3.9 Billion Yuan Restructuring Gains Floor, Xuhui Expects Turnaround to Profitability in 2025, Real Estate Debt-to-Equity Swaps Enter Final Phase

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Source: Huaxia Times

Reporter: Li Beibei, Shanghai

On March 16, CIFI Holdings (Group) Co., Ltd. (hereafter “CIFI Holdings,” 00884.HK) announced that due to the approximately 40 billion yuan gain from completing offshore debt restructuring on December 29, 2025, it is expected to turn from loss to profit in 2025, with net profit attributable to shareholders (net profit attributable to parent) around 17 billion to 19 billion yuan.

This is CIFI’s first annual profit since 2022. As of the end of 2025, the company’s short-term debt ratio is below 30%, and its net debt-to-asset ratio has significantly decreased compared to 2024. Driven by this positive news, on March 17, CIFI Holdings opened higher, rising over 10% intraday, and closed up 5.56% for the day.

It should be noted that, despite the on-paper turnaround, CIFI admitted that excluding the one-time restructuring gains, the company’s operational side still faces pressure. It is estimated that in 2025, the core net loss attributable to shareholders will be about 7.5 billion to 9 billion yuan, larger than the core loss of approximately 5.825 billion yuan in 2024.

Private real estate companies’ “turnaround”

After recording large losses for three consecutive full fiscal years, CIFI Holdings announced a turnaround, signaling an important shift in the “difficulties” faced by private real estate firms.

According to the announcement, based on preliminary assessments of management accounts not yet audited, CIFI expects its net profit attributable to parent in 2025 to reach about 17 billion to 19 billion yuan. On January 3, this year, CIFI Group released unaudited operational data, showing total contracted sales of about 16.1 billion yuan for 2025, with equity sales around 8.29 billion yuan. Prior to this, from 2022 to 2024, CIFI recorded losses of 13.049 billion, 8.983 billion, and 7.076 billion yuan respectively.

CIFI pointed out that the main reason for the expected profit turnaround in 2025 is “primarily due to the approximately 40 billion yuan gain from offshore debt restructuring announced and completed on December 29, 2025.”

According to public information, CIFI announced the initiation of offshore restructuring on November 1, 2022. The offshore debt includes 10 senior bonds, 1 convertible bond, 1 perpetual bond, and 13 offshore loans, involving banks, syndicates, long-term funds, short-term funds, hedge funds, and other investors.

On September 15, 2025, the overall restructuring plan for 7 domestic public market bonds was approved by bondholders’ meetings, involving approximately 10.06 billion yuan. The plan, through cash recovery, debt-to-equity swaps, and debt offsetting, is expected to reduce debt by over 5 billion yuan, with no principal and interest payments required in the next two years.

By December 29, 2025, CIFI announced that all conditions for offshore debt restructuring had been met, and the plan officially took effect. Through debt-to-equity swaps and principal reductions, it is expected to reduce debt by about 38 billion yuan, with a debt reduction ratio of 67%, and the company will have no cash repayment obligations for offshore debt principal and interest over the next three years.

In addition to turning losses into profits, CIFI also significantly optimized its debt structure through domestic and offshore debt restructuring, reducing short-term debt levels. The announcement shows that by the end of 2025, short-term debt accounted for less than 30%. Meanwhile, interest-bearing liabilities were greatly reduced, and net assets increased, leading to a substantial decrease in the company’s net debt ratio compared to 2024.

“Low debt, light assets, high quality” new development model

The smooth implementation of debt restructuring has laid a foundation for CIFI’s transformation. Facing ongoing industry pressures, the company has also clarified a new development direction.

At the end of last year, when CIFI completed overall domestic and offshore debt restructuring, CFO Yang Xin told Huaxia Times that the successful completion of the restructuring, with interest-bearing debt reduced by more than half, significantly eased short-term cash flow pressure, giving CIFI “the opportunity to stand up and recover.”

