For SUNAC China, 2025 marks a pivotal turning point as it emerges from its darkest period. As a representative private property developer navigating the industry's risk-clearance phase, the company has released its first full-year financial results following the comprehensive completion of its domestic and offshore debt restructuring, after years of intense efforts to address its debt issues.
On March 27, SUNAC (01918.HK) announced its audited full-year 2025 results, which clearly illustrate the company's dual reality. Annual revenue reached 45.12 billion yuan, down 39% year-over-year, while the net loss attributable to shareholders narrowed significantly to 12.33 billion yuan from 25.7 billion yuan in 2024, a reduction of 52%.
On one hand, SUNAC has fundamentally resolved its debt risks, with a notably optimized financial structure standing out as a major achievement. On the other hand, core operational challenges persist, including continued contraction in its primary property development business, lack of profitability, and tight cash flow, indicating that the path to recovery remains fraught with difficulties.
The clearance of debt risks has been a critical focus. 2025 was deemed the "decisive year" for SUNAC's debt resolution. After several years of effort, the company successfully implemented its domestic and offshore debt restructuring plans within the year. On December 23, the offshore debt restructuring plan took full effect, coinciding with the finalization of the onshore restructuring. The approach innovatively utilized a full debt-to-equity swap model, combined with various other innovative instruments, to address existing debt risks.
This move not only pulled SUNAC back from the brink of default but also set a precedent for debt resolution among private developers. By converting creditors into shareholders, the company aligned interests and bought crucial time for operational recovery, effectively trading "time for space."
Key financial metrics demonstrate the success of these efforts. By the end of 2025, SUNAC's interest-bearing debt had decreased substantially to 188.26 billion yuan from 259.67 billion yuan at the end of 2024, a single-year reduction of 71.41 billion yuan. Compared to the peak debt level in 2021, the cumulative reduction reached 133.45 billion yuan, essentially clearing debt at the listed company level.
Furthermore, a one-time gain of 32.97 billion yuan resulting from the completion of the offshore debt restructuring directly contributed to halving the company's losses, serving as the primary reason for the significant narrowing of the net loss attributable to shareholders. This led to a fundamental repair of the balance sheet. SUNAC's net assets attributable to shareholders stood at 34.17 billion yuan at the end of 2025, remaining positive even after accounting for 17 billion yuan in asset impairments, thereby avoiding the risk of insolvency and significantly enhancing the resilience of the company's capital structure.
The annual report explicitly states that the substantial narrowing of losses in 2025 was due to the completion of the offshore debt restructuring, alongside a significant reduction in interest-bearing debt. However, impacted by the ongoing downturn in the overall property market, the group's annual revenue was approximately 45.12 billion yuan, a decrease of 39% year-over-year. A gross loss of approximately 640 million yuan was recorded, compared to a gross profit of 2.89 billion yuan in 2024, a decline of 122.1%. The net loss attributable to shareholders was 12.33 billion yuan, narrowing significantly by 52% year-over-year, primarily driven by the non-recurring gain from debt restructuring. As of the end of 2025, the group's total equity was approximately 46.84 billion yuan, with equity attributable to shareholders at about 34.17 billion yuan, indicating that the core asset base remains fundamentally stable.
Concurrently with debt resolution, SUNAC has worked to revitalize stalled projects through methods such as introducing partners, equity transfers, and resuming construction, aiming to alleviate cash flow pressure. During the year, the company successfully revitalized 12 key property projects, expecting to recoup 11.2 billion yuan, with 8.58 billion yuan received by year-end. Projects like Beijing SUNAC One Park, Wuhan Optics Valley One Park, and the second phase of Tianjin Meijiang One Park have resumed construction and begun sales, building a pipeline of quality inventory for future revenue.
Ensuring project delivery is central to rebuilding developer credibility. In 2025, SUNAC, together with its joint ventures and associates, delivered approximately 54,000 homes. Over the past four years, cumulative deliveries have exceeded 722,000 units, largely fulfilling the delivery commitment.
Amid the persistent property market slump, SUNAC's diversified businesses, including property services and cultural tourism, demonstrated notable operational resilience over the past year, providing crucial support to counterbalance the decline in the core development business and stabilize overall revenue.
SUNAC Services (01516.HK), the core property management platform, achieved a breakthrough in 2025, reporting revenue of 6.82 billion yuan and a net profit attributable to shareholders of 200 million yuan, returning to profitability. By the end of 2025, its managed gross floor area reached 260 million square meters, focusing on core first- and second-tier cities and expanding in the mid-to-high-end residential and commercial property markets.
The cultural tourism segment (encompassing theme parks, commercial properties, hotels, and snow parks) generated revenue of 4.73 billion yuan in 2025. Although the sector faces pressure from industry-wide adjustments and intensified competition, it maintained a gross margin of 8.3%, serving as a stable revenue stream. The parks business focused on outdoor theme parks and live performances, enhancing immersive consumer experiences through a "performance + commerce + scenery + technology" model to develop flagship tourism products. The commercial property segment, centered on tourism-oriented retail, introduced distinctive brands and innovative marketing campaigns, achieving growth in both customer traffic and sales. The snow parks business solidified its leading position, with new facilities opening in Zhengding and Shenzhen, bringing the total number of operational snow parks to 11. New projects were also secured in Wenzhou and Hangzhou, indicating continued expansion.
