Agile Property suffers a huge loss of 22.6 billion, with a market value of only 1.2 billion Hong Kong dollars

Leadar Finance Production Text | Peng Cheng Written | Meng Shuai Edited

Aoyuan Group, with a market value of only about HKD 1.2 billion, recently reported a massive loss of approximately HKD 22.6 billion.

The disclosed financial report clearly reveals the current performance difficulties faced by Aoyuan. In 2025, the company achieved revenue of 27.86B yuan, a sharp drop of 35.7% year-on-year; net profit attributable to the parent company was a loss of 22.57B yuan, an increase of over 30% compared to the previous year; gross profit margin continued to decline, further dropping to -17.6%.

On the debt front, Aoyuan is under significant pressure. As of the end of 2025, the company’s cash and bank balances (including restricted cash) totaled only 5.58B yuan, but short-term borrowings reached 38.73B yuan, and the asset-liability ratio rose to 89.53%.

What adds to Aoyuan’s pressure is that by the end of last year, the company had loans totaling 29.42B yuan principal and 1.31B yuan in interest, which defaulted due to non-payment on time, triggering cross-defaults on bank and other borrowings totaling 3.77B yuan.

Moreover, in December last year, a company under the son of “Gambling King” Stanley Ho, Ho Yau Long, submitted a winding-up petition against Aoyuan to the High Court of Hong Kong.

In response to the liquidity crisis, Aoyuan has taken active measures, including pushing forward with offshore debt restructuring; simultaneously, the company also attempted to ease cash flow pressure by selling assets.

However, asset disposals have also impacted Aoyuan’s profits. The annual report shows that in 2025, the company recorded a loss of about 2.9B yuan from the sale/termination of subsidiaries.

Revenue plummets 35.7%, losses grow over 30%

On March 31, Aoyuan Group released its 2025 annual performance report. The financials show that Aoyuan achieved revenue of 27.86B yuan for the year, down 35.7% from 43.35B yuan in 2024; net loss attributable to the parent was 22.57B yuan, an increase of over 30% compared to 12.73B yuan in 2024.

Looking at the business segments, nearly all sectors saw revenue shrinkage. Property development recognized sales revenue of 26.55B yuan, a 52.1% plunge from 12.83B yuan in 2024; the confirmed sales area was 1.26 million square meters, down 44.5% year-on-year; the average sales price was 10,073 yuan per square meter, a 13.7% decrease.

Meanwhile, property management revenue reached 4.91B yuan, down 6.2% year-on-year. As of the end of last year, the total managed area decreased from 551 million square meters to 503 million square meters, an 8.7% decline.

For other businesses, including property construction services, green ecological landscaping, smart home and decoration services, environmental protection, and commercial management, last year contributed 22.57B yuan, a 26.1% decrease.

In 2025, Aoyuan recorded a gross loss of 17.22B yuan, with a gross loss rate of 17.6%. In comparison, the company’s gross loss in 2024 was only 520 million yuan, meaning the gross loss sharply expanded by 841.3% year-on-year.

The main reason for this is the “scissors difference” between prices and costs, which is the primary culprit dragging down this indicator. Under pressure from both ends, Aoyuan’s gross profit margin was further eroded.

Aoyuan also explained in the financial report that the increase in gross loss was mainly due to the challenging operating environment in the real estate industry, which weakened buyer confidence and slowed property sales. The average sales price confirmed last year was 13.7% lower than the previous year, while the related average cost only decreased by 4.1% compared to 2024.

At the net profit level, Aoyuan posted a net loss of 939k yuan last year, a 31.1% increase from 16k yuan in the previous year.

Regarding this, Aoyuan explained that the loss was mainly affected by three factors: losses from the sale/termination of subsidiaries; impairment losses on investments accounted for using the equity method; and a significant increase in income tax expenses.

In 2025, the total pre-sale amount of Aoyuan’s real estate projects was 8.57 billion yuan, down 44.7% year-on-year; the total pre-sale construction area was 939k square meters, down 19.1%; and the average pre-sale price was 9,129 yuan per square meter, a 31.7% decline.

In terms of delivery, in 2025, Aoyuan delivered approximately 16k units, covering about 1.35 million square meters, but the progress in delivery did not effectively ease the company’s pressure on profits and cash flow.

Regarding land reserves, Aoyuan also showed a shrinking trend. As of the end of 2025, the group owned land reserves with an estimated total construction area of about 25.48 million square meters across 69 cities and regions.

Compared to the end of the first half of last year, when the estimated total construction area was 29.62 million square meters across 73 cities and regions, the land reserve scale had already significantly decreased within half a year.

Debt “mounting pressure,” “Gambling King” son files for winding-up petition

In terms of assets and liabilities, Aoyuan also faces considerable challenges. The financial report shows that as of the end of 2025, the company’s asset-liability ratio was 89.53%, an increase of 10.13 percentage points from the end of the previous year.

As of the end of 2025, the company’s cash and bank balances (including restricted cash) totaled 5.58B yuan, but short-term borrowings alone reached 38.73B yuan.