Objectively speaking, completing domestic and offshore credit bond restructuring is only the prerequisite for CIFI to “stay alive.” “Standing up” is not a smooth path, and operational recovery still needs time to prove.

Overall, the real estate industry remains under pressure. According to the National Bureau of Statistics, in 2025, national real estate development investment was 82,788 billion yuan, down 17.2% year-on-year; new construction area decreased by 20.4%; sales of new commercial housing totaled 83,937 billion yuan, down 12.6%. In January-February 2025, investment in real estate development nationwide was 9,612 billion yuan, down 11.1%; new commercial housing sales were 8,186 billion yuan, down 20.2%.

In the announcement, CIFI also admitted that after excluding the gains from debt restructuring, the core net loss attributable to shareholders in 2025 is expected to be about 7.5 to 9 billion yuan, larger than the 5.825 billion yuan in 2024. This is mainly due to a decrease in completed real estate projects that can generate recognized income, leading to lower revenue, and ongoing market adjustments putting pressure on gross profit margins.

Amid the ongoing industry adjustments, CIFI is shifting to a new development path.

At the creditors’ briefing for offshore debt restructuring on May 12, 2025, Chairman Lin Zhong clearly proposed a development model of “low debt, light assets, high quality,” and outlined three major transformation directions: focusing on self-operated development, strengthening rental income, and exploring asset management businesses. In August 2025, Lin Zhong reiterated that CIFI would completely bid farewell to the old model of “high leverage, high debt, high turnover,” and shift to a new path, benchmarking international firms like Tishman Speyer and Blackstone, aiming to “stand up again” within three years.

It is understood that from the second half of 2025, CIFI has launched new products in cities like Kunming, Guiyang, and Chengdu, receiving positive market feedback. In 2026, CIFI plans to introduce new phases of projects in Guangzhou, Chengdu, Taiyuan, and other cities for sales.

Many leading private real estate firms achieve significant debt reduction

CIFI’s debt restructuring and profit turnaround are not isolated cases. Since 2025, several private real estate companies have made breakthrough progress in debt restructuring, accelerating industry risk clearance.

According to CRIC (Pu Rui Digital Research), as of the end of January 2026, 43 listed real estate companies with financial difficulties had total interest-bearing liabilities of 2.65 trillion yuan. About 18 of these companies announced debt restructuring plans, with total interest-bearing liabilities of approximately 1.84 trillion yuan, accounting for about 69.4%.

“Overall, for large-scale real estate companies, debt restructuring is entering the latter stages of implementation. After successful restructuring, their total interest-bearing liabilities will significantly decrease, accelerating industry risk clearance. The remaining small and medium-sized enterprises are also expected to speed up their restructuring,” CRIC emphasized.

Just as CIFI announced a profit turnaround, on March 16, Fantasia Holdings Group Limited (hereafter “Fantasia,” 01777.HK) announced that both Hong Kong and Cayman courts approved its offshore debt restructuring plan, covering its outstanding $4.655 billion offshore debt. Fantasia did not disclose the amount of debt reduction but emphasized that the restructuring would significantly improve overall financial health and ease immediate liquidity pressures. Earlier, the company had adjusted principal and interest payments on five domestic bonds in preparation for restructuring.

Notably, after debt restructuring clears obstacles, many distressed firms are returning to normal operations.

For example, on March 6, Country Garden held its monthly management meeting, outlining its development direction and framework for the next 3-5 years. Chairwoman Yang Huiyan required regional projects to solidly complete each phase, laying a foundation for “second growth.” She viewed 2026 as the start of the “14th Five-Year Plan” and a critical year for transitioning from project delivery to normal operations, with the next 3-5 years being key for Country Garden’s long-term growth.

CRIC believes that in 2025, real estate companies made breakthrough progress in debt restructuring, entering a new phase of risk clearance. The continuous implementation of large-scale debt restructuring by major firms also boosts confidence for smaller companies, helping stabilize the market. However, after solving credit bond issues, how quickly real estate companies can return to normal operations and strengthen cash flow remains crucial.