Anhui's first IPO-listed property developer is now facing the risk of delisting.

On October 21, SANXUN GROUP (06611.HK) disclosed that it had submitted a review application to the Stock Exchange of Hong Kong. The move came after the exchange decided on October 9 to cancel the company's listing status.

According to the announcement, the delisting risk stems from SANXUN GROUP's failure to publish its 2024 annual report, as well as its 2025 interim and annual reports and 2026 interim report on schedule. Unless the review application is filed, the company would be delisted starting October 27. However, the company is not confident about whether it can retain its listing status after the review, stating only that "the outcome of this review is uncertain."

On October 22, a reporter sent an interview outline to SANXUN GROUP regarding the progress of the delisting review and follow-up measures, but had not received a response as of press time.

SANXUN GROUP is a private property developer from Anhui, founded in 2004 by the couple Qian Kun and An Juan. Qian Kun graduated from Hefei University of Technology with a major in industrial and civil construction, and has a strong interest in traditional Chinese studies. He explained the name "Sanxun" by saying that "xun" is a traditional Chinese character representing wind, speed and energy — a spirit of positive progress. It also refers to the southeast, an advantageous position; building homes facing this direction ensures good lighting. The two characters "Sanxun," he said, look as solid and steady as the houses they build.

Initially, SANXUN GROUP was engaged in real estate-related investment business and only formally entered the property development sector in 2010. In 2018, the company was first selected as one of the "Top 100 Private Enterprises in Anhui Province," and in the same year, it relocated its headquarters to Shanghai. At that time, SANXUN GROUP's sales were still less than 10 billion yuan, but at the relocation ceremony, Qian Kun painted a grand vision — "100 billion in five years," meaning achieving 30 billion yuan in sales by 2019 and reaching the 100 billion target within five years.

To that end, SANXUN GROUP expanded beyond Anhui and began implementing its "2+X" strategy (the city clusters around Shanghai and Anhui plus key cities under the Yangtze River Delta national strategy) and its "two horizontals and three verticals" strategy (key cities along the Yangtze River Economic Belt and the Longhai Railway line; key cities along the Beijing-Shanghai high-speed rail, Beijing-Kowloon high-speed rail and coastal high-speed rail lines). It also formed strategic partnerships with property developers such as Hong Yang Group and DaFa Properties, hoping to leverage a minority-stake operation model to achieve rapid growth with less capital.

Qian Kun also hoped to gain support from the capital markets. SANXUN GROUP submitted its prospectus three times — in October 2019 and in April and October 2020 — all of which expired without success. In July 2021, the company finally got its wish and caught the last train for mainland property stocks to list, becoming the first IPO-listed property developer that year and the first in Anhui Province to go public via IPO.

When he first announced the 100 billion slogan, Qian Kun said, "People should have dreams; only with goals can we have a direction to strive for." But facts proved that this dream was an unattainable castle in the air. According to third-party institution statistics, in 2019, SANXUN GROUP's full-caliber sales were 9.12 billion yuan, ranking 167th in the industry — more than 20 billion yuan short of the 30 billion target. It was not until 2020 that its full-caliber sales exceeded 10 billion yuan. In 2023, the year originally designated for the 100 billion push, the company achieved only 783 million yuan in sales.

The prospectus showed that as of April 2021, SANXUN GROUP had 44 projects at various stages of development, covering three provinces — Anhui, Shandong and Jiangsu — with total land reserves of 4.3 million square meters, making it a small-to-medium-sized developer in terms of scale. From 2018 to 2020, the company's revenue grew by more than 400%, with a compound annual growth rate of nearly 140%, while net profit grew by more than 700%, with a compound annual growth rate of nearly 190%.

This high performance growth came at the cost of high leverage. From 2018 to 2020, the weighted average effective interest rate on SANXUN GROUP's borrowings was 14%, 12.3% and 9.4% respectively, far above the industry average. As of the end of 2020, the company had only 460 million yuan in freely disposable cash, insufficient to cover its 1.078 billion yuan in short-term debt.

Subsequently, the adjustment in the real estate industry further amplified SANXUN GROUP's operational risks. Performance data showed that the company's net profit began turning from profit to loss starting in 2022, and its financial reports were only updated through the 2024 interim report. As of the end of June 2024, the current portion of SANXUN GROUP's interest-bearing bank and other borrowings stood at 695 million yuan, while cash and cash equivalents were only 26 million yuan, raising doubts about its ability to continue as a going concern.

Actual controller Qian Kun is also deeply mired in debt disputes. In early 2024, a provisional receiver was appointed over his shares in SANXUN GROUP. The company was suspended from trading on April 1, 2025, due to delayed publication of its financial reports, and it has yet to meet the resumption guidance. The 18-month suspension period also expired on September 30 this year. In August, creditors filed a winding-up petition against the company, with crises coming one after another.

According to relevant regulations, after a listed company submits a written review application, the review committee will re-examine the facts and evidence. However, if the core issue — failure to meet the resumption conditions — remains unresolved, the review will be difficult. Looking at past cases, the majority of reviews upheld the original decision. Companies such as Kingsoft Energy and China Ocean Development were formally delisted after review. SANXUN GROUP will most likely be unable to avoid the fate of delisting.