Poly Long Commercial hands over the baton to "its own people"

On March 1, 2026, Poly Property (09909.HK) issued a notice that sent ripples through the capital market and the commercial real estate circle.

Less than 13 months after the former CEO Xu Meng was abruptly appointed, this once highly regarded professional manager from the Longfor system announced his departure, citing the need to “devote more time to other businesses.”

He was succeeded by 39-year-old Cai Erchao—a veteran who has been immersed in the Poly system for nearly a decade; also a relative of Poly founder Xu Jiankang’s family.

At a time when the industry’s winter has not fully thawed and the competition in commercial real estate inventory is intensifying, this seemingly routine personnel change appears far more complex than a simple resume swap.

From bringing in external professional managers to seek change, to recalling family members to the core, is Poly Property completing a thorough shift in governance logic, or just another short-term transition?

Rewind to January 21, 2025. On that midday, news spread that Longfor veteran Xu Meng would be appointed CEO of Poly Property.

“Mr. Xu has many years of experience in commercial project operation and management, with extensive expertise in market insight, commercial investment, product planning, and full-cycle asset management services.”

A few hours later, Poly Property officially announced the appointment. The two parties signed a five-year service contract, with Xu Meng’s annual fixed salary set at 1.2 million yuan.

As a seasoned veteran who previously managed over 50 Tianjie projects in Longfor’s East China region, 42-year-old Xu Meng carries the imprint of Longfor’s systematic and refined operational approach. “During his tenure, he led the team to make Longfor Commercial stand out in East China, establishing a leading market position,” Poly Property praised his achievements at Longfor.

Xu Meng’s appointment was widely interpreted by the market as an effort by Poly Property to introduce external advanced management experience to improve operational efficiency and cope with the industry downturn.

Data shows that in the first half of last year, Poly Property achieved revenue of 1.3 billion yuan and a net profit attributable to the parent of 183 million yuan. Meanwhile, the company’s operating cash flow increased significantly by 52.8% year-over-year, reaching 222 million yuan.

Despite ongoing pressure in the real estate sector and slow recovery in the consumer market, Poly Property demonstrated strong operational resilience and cash flow management.

In terms of scale, at the end of the reporting period, Poly Property managed 97 commercial projects covering 11.06 million square meters; had 129 signed projects with a total area of 14.24 million square meters.

Among these, 70% of projects are in the Yangtze River Delta region. In the first half of last year, the overall leasing rate was approximately 91.8%, up 0.3 percentage points year-over-year; commercial collection rate reached 98.7%, up 0.2 percentage points.

Meanwhile, residential property management projects totaled 128, with a total managed area of about 23.708 million square meters; 138 signed properties with a total signed area of about 30.129 million square meters.

The new CEO, Cai Erchao, has a background markedly different from Xu Meng.

If Xu Meng arrived with Longfor’s standardized approach, Cai Erchao is a “veteran” who has been working within the Poly system for nearly ten years, and is also a “family insider” in terms of blood relations.

The announcement states that 39-year-old Cai Erchao joined Poly in late 2016, holding roles in real estate project development, business restructuring, and TOD commercial project planning.

He possesses mature practical skills in commercial real estate investment, construction, development, and operation. During his tenure as General Manager of Xiamen Poly Real Estate Management Co., Ltd., he led several major commercial real estate development projects.

Deeper still is his family connection.

Cai Erchao is a cousin of Poly Commercial Executive Director and Chairman Xu Huafang, as well as Non-Executive Directors Xu Hualin and Xu Huafen. His promotion is seen externally as a sign that the Xu family’s control over Poly Commercial will deepen at the executive level, serving as a key move to reinforce the “firewall” during a crisis.

Additionally, before joining Poly in late 2016, Cai Erchao founded a trading company and served as its general manager.

This combination of external entrepreneurial experience, familiarity with Poly’s internal operations, and trusted blood ties may be exactly what Poly needs now—someone capable of frontline management who can unconditionally align with the overall family strategy.

Just over a month ago, Poly’s equity structure underwent a significant reshuffle.

On January 27, 2026, Poly Property sold its 25% stake in Poly Commercial for HKD 361 million to Prime Capital Investment Limited, controlled by family members of the Xu family, with Xu Zhanhao holding 51% and Xu Hualin 49%.

Xu Zhanhao is the son of Xu Huafang and grandson of founder Xu Jiankang; Xu Hualin is Xu Huafang’s cousin and Xu Zhanhao’s aunt.

This transaction served a dual purpose: alleviating liquidity pressure for Poly Property and shifting the control of core asset Poly Commercial from one pocket to another, preventing equity dilution or loss during subsequent debt restructuring.

Currently, Poly Property is in the critical final stage of domestic and overseas debt restructuring. According to the plan, creditors can choose to convert debt into no more than 32.4% of Poly Commercial’s issued shares.

In this context, Poly Commercial’s role is no longer just an independent listed platform but the most vital “cash cow” and “ballast stone” for the entire Poly system amid the debt winter.

Handing the CEO position to a familiar, absolutely reliable family member like Cai Erchao makes logical sense: ensuring that during the most chaotic debt restructuring period, operations remain stable and fully aligned with the parent company’s strategic deployment.

Cai Erchao’s appointment marks the end of Poly Commercial’s brief “Xu Meng experiment” and a return to “family governance.” His mission is clear and daunting: stabilize performance, maintain cash flow from commercial projects, and facilitate a smooth transition during the group’s debt restructuring.

Once the storm passes, whether Poly Commercial will revert to a “professional manager” governance model like Xu Meng’s remains to be seen.