Returns Hefei and Chaohu land parcels; OCT (Asia) receives 2.321 billion yuan in compensation

Recently, OCT (Asia) released an announcement stating that the company’s indirectly held non-wholly-owned subsidiary, Hefei Huanqiao Huanqiao (Asia) plans to return the Chaohu land parcel to the Chaohu City Land Reserve Center through a land reserve acquisition arrangement. The compensation will be RMB 596 million. Hefei OCT Industrial, in turn, plans to return three land parcels in Hefei to the Hefei City Land Reserve Center through a land reserve acquisition arrangement, with compensation of RMB 1.725 billion.

A reporter from the Economic Daily News learned that the Chaohu land parcel involves the Hot Spring Resort Town area. The Hefei land parcels originally belonged to the Phase II land of the Airport International Town. Previously, relevant land reserve acquisition matters were separately publicized by the natural resources and planning departments of Chaohu City and Hefei City.

According to the announcement, the land parcels subject to acquisition are all cleared land and have not been developed yet. After the acquisition, the remaining land area for the Chaohu project will be approximately 88,200 square meters. As of the end of 2025, the floor area of completed and under-construction buildings is approximately 0 and 63,300 square meters, respectively. For the Hefei project, the remaining land area will be approximately 780,300 square meters. As of the end of 2025, the floor area of completed and under-construction buildings is approximately 618,200 square meters and 311,400 square meters, respectively.

As of December 31, 2025, the Chaohu land parcel and the Hefei land parcels confirmed unaudited impairment losses of RMB 514 million and RMB 1,109 million, respectively. The expected net proceeds will be mainly used for the remaining projects, including payments already incurred for settlement projects and future payments, as well as working capital (including repaying loans).

In the announcement, OCT (Asia) stated that the company had also attempted to sell the above-mentioned land parcels, but the effort was unsuccessful due to factors including a lack of interested and capable buyers and significant differences in price expectations. After carefully assessing the costs required to develop these land parcels, the expected development returns, as well as the related risks and uncertainties, and considering current market conditions, the company believes that committing a large amount of capital to advance construction at this stage, or using resources in a manner that may not be prudent and effective, could bring additional debt risk, financial pressure, and loss risk to the Group.

OCT (Asia) believes that both the Chaohu land reserve acquisition and the Hefei land reserve acquisition are opportunities to revitalize assets. They can help mitigate the operational risks of such assets for the Group and enhance the Group’s flexibility and development potential. The cash land parcel compensation will bring additional cash flow to the Group and improve its working capital position, liquidity, and resilience against risks.

Economic Daily News