On March 30, the state-owned infrastructure giant China Railway Construction Corporation Limited (CRCC) released its 2025 financial report. During the reporting period, the group achieved revenue of 1.03 trillion yuan, a year-on-year decrease of 3.50%. Net profit attributable to shareholders was 18.363 billion yuan, down 17.34% compared to the previous year. Notably, the real estate segment was a significant drag on performance. In 2025, CRCC's real estate platform, China Railway Construction Real Estate Group (CRCC Real Estate), reported a net loss of 3.135 billion yuan.
Unlike the well-known developers such as Vanke, Evergrande, and Country Garden, CRCC Real Estate is not directly listed and maintains a relatively low profile. However, according to rankings from CRIC and the China Index Academy, CRCC Real Estate's full-scale sales for 2025 reached 73.34 billion yuan, placing it 12th in the industry and marking it as a "dark horse" among state-owned enterprises. Despite this, the pressure on its leader, Sun Hongjun, is substantial. Since Sun Hongjun assumed the role of Chairman in 2024, the company's revenue has continued to decline, and profits turned into a loss in 2025. By the end of the third quarter of 2025, the company's short-term funding gap exceeded 20 billion yuan. The direction this accelerating "dark horse" will take remains uncertain.
**1. Expanding Land Acquisition Against the Trend; 2025 Sales Drop by 23.1 Billion Yuan**
Compared to the recently prominent "Eight Subsidiaries of China State Construction," fellow "dark horse" CRCC Real Estate has maintained a lower profile, yet it has a significant background. Established in April 2007 as China Railway Real Estate Development Co., Ltd. (hereinafter referred to as China Railway Real Estate) with an initial registered capital of 500 million yuan, the company was initially held by China Railway Construction Corporation (40%), China Railway Construction Group Co., Ltd. (20%), China Railway 12th Bureau Group Co., Ltd. (20%), and the Fourth Survey and Design Institute of Railways (20%). After two equity transfers and a name change, China Railway Real Estate became a wholly-owned subsidiary of CRCC and was renamed China Railway Construction Real Estate Group Co., Ltd. (CRCC Real Estate). By the end of 2025, CRCC's total assets exceeded 2 trillion yuan, and it is one of the 16 central enterprises approved by the State-owned Assets Supervision and Administration Commission (SASAC) focused primarily on real estate.
Backed by an infrastructure giant of this scale, CRCC Real Estate developed product series such as "Xi Pai," "Jiangnan," "International," and "Yu," and embarked on a path of counter-cyclical expansion during the housing market downturn. Data from the China Index Academy shows that from 2022 to 2023, CRCC Real Estate's equity acquisition amounts were 37.1 billion yuan and 40.4 billion yuan respectively, placing it within the TOP 10 for national equity land acquisition spending. Concurrently, the company's industry ranking rose from 26th in 2021 to 15th in 2022, maintaining the 15th position in 2023.
Despite the advantage of its state-owned enterprise status and rapid advancement in industry rankings, CRCC Real Estate has not been immune to the challenges of slow sales during the deep adjustment phase of the real estate market. For instance, according to Beike, the project "China Railway Construction · Beijing Wutong Qianshan" in Pinggu, Beijing, completed in 2021, had invested 1.805 billion yuan by the end of September 2025, with sales of only 678 million yuan, representing a sales progress of just 35.69%. The company attributed the difficult sales to the project's remote location and high competition. Similarly, the Chengdu project "China Railway Construction · Chengdu Xi Pai Huanhua," which commenced in 2018, had invested 3.021 billion yuan by the end of September 2025, with sales of 1.895 billion yuan, achieving a sales progress of 69.37%, with remaining commercial spaces, apartments, and parking spaces unsold.
This inventory digestion risk is gradually becoming apparent for CRCC Real Estate. According to CRIC data, the company's full-scale sales were 128.1 billion yuan in 2022, a 10% year-on-year decrease. In 2023, sales further declined by 5% to 121.63 billion yuan. On the CRIC and China Index Academy rankings, the company's full-scale sales dropped to 96.44 billion yuan in 2024, falling out of the "100-billion-yuan club." By 2025, sales fell further to 73.34 billion yuan, a decrease of 23.1 billion yuan. The pressure from this continuous sales decline is undoubtedly keenly felt by the company's leaders, Chairman Sun Hongjun and Deputy General Manager and Vice Chairman Chen Jianjun.
On March 23 of this year, both Sun Hongjun and Chen Jianjun attended a CRCC Real Estate meeting—the 2026 Operational Work Conference. The meeting set the tone: to go out, engage the market, and fully sprint towards the annual operational targets. Specifically, this involves stabilizing the fundamental real estate development business, leveraging less capital to initiate more projects, rapidly scaling up the "second growth curve" of light-asset business, achieving economies of scale through effective expansion, and vigorously cultivating strategic new businesses for quicker implementation. In short, to achieve scale, CRCC Real Estate intends to accelerate its pace.