Although total borrowings decreased by 2.11B yuan compared to the end of 2024, its net debt ratio soared from 103.6% at the end of 2024 to 229.6%, sharply increasing financial risk.

Notably, as of the end of 2025, Aoyuan had loans totaling 29.42B yuan principal and 1.31B yuan in interest, which defaulted due to non-payment at their respective maturities. This default also triggered cross-defaults on bank and other borrowings totaling 3.77B yuan.

Aoyuan mentioned in the financial report that, as disclosed in announcements on May 14 and June 7, 2024, due to liquidity pressures, the company had not paid interest on the US$483 million 6.05% senior notes due in 2025 after the grace period expired on May 13, 2024, and expected to be unable to fulfill all payment obligations under its offshore debt.

Aoyuan stated that failure to pay these debts could lead creditors to demand accelerated repayment.

The company also emphasized that it has been actively managing its offshore debt. Specifically, the group has established cash flow models and simulated liquidation analyses to support restructuring plans.

Based on this, Aoyuan has maintained negotiations with major offshore creditors, actively assisting in due diligence, engaging in multiple communications on restructuring plans, and continuously adjusting and improving the terms to reach a consensus and implement the restructuring as soon as possible.

It is worth noting that the company also mentioned in its annual report that on December 9 last year, a company filed a winding-up petition against Aoyuan in the Hong Kong High Court, involving alleged unpaid amounts of USD 18.587 million and RMB 2.347 million.

According to Shenzhen Business Daily·Du Chuang, the petitioner was New Show Holdings Limited, a subsidiary of Melco International Development, which is controlled by “Gambling King” Stanley Ho’s son, Ho Yau Long.

The petition was based on an arbitration award issued by the China International Economic and Trade Arbitration Commission on September 25, 2025. The High Court scheduled a hearing for March 2, 2026, which was postponed to June 29, 2026.

Aoyuan stated that these circumstances indicate significant uncertainties that cast doubt on the group’s ability to continue as a going concern. Given these factors, the directors have prudently considered the group’s future liquidity, performance, and available financing sources when assessing whether the group has sufficient financial resources to continue operations.

To this end, the directors have adopted multiple plans and measures to improve liquidity and financial condition, aiming to restructure existing borrowings and oppose the winding-up petition.

According to Tianyancha, Aoyuan Group Holdings Limited currently has multiple enforcement records, with a total enforced amount exceeding 18.59M yuan. Historical enforcement records show a total enforced amount surpassing 11 billion yuan.

Selling assets to ease liquidity, adopting a “sell, sell, sell” approach

Faced with declining performance and debt pressure, asset disposal has become a key strategy for Aoyuan to maintain liquidity.

Media reports indicate that in October last year, Aoyuan Property was forced to sell the Hong Kong Kowloon Tong Yidong Road No. 6 Long Park Villa project, acquired at a bottom price of HKD 966 million in July 2023, due to liquidity issues.

According to Perspective Network, as early as the second half of 2021 to 2022, Aoyuan had already raised over 20 billion yuan by concentrating on selling project equity and asset packages.

Since 2023, asset disposals have become more specific and fragmented. For example, selling equity in Changzhou projects for about 426 million yuan and pushing forward with the sale of Kuala Lumpur projects.

Since 2024, the logic of asset disposal has further shifted toward “trading time for space.” On one hand, the scope of asset stripping expanded from real estate projects to include environmental protection, education, and other diversified businesses, reflecting a comprehensive contraction of non-core sectors; on the other hand, individual transactions have become smaller in scale, more often “continuous blood transfusions” rather than one-time relief.

According to Perspective Network’s incomplete statistics, since 2025, Aoyuan has disclosed about 1 billion yuan in funds raised from asset disposals. When including undisclosed transactions, the total scale of funds raised could be even larger.

However, compared to Aoyuan’s enormous debt load, the amount of funds raised remains relatively limited. Asset disposals have also become a significant source of net profit loss. The annual report shows that in 2025, losses from the sale/termination of subsidiaries amounted to about 2.35M yuan.

Looking at recent actions, after entering 2026, Aoyuan continues to divest non-core assets. On March 27, the company announced plans to sell environmental protection-related assets for about 1.15 billion yuan.

Aoyuan stated that this sale aims to divest non-core environmental assets, further concentrate resources on the core main business, and improve resource allocation efficiency.

The company’s directors believe that this sale will reduce the group’s debt and interest expenses, improve cash flow, and realize the value of environmental assets.

It is noteworthy that Aoyuan has long maintained a typical family-style governance structure. Currently, the board is chaired and led by founder Chen Zhuolin, with his wife Yue Yuan and family members Chen Zhuoxi, Chen Zhuonan, among others, serving as directors.

On April 1, the day after the annual report was released, Aoyuan announced that Chen Zhuoxiong (elder brother of Chen Zhuolin) resigned as a non-executive director due to reaching retirement age and wishing to reduce workload to focus on other matters.

Additionally, in May last year, Aoyuan announced that Ernst & Young had resigned as auditor because it could not reach an agreement with the company on audit fees for 2025, and was replaced by BDO Limited.

Radar Finance will continue to monitor developments related to Aoyuan.