Sino-Ocean Group Holding Limited (Sino-Ocean Group, 03377) released its unaudited interim results for the six months ended 30 June 2026, detailing a rebound in revenue but a sharp swing into loss and a significant deterioration in balance-sheet strength.

Revenue in the period edged up 6.35% year on year to RMB6.60 billion, supported by a 25.35% rise in property-development income to RMB4.11 billion. Gross profit recovered to RMB15.49 million versus a RMB4.97 billion gross loss a year earlier, although gross margin remained slim at 0.2%. Loss attributable to shareholders reached RMB7.15 billion, reversing a RMB10.20 billion profit in the prior-year period, translating into a basic and diluted loss per share of RMB0.598.

Contracted sales fell 39.13% to RMB8.14 billion, with saleable GFA sold down 20.40% to 676,000 sq m. The average selling price (excluding car-parks) dropped to RMB13,300 per sq m from RMB18,900 per sq m. Landbank narrowed 9.45% to 24.50 million sq m.

Balance-sheet pressures intensified. Total assets declined 4.75% to RMB143.81 billion, while shareholders’ equity turned negative at RMB7.04 billion (end-2025: RMB0.37 billion positive). Cash resources, including restricted deposits, stood at RMB6.37 billion, up 5.80%. Net gearing ratio shifted to –749% (end-2025: 2,361%) after equity erosion; the current ratio slipped to 0.87.

Debt management remains critical. As of 30 June 2026, total borrowings were RMB50.39 billion, nearly half due within one year. The Group confirmed that RMB13.64 billion of bank and other loans and RMB3.39 billion of onshore bonds were overdue. It completed an offshore bilateral loan restructuring and, in August 2026, finished cash repayments under an onshore restructuring covering RMB17.8 billion of bonds. Further options involving equity economic income rights and asset-based settlements are pending implementation.

Auditor BDO issued a disclaimer of conclusion on the interim financials, citing “multiple uncertainties” over the Group’s ability to continue as a going concern, including large overdue debts, negative equity and ongoing litigation. Management has outlined measures such as debt extensions, asset disposals, cost controls and accelerated project deliveries to stabilise liquidity.

Strategically, the developer continues pivoting from “assets-centric” to “operation- and service-centric” models, expanding asset-light agent-construction, property management and senior-living services while prioritising project delivery; 6,500 units were handed over in the half year.

No interim dividend was declared. During the period, 845.16 million new shares were issued upon conversion of mandatory convertible bonds linked to the 2025 offshore debt restructuring.