Sunac China wins a crucial battle

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

In 2025, China's real estate industry continues to explore in the deep sea. Signals from the central and local governments to "stabilize the real estate market" are frequent, attempting to inject warmth into the market, but the new housing data from 70 cities ruthlessly indicates the long and torturous process of bottoming out. The restoration of market confidence has become a significant test for all real estate companies.

Against this backdrop, any figure struggling to surface is enough to attract the attention of the entire industry. Not long ago, Sun Hongbin, Chairman of the Board of Sunac China, candidly stated at the shareholders' meeting that "Sunac has already passed the most difficult moment." This judgment was preliminarily confirmed by data in the mid-term performance report for 2025 released on the evening of August 26.

This financial report, combined with Sunac's iconic events in debt reduction, delivery, sales, and other areas in the first half of the year, outlines a clear path for a distressed real estate company to navigate through the storm and move from self-rescue to "getting ashore." In the face of widespread adversity in the industry, Sunac's demonstrated resilience of "not lying flat" is shaping a survival model worth emulating.

Debt is the sword of Damocles hanging over all distressed real estate companies. Solving the debt problem is one of the most important tasks for companies to emerge.

Sunac's response this time is quite innovative and effective. Unlike the extension strategies commonly adopted in the industry, Sunac pioneered a comprehensive restructuring plan for domestic debts, offering creditors a menu of options including cash acquisition, stock yield rights, debt-for-equity swaps, and debt extension. This innovative plan has been welcomed by creditors due to its flexibility and has now entered the implementation phase, expected to reduce nearly 70% of domestic public debt, an unprecedented effort.

In terms of offshore debt, Sunac's plan is even more thorough. By converting all debts into equity, Sunac is expected to become the first large real estate company to essentially eliminate offshore debt without using any domestic funds or resources. From the announcement of the plan to gaining support from over 75% of creditors, it took only two months, which not only resolved the debt risk but also stabilized the equity structure and team, achieving a win-win for multiple parties.

As a securities analyst stated, Sunac's debt restructuring plan is comprehensive and effective, providing a template that the industry can reference. Financial report data shows that as of mid-2025, Sunac's interest-bearing liabilities have decreased to 254.82 billion yuan, down 22.61 billion yuan compared to the same period last year. With the comprehensive completion of domestic and offshore debt restructuring, hundreds of billions of debt pressure will be further alleviated, clearing the biggest obstacle for the company to achieve a lighter operational stance.

If debt reduction is akin to stopping the bleeding, then ensuring delivery is the beginning of blood production. In the context of a significant decline in delivery volumes from several real estate companies after the peak delivery season, ensuring delivery is not only a social responsibility but also a key hub for rebuilding market confidence.

Sunac is leading the charge in this battle. The mid-term performance report shows that in the first half of the year, Sunac delivered homes to 14,900 families nationwide, with a cumulative delivery volume of 683,000 units over the past three years. More importantly, Sunac plans to basically complete the delivery assurance work by the end of 2025, aiming for over 50,000 deliveries for the entire year.

According to informed sources, the projects delivered starting next year will mainly be new homes sold after 2022, and due to strict implementation of closed management of pre-sale funds, the quality of delivery will be better guaranteed This means that Sunac is about to take the lead in completing the critical task of ensuring delivery, officially returning to a virtuous cycle model of "project development - sales - delivery," which forms a key support for the company's complete recovery. From Chongqing Changleyasong to Xi'an Lanyuefu, a number of high-quality delivery projects have become benchmarks for local living standards, providing strong evidence for the restoration of its brand credibility and market reputation.

The resolution of the two major challenges of debt and delivery has created conditions for Sunac to restore its operations, while its solid asset base lays a strong foundation for future sustained improvement.

According to the financial report, as of the first half of 2025, Sunac's total land reserve area is approximately 124 million square meters, with a large portion located in core first- and second-tier cities, offering ample and healthy structural value. High-quality land reserves are the ballast for real estate companies to navigate through cycles. On the sales front, Sunac has also achieved frequent good news thanks to its product strength. In the first half of the year, it achieved a contract sales amount of 23.55 billion yuan, ranking third among private enterprises. Notably, the Shanghai Yihua Courtyard project has accumulated sales exceeding 22 billion yuan, topping the national single-project sales champion, and its TOP series products continue to have strong appeal in core cities like Beijing and Shanghai. In the second half of the year, with the launch of heavyweight products such as the Shanghai Bund Yihua Courtyard villas and the second phase of Tianjin Meijiang Yihua Courtyard, its sales momentum is expected to continue.

Beyond its main real estate business, Sunac's property management and cultural tourism sectors also demonstrate strong operational resilience, becoming stable sources of cash flow. In the first half of the year, these two businesses generated combined revenue exceeding 5.6 billion yuan, increasing their share of the company's total revenue to 28.3%. Among them, Sunac Services achieved revenue of 3.55 billion yuan in the first half of the year, turning losses into profits, with a managed scale reaching 290 million square meters. Sunac Cultural Tourism, through the creation of IP performances such as the "Dream Back Series," continuously builds a content moat, and new projects like the Hot Snow Miracle in Zhengding have also successfully opened, contributing new growth points for the company.

Resolving debt risks, ensuring delivery, and restoring operations are three hard indicators for assessing whether a real estate company can escape danger. From this interim financial report, Sunac has made breakthrough achievements in these three major issues, which together constitute the driving force behind its "rebirth."

While the entire industry is still fighting for survival, Sunac, through a series of innovative and pragmatic combinations, has not only stabilized its own fundamentals but also outlined a path for the industry from resolving top-level risks to restoring normal operations. The most difficult moment mentioned by Sun Hongbin may have passed, but for Sunac and the entire Chinese real estate industry, the road ahead remains long. However, Sunac's example at least proves that even in adversity, with proactive self-rescue and perseverance, there is still an opportunity to be the first to emerge from difficulties and welcome its own dawn