LVGEM (China) Real Estate Investment Company Limited (LVGEM CHINA) released its audited results for the year ended 31 December 2025, highlighting a sharp deterioration in earnings despite a higher gross margin.
Revenue and Profitability • Revenue fell 49.8% year-on-year to RMB1.87 billion, mainly due to a 68.1% drop in property sales to RMB837.20 million. • Rental income slipped 9.8% to RMB600.95 million, while comprehensive services revenue edged up 2.0% to RMB427.89 million. • Gross profit rose 14.7% to RMB938.23 million, lifting gross margin to 50.3% (2024: 22.0%) on the back of higher-margin project handovers. • A combined RMB9.37 billion of non-cash charges—principally a RMB5.51 billion fair-value loss on investment properties and a RMB3.85 billion write-down of properties—drove the group to a net loss of RMB9.66 billion, widening 77.8% versus 2024. • Loss attributable to shareholders reached RMB8.80 billion; basic and diluted loss per share stood at RMB145.75 cents (2024: RMB100.69 cents). The board proposes no dividend.
Balance Sheet and Liquidity • Total assets declined to RMB97.32 billion, while total liabilities rose to RMB82.78 billion, lifting the liabilities-to-assets ratio to 85.1% (2024: 76.9%). • Net current liabilities were RMB1.59 billion versus net current assets of RMB3.18 billion a year earlier. • Cash, restricted and pledged deposits fell to RMB839.78 million; short-term borrowings and current-portion bonds totaled RMB29.87 billion, with RMB27.59 billion classified as immediately repayable after loan defaults or cross-defaults. • Gearing (net debt to equity) surged to 212.5% from 126.2%.
Segment Update Real Estate Development: Revenue plunged to RMB837.20 million. Contracted sales dropped 73.6% to RMB2.92 billion, driven primarily by the Baishizhou Phase I project in Shenzhen. Commercial Property Investment: Rental income of RMB600.95 million was supported by an occupancy rate above 70% across more than 1.6 million sq m of lettable space under “NEO” and “Zoll” brands. Comprehensive Services: Property management, hotel and other services delivered RMB427.89 million in revenue, up 2.0%.
Going-Concern Uncertainties Management cites material uncertainties arising from: • Significant short-term debt maturities versus limited cash; • A Hong Kong winding-up petition, now adjourned to 1 June 2026; • Ongoing offshore debt-restructuring negotiations.
Mitigating actions include interest-payment extensions on RMB71 million of loans, RMB73 million of onshore asset disposals in Q4 2025 and continued discussions with creditors for a comprehensive restructuring.
Other Key Data • Finance costs fell 45.1% to RMB1.12 billion after lower capitalised interest. • Staff costs decreased to RMB304.27 million; headcount stood at 1,896. • No major acquisitions; a US$20 million hotel asset disposal in Los Angeles closed during the year.
Auditor’s View Prism Hong Kong Limited issued an unmodified opinion with a “Material Uncertainty Related to Going Concern” paragraph reflecting the liquidity and refinancing challenges.
Shareholder Information The register of members will close from 26 May 2026 to 29 May 2026 for the annual general meeting record date, 29 May 2026.