**2. Chairman Sun Hongjun's Tenure Under Two Years; 2025 Net Loss of 3.135 Billion Yuan**
The year 2024 marked a significant turning point for CRCC Real Estate. In late July 2024, the company announced that Li Xinglong would step down as Chairman and Party Committee Secretary due to work changes, without an immediate appointment of a new chairman. It was not until September 2024 that the parent company, CRCC, appointed Sun Hongjun as the new Party Committee Secretary and Chairman. Public information indicates that Sun Hongjun was transferred from a sister company of CRCC Real Estate, having previously held long-term positions at China Railway Construction Group.
Notably, his two predecessors, Wu Shiyan and Li Xinglong, had both spent many years at CRCC Real Estate, gradually rising to the positions of General Manager and Chairman. During the more than one-month period when the chairman position was vacant, General Manager, Deputy Party Committee Secretary, and Vice Chairman Chen Jianjun oversaw comprehensive operations but did not advance further. The reason for breaking the internal promotion tradition for the chairman appointment remains unclear—whether it was due to the parent company's dissatisfaction with past performance or other arrangements. Whether the parent company set new performance requirements for Sun Hongjun upon his appointment is also unknown, as inquiries on these matters received no response by the time of publication.
However, the results indicate that since Sun Hongjun took office during a real estate market downturn, CRCC Real Estate's performance has not improved but has instead declined sharply. From a sales perspective, CRIC data shows that the company's sales fell out of the 100-billion-yuan club in 2024 and dropped by over 20 billion yuan in 2025. This directly contributed to the decline in revenue and profit. Data disclosed by CRCC Real Estate shows that in 2024, the company achieved revenue of 46.646 billion yuan, a year-on-year decrease of 26%, and net profit attributable to shareholders was 5.3959 million yuan, a drastic 95% plunge.
In contrast to the meager profit for CRCC Real Estate itself, minority shareholders received substantial returns. CRCC Real Estate disclosed that minority shareholders took profits amounting to 1.236 billion yuan in 2024. Furthermore, according to the financial report of the parent company CRCC, CRCC Real Estate reported revenue of 46.466 billion yuan for 2025, a slight decrease compared to the same period in 2024, and a net loss of 3.135 billion yuan, shifting from profit to loss. It is noteworthy that in the company's third-quarter 2025 financial statements, revenue for the first nine months was 14.354 billion yuan. By comparison, the company achieved approximately 32.1 billion yuan in revenue in the fourth quarter of 2025, a disparity that surprised observers. The reasons for this significant difference between the first three quarters and the fourth quarter remain unexplained, as inquiries on this and the causes for the 2025 loss received no response.
**3. Short-Term Funding Gap Exceeds 20 Billion Yuan; Inventory Stands at 146.1 Billion Yuan**
Three days prior to the 2026 Operational Work Conference, CRCC Real Estate held a financial work conference. This meeting explicitly required continued cost reduction and efficiency improvement in 2026, with a full effort to ensure the safety of the capital chain. This directive largely stems from the substantial financial pressure the company currently faces. By the end of the third quarter of 2025, the company's interest-bearing liabilities amounted to 87.461 billion yuan. Of this, interest-bearing liabilities due within one year totaled 32.134 billion yuan. Additionally, there were accounts payable of 15.939 billion yuan. During the same period, the company's monetary funds were only 11.554 billion yuan. A rough calculation based on monetary funds and interest-bearing liabilities due within one year reveals a short-term funding gap of over 20 billion yuan. CRCC Real Estate acknowledged that despite retaining relatively sufficient monetary funds, the increasing scale of debt maturing in the near future still poses certain short-term repayment pressures.
The company holds a massive inventory awaiting monetization. By the end of September 2025, the book value of CRCC Real Estate's inventory stood at 146.1 billion yuan, accounting for 63.63% of total assets. Accelerating the turnover of this inventory could rapidly improve cash flow. However, the current real estate market is in a period of deep adjustment, and even with the backing of a state-owned enterprise, CRCC Real Estate cannot escape the impact of the market environment, as evidenced by the frequent declines in sales.
To alleviate funding pressure, the company has been attempting to accelerate financing since the beginning of 2026. On March 10, CRCC Real Estate announced the completion of a 2.34 billion yuan corporate bond issuance with a coupon rate of 2.76%, of which 330 million yuan was subscribed by company affiliates. The proceeds are intended entirely to replace the principal of two corporate bonds maturing in 2026. Prior to this, in February, the company issued 1.01 billion yuan in medium-term notes with an interest rate of 2.43%, planned for repaying the company's own funds used for the "23 Iron Construction Property MTN001" bond.
Maintaining financing capability during the real estate downturn is challenging. However, whether further increasing leverage will exacerbate debt repayment pressure, how the current short-term funding gap will be resolved, and whether the parent company CRCC will provide support remain open questions. Inquiries on these points received no response.
The parent company, CRCC, also faced performance pressures in the past year. In its 2025 financial report, CRCC Chairman Dai Hegen emphasized that 2026 is the inaugural year of the "15th Five-Year Plan" and a critical year for CRCC to accelerate transformation and upgrading, comprehensively improve quality and efficiency, and develop towards excellence and innovation, requiring all-out efforts to ensure a successful start. In this "decisive battle," it is likely that CRCC does not wish to report another decline in both revenue and profit for 2026. Whether the loss-making CRCC Real Estate can avoid being a drag on performance will depend on the results delivered by Sun Hongjun.
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