In the midst of persistent pressure in the Chinese real estate industry, the debt crisis facing real estate companies is escalating. Among them, China Fortune Land Development (CFLD) recently announced its failure to repay a debt of 23 billion yuan, while Rongsheng Development is also deeply mired in debt, with over 1.1 billion yuan of unpaid debts and facing multiple lawsuits.
According to the debt restructuring progress announcement released by CFLD on the evening of May 16, as of April 30, 2025, the company has restructured approximately 192.273 billion yuan of the total 219.2 billion yuan financial debt as part of its debt restructuring plan, involving domestic and foreign bonds and various financing instruments.
However, despite the significant progress in the restructuring, CFLD still faces a substantial amount of outstanding debt, with a cumulative default amount of 23.03 billion yuan (excluding interest) as of that date, highlighting the immense pressure the company is under in terms of debt repayment.
From a cash flow perspective, CFLD and its subsidiaries added 350 million yuan of overdue debt in April, indicating that liquidity pressure still exists. In addition, the addition of multiple arbitration and litigation cases amounting to 1.419 billion yuan further adds uncertainty to the company’s future operations.
Financial data also raises concerns. CFLD reported a net loss of 4.817 billion yuan for the full year of 2024, and a further loss of 2.701 billion yuan in the first quarter of 2025, indicating a worsening trend in losses and a challenge in restoring profitability in the short term.
Amidst a downturn in the Chinese real estate market, high leverage risks, contracting demand, and policy regulation, the prospects for CFLD to return to profitability in the near term remain bleak despite its active efforts at self-rescue.
CFLD is not alone in facing financial woes, as the debt crisis in the Chinese real estate industry is spreading to more enterprises. Another real estate company, Rongsheng Development, disclosed its dire financial situation on May 16. The announcement revealed that Rongsheng Development had added overdue unpaid debts amounting to 1.105 billion yuan, including 665 million yuan in mid-term notes and interest.
In terms of legal disputes, Rongsheng Development is involved in two major cases with Langfang Bank, with a total claim amount exceeding 200 million yuan. Additionally, the company is facing several other lawsuits totaling 1.333 billion yuan, close to 9% of its net assets. The auction of shareholders’ holdings and some failed auctions also reflect investors’ lack of confidence in the company’s future outlook.
According to financial reports, Rongsheng Development reported a net loss of approximately 8.444 billion yuan in 2024, with a staggering year-on-year increase of 2293.07%; the net loss excluding non-recurring gains and losses was around 8.049 billion yuan, marking a significant surge of 2622.1%.
Research data from the China Index Research Institute previously showed that in the first quarter of this year, the total sales amount of the top 100 real estate companies in China decreased by 9.8% year-on-year. The total sales amount for the full year of 2024 decreased by 30.6%, with the leading sales champion Poly Development experiencing a 23.5% decline in sales and a 58.43% drop in net profit.
In recent years, as the Chinese economy has slowed down, demand in the real estate market has shrunk, policies have become stricter, and pressure from the “Housing for the People” task has intensified, leading real estate companies to face challenges of broken funding chains and debt default risks. The multitude of creditors, complex debt structures, and difficulties in asset disposal further reduce the success rate of restructuring for real estate companies.