Amid accelerated progress in its offshore debt restructuring, Country Garden (02007.HK) has issued a long-awaited profit forecast. On March 24, the company's stock opened higher, reaching an intraday high of HK$0.325 before closing at HK$0.32, up 6.67% for the day, with a total market capitalization of HK$13.638 billion.
The previous evening, Country Garden announced that it expects to achieve a profit of approximately 1 to 2.2 billion yuan for 2025, following a significant loss of 35.145 billion yuan in 2024. This sharp contrast quickly drew market attention, suggesting that the former "universe's top property developer" might be staging a comeback.
However, a closer look at the source of this profit reveals it is more a result of financial repair than operational recovery.
From a financial perspective, Country Garden's performance over the past three years has been challenging. From 2022 to 2024, the company's revenue declined for three consecutive years, reaching 430.371 billion yuan, 401.015 billion yuan, and 252.756 billion yuan, respectively. During the same period, the company recorded annual losses of 2.962 billion yuan, 200.962 billion yuan, and 35.145 billion yuan, accumulating a total loss of 239.069 billion yuan over three years.
Previously, the company was an undisputed leader in the industry. Founded in 1992 in Shunde, Guangdong, by Yang Guoqiang, Country Garden was listed on the Hong Kong Stock Exchange in April 2007, raising HK$14.849 billion in its IPO, setting a record for fundraising by a mainland Chinese property developer at the time. In 2019, the company achieved revenue of 485.908 billion yuan and a profit of 61.202 billion yuan; in 2021, its revenue reached 523.064 billion yuan with a net profit of 40.982 billion yuan. According to data from CRIC Research, Country Garden's full-scale sales amounted to 788.8 billion yuan in 2020, ranking first in the industry. After topping the sales charts with approximately 550.8 billion yuan in contracted sales in 2017, the company remained China's top-selling property developer for six consecutive years until 2022.
A turning point occurred in 2023. In August of that year, the company failed to pay interest on two US-dollar bonds totaling $22.5 million, triggering a credit crisis. Its interim report for 2023 showed a loss of 51.461 billion yuan for the first six months, with approximately 108.703 billion yuan in debt maturing within the next 12 months. In October 2023, Country Garden announced it had not paid a matured principal amount of HK$470 million, formally declaring default.
Under debt pressure, Country Garden's profit forecast for 2025 appears particularly notable. The company explicitly stated that the return to profitability is primarily due to non-cash gains from debt restructuring, rather than improvements in its core business. Excluding these effects, the gross profit margin of its development business remains under pressure, and impairments on certain assets would still result in a loss. In other words, this is a typical accounting profit, driven by book gains from debt restructuring rather than a recovery in operational profitability.
Operational data indicates a limited recovery. In 2025, Country Garden achieved contracted sales of approximately 33.01 billion yuan, corresponding to a sales area of about 4.03 million square meters, a significant contraction from its peak. Nevertheless, the company delivered nearly 170,000 housing units, making delivery one of its most critical tasks at this stage. Yang Huiyan, Chairperson of the Board and daughter of Yang Guoqiang, has defined 2026 as the "final year for ensuring housing deliveries," aiming to complete most deliveries by mid-year as a prerequisite for gradually repairing the balance sheet and achieving positive operating cash flow. The realization of this goal will determine whether the company can transition from financial repair to operational recovery.
A more crucial change for Country Garden lies in its debt situation. On December 30, 2025, the restructuring of approximately $17.7 billion in offshore debt officially took effect. Earlier, from September 9 to December 3, 2025, restructuring plans for nine onshore bonds totaling about 13.77 billion yuan were all approved. Thus, the restructuring of its domestic and offshore debts has largely been implemented.
Under the offshore debt restructuring plan, if all options are fully subscribed by creditors, Country Garden expects to reduce its debt by approximately $11.7 billion and may recognize restructuring gains of up to about 70 billion yuan. This is the primary reason for the anticipated shift from loss to profit in 2025. In the first working week after the offshore debt restructuring took effect, Country Garden paid creditors approximately $398 million in cash consideration, representing about 2% of the total principal, to demonstrate execution capability.
The restructuring plan also exhibits considerable flexibility, offering a combination of instruments including new notes, convertible bonds, and mandatory exchangeable bonds to cater to creditors with different risk appetites, in addition to cash payments. Meanwhile, the conversion of Country Garden's convertible bonds is progressing. Data shows that as of March 20, 2026, the company's total share capital was 42.618 billion shares, an increase of approximately 47.36% from 28.921 billion shares at the end of 2025. This significant expansion in share capital implies dilution of existing shareholders' equity, but for Country Garden, debt resolution and housing delivery remain the top priorities.
Currently, Yang Huiyan, through her controlled company Concrete Win Limited, holds approximately 29.409 billion shares of Country Garden, representing a 69.02% stake, maintaining absolute control.
Additionally, the judicial pressure on Country Garden has eased. Last month, the Hong Kong High Court dismissed a winding-up petition against the company. Shortly before the winding-up alert was lifted, Yang Huiyan and two other executive directors were publicly criticized by the Shanghai Stock Exchange for failing to disclose debt overdue matters promptly, but the company stated this does not affect their continued roles.
From an industry perspective, Country Garden is not alone. On December 23, 2025, the offshore debt restructuring of Sunac China (01918.HK) officially took effect, with approximately $9.6 billion of existing debt fully discharged and released. On December 29, 2025, CIFI Holdings Group (00884.HK) announced that its offshore debt restructuring plan, involving principal and interest totaling about $8.1 billion, had become effective. The concentrated implementation of debt restructuring plans for several developers marks a further step into the practical phase of industry risk resolution.
However, compared to stemming the bleeding on the debt side, operational recovery will require more time. Last week, market rumors suggested Country Garden was "massively recalling former employees," but the company clarified that rehiring was only for a small number of specific positions. In fact, its workforce has shrunk dramatically from approximately 131,400 at the end of 2018 to about 17,900 by mid-2025, a reduction of about 113,500 employees over six and a half years.
In conclusion, while this return to profitability is aided by debt restructuring, it still represents positive news. For Country Garden, debt restructuring is only the first step; the key going forward remains generating revenue from property sales. Returning to the scale and profitability of its "top developer" days will take time. However, by steadily strengthening its fundamentals step by step, this profit could mark a new starting point for Country Garden's journey toward stable operations.
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