Country Garden: Three consecutive years of losses finally turn into profit

Ask AI · How did debt restructuring help Country Garden achieve its first profitable year?

On the evening of March 30, Country Garden Group released its 2025 annual performance report.

During the reporting period, Country Garden achieved total revenue of approximately RMB 154.89 billion, down about 38.7% year over year, marking the fourth consecutive year of decline; the contracted sales amount attributable to equity holders was approximately RMB 33.01 billion, and the attributable sales area was about 4.02 million square meters.

The company’s business revenue mainly comes from property development and technology-enabled construction. Among them, the property development business, which accounts for as much as 97.2%, recorded revenue of about RMB 150.49 billion in 2025, down 38.8%%.

The remaining 2.8% comes from technology-enabled construction and other segments. In 2025, due to the downturn in the real estate market leading to a decrease in new business volume, technology-enabled construction revenue fell 45.8% year over year to RMB 1.86 billion; other businesses such as property investment and hotel operations recorded revenue of about RMB 2.543 billion, with a year-over-year decline of approximately 29.5%.

Although revenue continued to decline, Country Garden pulled off a turnaround on the profit front.

Based on net profit attributable to shareholders, from 2022 to 2024, Country Garden recorded losses of RMB 6.052 billion, RMB 178.400 billion, and RMB 32.835 billion, respectively. In 2025, its net profit attributable to shareholders turned from negative to positive for the first time; net profit attributable to the group also reached RMB 1.62 billion.

After being trapped in a loss vortex for more than three years, Country Garden finally achieved a turnaround to profitability.

Photo source: Country Garden annual report

01. Debt restructuring delivered

The core reason Country Garden achieved profitability this time lies in debt restructuring.

According to the annual report, on December 30, 2025, an offshore debt restructuring plan with a total amount of approximately USD 17.7 billion officially became effective; at the same time, an onshore debt restructuring plan involving 9 domestic bonds, with a size of about RMB 13.77 billion, was also approved in full.

In its annual report, Country Garden mentioned that the company’s main other income and net gains from debt restructuring were approximately RMB 82.13 billion, offsetting inventory impairment losses of RMB 44.507 billion, impairment losses on financial assets and financial guarantee losses of RMB 10.525 billion, as well as marketing expenses and net financial expenses of RMB 15.352 billion, and losses from joint ventures and associates.

In addition, according to official information from Country Garden, its offshore debt restructuring plan is being implemented rapidly. Based on the share issuance report disclosed on March 5, the number of new shares issued after the restructuring was approximately 14.233 billion shares, close to 51% of the issued share capital before the restructuring. Since the restructuring became effective on December 30, 2025, Country Garden has paid creditors cash consideration of approximately USD 398 million within the first working week.

The onshore restructuring plan has also been approved smoothly. It will initiate cash repurchases, and options for stocks and general creditors in sequence. The cash repurchase program with a current upper limit of RMB 450 million has already been launched, and completion is expected in April.

However, if the effects of restructuring gains are excluded, Country Garden was still loss-making in 2025. For the 2025 fiscal year, Country Garden recorded a gross loss of approximately RMB 43.118 billion (RMB 1.687 billion in 2024), mainly because the Group recognized net impairment losses of approximately RMB 44.507 billion for properties under construction and completed properties held for sale. Excluding the impairment losses of such properties, Country Garden’s gross profit for 2025 was approximately RMB 1.389 billion.

While net profit increased, Country Garden’s liabilities also declined significantly. By the end of 2025, Country Garden’s total liabilities were RMB 767.861 billion, down RMB 216.728 billion from the end of 2024. Of this, interest-bearing liabilities were about RMB 147.959 billion, down RMB 105.529 billion from 2024, a decline of approximately 42%. Its capital-to-liabilities ratio decreased from about 81.4% in 2024 to about 74.5% as of December 31, 2025.

In terms of the borrowing structure, among bank loans and other borrowings, approximately RMB 107.184 billion, RMB 16.233 billion, and RMB 14.08 billion are due to be repaid within one year, between one and five years, and after five years, respectively. Most of these borrowings are secured by certain of Country Garden’s properties, plants and equipment, investment properties, properties under construction, and financial assets as collateral.

From the asset situation, as of the end of 2025, Country Garden’s total assets were RMB 812.120 billion, and its net assets were RMB 44.3 billion. In terms of asset revitalization, since 2022 Country Garden has actively promoted the disposal of various types of assets, and has cumulatively recovered more than RMB 70 billion in funds, covering core and non-core assets, equity investments, and so on.

02. Delivering homes to ensure delivery

As the main business of Country Garden, its property development business saw a clear downturn in 2025 performance.

According to the annual report, revenue from this business fell from approximately RMB 245.719 billion in 2024 to RMB 150.490 billion in 2025, a decline of nearly 40%. Country Garden explained that the main reason was the reduction in property delivery volume. In addition, in 2025, the average selling price (excluding VAT) recognized for delivered properties by Country Garden was approximately RMB 6,908 per square meter.

From the company’s own perspective, Country Garden’s delivery volume contracted. However, looking at the industry as a whole, Country Garden’s performance in delivering homes to ensure delivery is clearly ahead. In 2025, Country Garden completed deliveries of approximately 170,000 units of homes, with a cumulative delivered gross floor area of about 19.82 million square meters, covering 204 cities in 28 provinces nationwide. Over the three years from 2023 to 2025, its cumulative total deliveries were nearly 11.5 million units, and its delivery volume has continued to rank first in the industry on third-party lists.

As for Country Garden’s next plans, ensuring delivery of homes is its top priority.

In February of this year, at Country Garden’s annual meeting, Chairman Yang Huiyan proposed defining 2026 as “the year to wrap up the delivery of homes,” and set out a clear timetable. The aim is to complete most of the home-delivery tasks by mid-2026, thereby freeing up more effort to repair the balance sheet of assets and debts and to restore normal operations. The key sign that normal operations have resumed is that operating cash flow turns positive, with the ultimate goal that both the company’s overall cash flow and profits are positive.

Meanwhile, Country Garden is also gradually shifting more effort and resources toward other businesses.

At a management meeting in early March, Yang Huiyan pointed out that looking ahead to the next 3–5 years, Country Garden’s strategic core will focus mainly on “building core competitiveness.” For the main business of property development, it will advance the iteration of fourth-generation housing and implement product designs adapted to the needs of different groups, such as aging-friendly features and pet-friendly concepts, while leveraging Country Garden’s advantages across the entire industrial chain to connect product design, property services, and other links.

Against this backdrop, Country Garden’s entrusted construction management business—one of its “two wings”—has also made new progress. On March 21, Country Garden and the Guangzhou Baiyun District Administration for Government Services and Data Management formally signed an ecological cooperation framework agreement. In the future, it will integrate core resources and capabilities from its business segments including entrusted management and entrusted construction, construction technology, and property services, and deeply embed itself into Baiyun District’s “Zhicheng” (smart city) development layout, using a “technology + industry” dual-engine drive to help Baiyun District build a nationwide leading application demonstration benchmark.