Turning losses into profits expected? OCT A's operating cash flow has been positive for three consecutive years; initial results of strategic transformation are evident.

Produced by|China Interview Network

Reviewed by|Li Xiaoyan

On the evening of March 30, Overseas Chinese Town A (000069.SZ) released its 2025 annual report. Against the backdrop of deep adjustments in both the culture and tourism (Wenlv) and real estate sectors, the company achieved full-year operating revenue of RMB 31.381 billion, down 42.32% year over year; net profit attributable to shareholders was RMB -14.496 billion, with the loss widening. But the standout point is that net cash flow from operating activities reached RMB 12.501 billion, up 133.13% year over year, remaining positive for three consecutive years, demonstrating strong cash collection and resilience to risks. This financial report is both a snapshot of the pains brought by industry cycles, and a transformation answer sheet by Overseas Chinese Town A that anchors on cash flow, optimizes products and structure, and advances coordination between its two main businesses.

In 2025, Overseas Chinese Town A’s net cash flow from operating activities was RMB 12.501 billion, an increase of RMB 7.139 billion from 2024, with a year-over-year growth rate of more than 130%. It has been positive for three consecutive years and has become the biggest highlight of the report. This performance stems from the company placing sales de-stocking and cash collection at the core position, coordinating capital inflows and outflows, and strengthening cash-flow management, while also promoting cost reductions and efficiency gains, with total sales and administrative expenses down 27% year over year. In the current environment where liquidity is under widespread pressure across the industry, continuously positive operating cash flow provides solid financial support for the company’s debt repayment, project investment, and strategic transformation.

On the financial structure front, the company adheres to a prudent strategy and continuously optimizes its debt structure. As of the end of 2025, the total amount of interest-bearing liabilities was RMB 118.5 billion, of which medium- and long-term borrowings accounted for 69%, and the average financing cost has been declining year by year. This means the company’s near-term debt-servicing pressure is controllable, its advantage in financing costs is gradually becoming apparent, and its financial security and sustainability are further improved.

Culture and tourism, one of Overseas Chinese Town A’s core main businesses, continued to advance product upgrades and business model innovation in 2025. Throughout the year, its culture-and-tourism projects collectively received 79.70 million visitors; key projects such as Shenzhen Happy Valley completed updates and renovations, and visitor experiences and product appeal improved significantly. While improving quality in heavy-asset operations, the company is also accelerating the shift to a light-asset layout: Happy Valley Company’s light-asset managed construction for Yueqing Shuitan Park; the hotel company’s first limited-service hotel pilot project, the Chuangyi Park for Jiatu, opened smoothly; and the company responsible for tourism development signed seven market-based projects.

The expansion of the light-asset model not only reduces pressure on heavy-asset investment, but also enables brand and management output, opening up new points of profit growth. The culture-and-tourism business is transforming from “heavy-asset investment” to “light and heavy operating side by side, with operations prioritized.” Its revenue structure continues to be optimized, providing important support for the company to get through industry cycles.

During the deep adjustment period in the real estate industry, Overseas Chinese Town A, with product strength as the core, takes multiple measures to promote sales de-stocking. In 2025, the company cumulatively achieved contracted sales area of 1.206 million square meters and contracted sales value of RMB 17.73 billion, with multiple projects performing exceptionally in regional markets. On the product side, it continuously improves quality and living experience; on the marketing side, it enriches de-stocking measures, precisely matches market demand, and effectively activates existing inventory assets.

Regarding land reserves, the company adheres to a cautious approach to land acquisition, focusing on high-quality land in core cities. In 2025, it won the Longken area land plot in Shapingba District, Chongqing, adding 52.8 thousand square meters of planned above-ground gross floor area, laying out high-quality resources and storing momentum for subsequent sales and performance recovery. This “de-stocking of inventory and adding quality increments” strategy both alleviates inventory pressure and ensures the sustainable development of the real estate business.

Beyond positive signals, the company also faces staged challenges. In 2025, revenue fell by more than 40% year over year; net loss attributable to shareholders was RMB 14.496 billion, with the loss widening by 67.35% versus 2024. The widening of the loss is mainly due to the decrease in project-recognition revenue and gross margin following industry adjustments, as well as losses resulting from asset transfers undertaken to accelerate de-stocking and improve cash flow. At the same time, the company still has more than 10 million square meters of inventory that can be developed into planned above-ground gross floor area, meaning de-stocking pressure remains high. Although the culture-and-tourism business has begun to recover, its profit contribution still needs to improve, and the synergy effect between the two main businesses awaits further release.

Looking ahead, Overseas Chinese Town A has made it clear that it will take “market-oriented, professional, and systematic” as its direction, with product strength as the core and customers at the center, focusing on product and model innovation, efficient operations, and high-quality services, and fully leveraging the dual-engine drive of culture and tourism and featured real estate.

In the short term, continuously positive operating cash flow and an optimized debt structure provide the company with a “safety cushion” to cope with industry fluctuations. In the long term, the expansion of culture-and-tourism light assets, improvements in real estate product strength, and precise land acquisition will gradually drive performance recovery and profit improvement. As a central enterprise with “culture and tourism + real estate” as its two main businesses, Overseas Chinese Town A is strengthening its base during cycle adjustments with cash flow as its shield and product and model innovation as its spear, building momentum for high-quality development.

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