Chinese real estate sector: 60% of companies suffered losses last year, Sunac’s losses reached 25.7 billion

In 2024, the overall performance of China’s real estate enterprises continued to decline, with most facing losses and decreased revenues. Recently, several real estate companies released their annual performance reports, showing further widening losses in net profits compared to the previous year.

On the evening of March 28, Sunac China Holdings released its 2024 annual performance report. During the reporting period, the company achieved operating income of 74.02 billion yuan, a 52% decrease year-on-year. The company’s attributable net loss was approximately 25.7 billion yuan, compared to about 7.97 billion yuan in 2023, further expanding the losses.

As of the end of the reporting period, Sunac China’s cash balance was around 19.75 billion yuan, a decrease of 4.87 billion yuan year-on-year.

In November 2024, Sunac China announced the initiation of domestic debt restructuring, offering four debt restructuring plans including discounted repurchase, debt-to-equity swaps, asset-to-debt swaps, and debt extension. Within just over 50 days, Sunac China completed a domestic debt restructuring amounting to 15.4 billion yuan.

The successful restructuring of domestic debt resulted in Sunac China’s interest-bearing debt decreasing by 18.16 billion yuan in 2024, down to 259.67 billion yuan.

Additionally, Far East Consortium under China Life recently released its annual performance for the year ending December 31, 2024. The group achieved revenue of 23.641 billion yuan, a 49.12% decrease year-on-year, with an attributable net loss of 18.624 billion yuan, a 11.72% decrease compared to the previous year.

The announcement cited that the recorded losses were primarily due to the deep adjustment in China’s overall real estate market in 2024, leading to a drop in industry gross profit margins, provisions for project impairment, and losses from selling property projects.

Furthermore, several real estate companies recently published their 2024 annual reports. Kingsland Group incurred losses of 6.115 billion yuan, China Aoyuan recorded losses of 2.096 billion yuan in the previous year, Rongxin China expected a net loss of 11 to 13 billion yuan in 2024, and Greenview China Real Estate estimated losses of around 5.4 billion yuan for the previous year.

According to a recent report by the China Real Estate Research Institute, the 2025 study of the top 100 real estate enterprises in China showed a decline in total sales and sales area by 26.0% and 24.4% respectively in 2024.

The report indicated that the average operating income of the top 100 enterprises in 2024 was 33.82 billion yuan, a 9.4% decrease year-on-year. The average net profit also dropped significantly by 76.8% to 420 million yuan. Profitability has been continuously decreasing over the years, with the average net profit margin and return on net assets in 2024 at 1.1% and 0.3% respectively, approaching zero profitability.

Recently, among the 90 mainland real estate companies listed in A-shares and Hong Kong stocks, only 30% are expected to remain profitable for the full year of 2024. The number of companies facing losses is twice that of profitable ones, with several companies experiencing annual losses exceeding one billion. For example, China Resources, controlled by Shenzhen’s state-owned asset management, incurred losses of around 45 billion yuan in the previous year.