. The company maintains a very conservatively levered balance sheet (debt ratio about 2.3%), contributing to a solid liquidity posture but modest near-term flexibility given a current ratio of 0.91 and a quick ratio of 0.70. Management commentary (as available) centers on continuing efficiency gains, selective project execution, and potential upside from a more favorable housing cycle, though explicit forward guidance is not provided in the disclosed materials. The business backdrop remains conditional on policy support, land supply dynamics, and ongoing demand recovery in China’s property market.
Key takeaway for investors: Midea Real Estate demonstrates a quality-through-cycle margin recovery amid a revenue trough, underpinned by conservative leverage and solid cash generation potential. The sustainability of profitability will hinge on a renewed property market cycle, continued cost discipline, and the company’s ability to monetize its diversified segments (Property Development & Sales, Property Management, Commercial Properties, and Real Estate Technologies) as market conditions improve.