In 2025, revenue from diversified businesses accounted for 25.3% of the group's total revenue, up from 16.3% the previous year. This growing contribution has effectively shared the operational burden as the core property business shrinks, acting as a vital "stabilizer" for the company during a challenging period.
Despite breakthroughs in debt restructuring and resilience in diversified operations, SUNAC's core operational challenges remain fundamentally unresolved. The primary property development business continues to struggle deeply.
Total revenue for 2025 was 45.12 billion yuan, down 39% year-over-year and representing a decline of over 80% from the peak of 230.59 billion yuan in 2020. Revenue from property sales was 33.05 billion yuan, accounting for 73.3% of total revenue and falling sharply by 46% year-over-year, constituting the main drag on overall revenue. This decline was primarily due to decreases in both delivered area and average selling price: delivered area fell by 23.1% year-over-year, while the average selling price of revenue-recognized projects dropped by 29.8%.
The sales downturn continued. The group, together with its joint ventures and associates, achieved full-year contracted sales of 36.84 billion yuan, down 21.8% year-over-year. Sales area was approximately 1.453 million square meters, a decrease of 35.74%. Although the average selling price rose 21.5% to 25,350 yuan per square meter, driven by core projects in prime cities like Shanghai's The Bund One Park and Beijing SUNAC One Park, the overall sales volume has fallen to its lowest level in nearly a decade, representing only about 6% of the peak sales volume.
Profitability shows signs of "superficial improvement but underlying weakness." The net loss attributable to shareholders narrowed by 13.37 billion yuan to 12.33 billion yuan, a 52% improvement and the best performance since losses began in 2021. However, this reduction was not due to operational improvement but relied heavily on the 32.97 billion yuan one-time gain from debt restructuring, which offset most of the operating loss.
SUNAC reported a gross loss of approximately 640 million yuan for 2025, with a gross margin of -1.4%. The decline in gross profit and margin was mainly attributable to the decrease in property sales revenue, a lower proportion of high-margin projects recognized during the period, and increased provisions for property impairments compared to the previous year.
Regarding cash flow, the total cash balance at the end of 2025 was 12.01 billion yuan, down from 19.75 billion yuan a year earlier. Unrestricted cash was only 5.68 billion yuan, compared to 7.73 billion yuan at the end of 2024, indicating continued tightness in covering short-term debt and operational expenses.
A significant point of note is that in the 2025 annual report, the external auditor, BDO Limited, issued an "unable to express an opinion" report, highlighting several significant uncertainties regarding the company's ability to continue as a going concern.
The auditor's primary reservations stem from SUNAC's net loss of 13.71 billion yuan for 2025 and a net current liability position of 74.46 billion yuan as of year-end. The group had current borrowings of 154.01 billion yuan and non-current borrowings of 34.25 billion yuan, against total cash of only 12.01 billion yuan, indicating a severe mismatch between cash flow and debt obligations. As of December 31, 2025, the group had approximately 107.3 billion yuan in overdue borrowings, with about 37.06 billion yuan subject to potential acceleration by creditors. By the date of the report's issuance, overdue borrowings had increased to 110.8 billion yuan, with 32.25 billion yuan facing acceleration risk. Additionally, SUNAC is involved in numerous lawsuits and arbitrations related to debt disputes and project collaborations, further compounding operational uncertainties.
In response to the auditor's concerns, SUNAC promptly issued an announcement detailing a targeted action plan. This includes: actively negotiating loan extensions with lenders, having already secured extensions for 2.33 billion yuan during the year; raising funds through new financing, special loans for project delivery, introducing partners, and asset disposals, with 120 million yuan obtained via these channels earmarked for project development; proactively communicating with creditors to resolve pending domestic litigation amicably; and accelerating pre-sales and sales of available and completed properties to enhance sales collection and accounts receivable recovery.
SUNAC's board of directors has committed to fully implementing these actions to address the issues raised by the auditor promptly and will provide updates to shareholders and investors in due course.
SUNAC's 2025 results present a clear dichotomy. The positive aspects include successful risk clearance and structural optimization, allowing the company to survive its most critical period and setting a benchmark for industry debt resolution. The negatives involve persistent operational contraction, lack of profitability, and cash flow constraints, indicating it has not yet crossed the threshold into recovery.
For the broader real estate industry, SUNAC's experience epitomizes the challenges facing private developers. Escaping the debt quagmire was the most urgent survival task of recent years, but operational recovery is inevitably a prolonged and arduous journey. The industry has moved beyond its high-growth golden era. A sustainable path forward requires a fundamental return to the essence of providing housing and embracing稳健 development principles,彻底 abandoning the old model of high leverage and rapid turnover, while focusing on enhancing core competencies in product quality, delivery capability, and operational efficiency to build a sustainable and diversified profit model.
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