This article only represents the author's own views.
Country Garden Holdings Co. Ltd. (2007.HK), the property developer once teetering on the brink of bankruptcy, is seeing some glimmers of daylight after its near-death experience. Its latest annual results show it posted a surprising profit of 3.26 billion yuan ($472 million) last year, marking a huge leap forward from its 32.8 billion yuan loss in 2024.
While that headline profit looks good at first glance, the improvement was entirely devoid of any new growth, owing instead to non-cash gains of 82.1 billion yuan from its debt restructuring. In effect, the restructuring delivered purely paper profits, not a turnaround in its core operations. The reality is that property sales remain very sluggish, with revenue from property sales plunging 38.7% year-on-year to 154.9 billion yuan last year. And after including 44.5 billion yuan in impairment provisions for properties under construction and completed properties held for sale, the company reported a gross loss of 43.1 billion yuan for the year.