Sino-Ocean Group stated that industry risks are still in the process of clearing out.

Affected by the completion of offshore debt restructuring, Sino-Ocean Group's profit figures surged significantly in the first half of the year.

According to the group's latest announcement, the company achieved operating revenue of RMB 6.203 billion in the first half of 2025, down 53% year-on-year. While recording a gross loss of RMB 4.966 billion, profit attributable to owners reached RMB 10.202 billion, achieving a turnaround from loss to profit, mainly due to the completion of offshore debt restructuring during the period, which recorded non-cash gains.

On March 27 this year, Sino-Ocean Group announced that all conditions for offshore debt restructuring had been met and officially took effect. The total offshore debt restructuring scale was approximately $6.315 billion, which will be converted into approximately $2.2 billion of new debt, and approximately $4.115 billion of new mandatory convertible bonds and new perpetual securities.

Affected by the above restructuring, Sino-Ocean Group recorded offshore debt restructuring gains of RMB 31.756 billion during the period, representing one-time and non-cash gains. There was no such data in the same period last year, therefore significantly adjusting interim profits.

Looking at Sino-Ocean's fundamentals, the company's operating revenue in the first half was RMB 6.203 billion, down more than 50% year-on-year. Property development maintained the largest contribution, accounting for 53% of operating revenue, with income from Beijing, Bohai Rim, East China, South China, Central China and West China regions accounting for 29%, 18%, 4%, 20%, 22% and 7% respectively.

While revenue scale contracted, Sino-Ocean Group made provisions for multiple impairment losses during the period.

In the first half, the group's other losses (net) amounted to RMB 3.326 billion, mainly due to the real estate market still being in deep adjustment with a severe operating environment. During the period, fair value losses on financial assets and financial liabilities measured at fair value through profit or loss, litigation provisions and goodwill impairment losses were recognized.

Meanwhile, Sino-Ocean Group also recorded impairment losses under the expected credit loss model of RMB 9.725 billion, a significant increase from RMB 297 million in the same period of 2024. This provision of nearly RMB 10 billion mainly included expected credit loss provisions on trade and other receivables, as well as provisions for financial guarantees.

Without considering the impact of debt restructuring gains, Sino-Ocean Group still recorded losses in the first half. The company stated this was mainly due to the continued adjustment of the domestic real estate market in recent years, leading to declining revenue and gross profit margins, as well as increased impairment provisions for property projects; and declining performance from joint ventures and associates.

From an asset-liability perspective, due to the completion of offshore debt restructuring, Sino-Ocean Group's total loans decreased from RMB 98.373 billion at the end of 2024 to RMB 66.997 billion in mid-2025. The group's net gearing ratio was approximately 743%, with total cash resources (including cash and cash equivalents) totaling RMB 5.831 billion.

"With the gradual introduction of accommodative real estate market policies, the company will continue to actively resolve debt risks and focus on the delivery of property development projects to improve the net gearing ratio," Sino-Ocean stated.

Looking ahead to the second half of the year, Sino-Ocean Group expects that the turnaround in real estate market conditions will still take time, and industry risks are still in the process of clearing out. In the future, the industry will comprehensively enter a new stage of improving quality and efficiency of existing stock, with commercial management and asset management, elderly care services, property services, urban renewal, and existing asset disposal businesses welcoming development opportunities.