In a move that signals a defiant optimism against the backdrop of China’s protracted real estate crisis, Longfor Group Holdings has announced a massive share donation from its founding shareholders. Charm Talent International Limited and Junson Development International Limited, the investment vehicles for the company’s founders, have committed to donating 60 million and 40 million shares respectively to an employee trust. This transfer of 100 million shares, valued at approximately HK$740 million, is intended to reward core personnel who have remained committed to the firm during the industry's most challenging downward cycle.
This unconventional gesture is being integrated into Longfor’s Restricted Share Award Scheme, serving as a powerful incentive for the 'long-termism' that the company has long championed. Unlike many of its private-sector peers that have faced liquidity crunches or total collapse, Longfor has maintained a reputation as a 'survivor' by strictly managing its balance sheet and diversifying into commercial property management. By transferring equity without compensation, the major shareholders are effectively diluting their own holdings to fortify the human capital they believe will drive the next stage of the company’s evolution.
The timing of the donation is particularly significant as the Chinese property sector continues to grapple with weak buyer sentiment and a structural shift toward a 'new model' of development. For Longfor, retaining talent is no longer just about operational efficiency; it is about maintaining a competitive edge in a market where trust and execution are the only remaining currencies. The shareholders’ decision to forego cash dividends in favor of scrip dividends since 2021 further underscores their commitment to preserving the company's liquidity while betting on its future valuation.
While the broader market remains cautious, this internal alignment between founders and employees provides a rare psychological floor for the company’s stock. By rewarding those who 'made the right choices based on long-term value' during the industry’s downturn, Longfor is attempting to institutionalize a culture of resilience. For international investors, the move serves as a rare signal of stability in a sector characterized by volatility, suggesting that Longfor’s leadership sees a clear path through the current economic fog.