A few days ago, the property developer held its monthly management meeting. Against the backdrop of the new policies introduced on August 28, Board Chairperson Yang Huiyan specifically recalled regional presidents from across the country for a two-day closed-door discussion. The co-chairperson of the company, Mo Bin, stated bluntly: "As long as the enterprise remains at the table, there is an opportunity to secure a place in the new round of transformation."

The year 2026 has been defined by the company as its "critical year for housing delivery", requiring all regional projects to set clear goals, solidify responsibilities, and identify, intervene, and resolve special cases early, with the aim of clearing all backlogs and achieving a successful conclusion by the end of the year. However, Yang Huiyan remains cautious. Although the company has navigated through the "uncharted territory" of complexity, uncertainty, and long-term challenges over the past three years, she still believes that the next phase after housing delivery—asset-liability repair—is also an "uncharted territory" that may be even more complex.

In reality, this complexity indeed exists. On September 9, Bloomberg cited informed sources stating that the China Securities Regulatory Commission (CSRC) has declined to accept a batch of mandatory convertible bond filing applications, including those from property developers such as this company. According to sources, this debt-to-equity instrument is a key part of negotiations between developers and offshore investors, having previously helped several major developers avoid liquidation proceedings. It is understood that the company has issued part of its $13 billion offshore mandatory convertible bonds. Several weeks ago, the company was informed that the CSRC would not accept its filing application for this instrument because the company is a dishonest entity and does not meet the requirements, with reasons for this status including defaults and regulatory violations.

The company's development posture can be seen from its interim financial report. In the first half of 2026, it achieved contracted sales of approximately RMB 14.25 billion in equity terms, corresponding to a contracted sales floor area of approximately 1.825 million square meters. During the same period, it recorded total revenue of approximately RMB 44.08 billion, a year-on-year decline of 39.3%; the net loss attributable to shareholders was approximately RMB 15.62 billion, narrowing by about 18.1% compared to the RMB 19.08 billion loss in the same period last year. The significant drop in revenue is not entirely unexpected, as the intensive delivery phase is nearing completion. During the period, the company's revenue from property development fell 39.5% to approximately RMB 42.356 billion from approximately RMB 70.028 billion in the same period of 2025.

Additionally, the company's loss is primarily attributed to a combination of factors. First, it recognized a net impairment of approximately RMB 6.173 billion on properties under construction and completed properties held for sale. Second, it recognized a net impairment loss of approximately RMB 3.791 billion on financial assets and financial guarantee provisions. Third, it recorded marketing and promotion expenses and administrative expenses of approximately RMB 3.197 billion, net financial expenses of approximately RMB 2.389 billion, and a share of losses from joint ventures and associates of approximately RMB 696 million. These three aspects have eroded part of the company's earnings. During the period, it recorded other income and gains of approximately RMB 4.105 billion, primarily from fair value changes on financial liabilities measured at fair value through profit or loss and debt restructuring gains. In other words, its reported loss position is influenced not only by operational factors but also by asset impairments and debt restructuring gains.

Its current strategy involves extending project management control down to the front line and seeking various ways to improve efficiency. Leading the project implementation is Chairperson Yang Huiyan. After continuously conducting high-frequency "site inspections" at the grassroots level, she personally took the lead in establishing a product research and design special task force (PMO). As the group's strategic project management body, this task force's core responsibility is to drive systematic improvements in product innovation and design quality. Yang Huiyan requires that, under the leadership of the PMO task force, all regional projects fully carry out product optimization in areas such as unit layout and functionality, while simultaneously advancing supply chain restructuring and the iteration of new project development systems. To fully ensure the efficiency guarantee for new project development, the company emphasizes holding the "three meetings"—"Development Necessary Meeting, Product Planning Meeting, and Project Kick-off Meeting"—implementing them at different levels, front-loading outcomes, and strengthening responsibility fulfillment at every stage. It aims to ensure that "every investment is spent where it matters most", focusing on key resources, capital utilization, and risk control.

Regarding debt restructuring, the company's offshore debt restructuring plan, involving approximately $17.7 billion in total, officially took effect on December 30, 2025, successfully entering a new phase of credit repair and performance execution. Meanwhile, restructuring plans for nine tranches of its onshore corporate bonds, with a total principal of approximately RMB 13.77 billion, were all approved during 2025. Pursuant to the terms of the plans, the company exercised its cash repurchase option of up to RMB 450 million in February 2026 and completed the relevant repurchase work in April. The implementation of both onshore and offshore debt plans has provided some respite for the company. As of mid-year, the company's borrowings decreased to RMB 142.661 billion from approximately RMB 147.959 billion as of December 31, 2025. These borrowings include bank and other borrowings, senior notes, and corporate bonds, amounting to approximately RMB 121.745 billion, RMB 15.329 billion, and RMB 5.587 billion, respectively. Within the largest portion, bank and other borrowings, approximately RMB 101.354 billion, RMB 18.534 billion, and RMB 1.857 billion are repayable within one year, within one to five years, and after five years, respectively. During the same period, the company held total cash balances (the sum of cash and cash equivalents and restricted cash) of approximately RMB 16.675 billion, of which cash and cash equivalents were approximately RMB 5.737 billion and restricted cash was approximately RMB 10.938 billion. Clearly, the company's cash is far from sufficient to cover its short-term debt due within one year. Specific debts still need to be resolved one by one.

Its onshore issuing entity, the property development group, publishes monthly updates on litigation and debt changes. According to its latest disclosure, in July this year, the entity was involved in nine pending litigation or arbitration cases with individual subject amounts exceeding RMB 50 million, with a total subject amount of approximately RMB 1.81 billion. However, during that month, its defaulted debt decreased by RMB 83 million on a net basis.