COUNTRY GARDEN's New Game

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

As the wheels of history roll over China's real estate "golden era," every real estate company is searching for its own coordinates. Once renowned for its scale and speed, the giant Country Garden is now writing an epic about weathering the storm with a remarkably resilient posture.

The interim report released on August 29 serves as a prism reflecting its navigation through the industry storm. During the reporting period, Country Garden achieved revenue of approximately 72.57 billion yuan, with total assets around 909.3 billion yuan, exceeding total liabilities, and net assets consistently maintaining a positive value of about 23.9 billion yuan, outlining the company's fundamentals amidst turbulent waves. However, a net loss of approximately 19.65 billion yuan also reveals the growing pains of transformation and the harshness of the market.

Behind the numbers lies a clear strategic pivot: taking "ensuring delivery of homes" as the bottom line of social responsibility, debt restructuring as the key to navigating the cycle, and "one body with two wings" as the vision for future development. This is not only Country Garden's self-rescue but also a microcosm of the industry's transition from "clearing" to "restructuring."

During the deep adjustment period of the industry, the phrase "ensuring delivery of homes" carries immense weight. It is not only a touchstone for measuring corporate credit but also the "top priority" that Country Garden must uphold.

In the first half of 2025, Country Garden and its joint ventures delivered a cumulative total of approximately 74,000 homes, with over 1.7 million homes delivered in the past three years, consistently ranking first in delivery volume on third-party lists. Behind this is the anticipation of 1.7 million families and the social credit upheld by the company under extreme difficulties.

To fulfill its commitments, Country Garden has taken multiple measures to increase revenue and reduce expenditure. Since 2022, Country Garden has disposed of various assets, recovering over 65 billion yuan. This includes selling equity in several investment projects such as Wanda Commercial Management, Changxin Technology, and Blue Arrow Aerospace, focusing funds on the core business of ensuring delivery.

As the delivery work progresses, the related rigid capital demand has gradually decreased, and the overall financial pressure is expected to ease in the future.

If "ensuring delivery of homes" is the "ballast stone" stabilizing operations, then debt restructuring is the "rudder" determining whether the company can navigate out of the deep waters.

Country Garden's offshore debt restructuring has made breakthrough progress. As of August 18, over 77% of the holders of existing public notes by principal amount have joined the restructuring agreement. Country Garden has also signed a restructuring support agreement with a coordination committee representing 49% of the principal of the syndicated loan, with the main terms already agreed upon. Country Garden is confident in completing the overall restructuring work within this year.

The significance of this restructuring is profound. With full subscription of the plan, it is expected to reduce interest-bearing debt by approximately 11.7 billion USD (about 84 billion yuan), significantly lowering leverage.

After the restructuring, the new debt financing cost is expected to drop to 1.0%-2.5%, with debt maturities extending up to 11 years, greatly optimizing the debt structure and providing valuable time and space for operational recovery. Additionally, after the restructuring is completed, it is expected to increase net assets by up to 70 billion yuan, further thickening the safety cushion. This key development will help Country Garden achieve significant deleveraging and "lighten the load" for medium- to long-term development.

Bidding farewell to the old era of rapid advancement, Country Garden's future operational philosophy focuses on three core areas: "ensuring delivery of homes, stabilizing assets and debts, and ensuring operations." Meanwhile, against the backdrop of "accelerating the construction of a new model for real estate development," the company is exploring new growth curves based on the "one body with two wings" strategy "The two wings" are gradually becoming an important force in the transformation. One wing is technology construction, with its subsidiary Bozhilin having 28 types of construction robots put into commercial application, with a cumulative delivery of over 4,600 units, and intelligent construction services covering 34 provincial-level administrative regions across the country. The other wing is entrusted construction management, with its subsidiary Phoenix Zhituo having undertaken over 200 projects and managed an area of nearly 20 million square meters. In the first half of 2025, Phoenix Zhituo's new contract scale ranked tenth on the Yihan Think Tank list, and its light asset model is gradually maturing.

Of course, challenges remain severe. The loss of 19.65 billion yuan in the first half of the year is due to a decrease in project settlement scale and an increase in asset impairment, reflecting the overall pressure on the industry. However, this also indicates that the industry is at a critical stage of risk clearing and structural reorganization.

Positive signals are also emerging. On August 22, COUNTRY GARDEN was included in the Hang Seng Composite Index, which not only marks its achievement of the Hong Kong Stock Connect threshold but also signals the restoration of market confidence and improvement in liquidity. Analysts point out that this is a key step in its path to market recovery, helping to stabilize stock prices and improve liquidity.

Historically, the development of the industry has been non-linear. China's real estate is bidding farewell to extensive growth and entering a new stage that emphasizes quality and sustainable development.

From safeguarding the "delivery of houses" bottom line, to completing debt restructuring, and then to laying out the "one body and two wings," COUNTRY GARDEN has demonstrated the strategic determination and resilience of leading real estate companies in adversity. The journey through the storm is still long, but a healthier and more sustainable future is being actively shaped