Fuli Properties to lose 16.6 billion yuan in 2025: Can debt restructuring turn the tide?

Cailian Press, April 1 (Li Jie) R&F Properties (02777.HK), once known as the “King of the Five Tigers in South China,” released its 2025 annual results report. Based on the information it disclosed, the company’s operating situation remains severe.

The annual report shows that in 2025, R&F Properties recorded revenue of about RMB 10.94B, a sharp year-on-year decline of 38.2%. Full-year contracted sales were about RMB 14.21 billion, corresponding to a sales area of about 1.8736 million square meters. Projects are distributed across 26 provinces in China and 3 countries overseas.

Although performance at the revenue level was weak, the company’s annual loss narrowed. The company’s 2025 loss was approximately RMB 16.6B, compared with a loss of RMB 17.79B in 2024, narrowing by 6.7% year-on-year.

However, analysts pointed out that this does not mean the company’s profitability has been restored; rather, it is a slight improvement built on a high-base loss.

From the balance sheet perspective, R&F Properties’ liquidity crisis has not shown any obvious improvement. As of the end of 2025, the company’s total cash was about RMB 3.06B, down further from RMB 3.86B at the end of 2024. Meanwhile, although total borrowings edged down to RMB 99.37B, short-term borrowings due within one year were as high as RMB 93.39B, accounting for more than 94% of total borrowings.

This means that, based solely on the company’s total cash on its books, it can cover only about 3.3% of its short-term debt—indicating a high risk of a capital chain squeeze.

This grim situation is also reflected in the company’s debt delinquency data. The company disclosed that as of December 31, 2025, for interest-bearing debts with principal amounts exceeding RMB 10 million within the scope of its consolidated financial statements, the combined principal balance had reached RMB 36.81 billion, covering four categories: credit bonds, bank loans, non-bank loans, and other interest-bearing debts.

R&F Properties said the reason for the delinquencies was that “there is a short-term liquidity pressure that could not be repaid in a timely manner.”

Facing substantial repayment pressure, R&F Properties’ debt restructuring has become a focus of market attention.

In fact, R&F was one of the real estate companies that started restructuring its offshore bonds relatively early. As early as 2022, the company completed the restructuring of all ten series of senior notes through a consent solicitation, creating room for subsequent asset disposal. However, as the industry continued to adjust, the company had to launch further debt reduction measures.

According to information disclosed in the annual report, in 2024 R&F began preparations for a second round of comprehensive restructuring of the remaining senior notes, consolidating the relevant notes into three notes. The restructuring plan officially started in December 2024, and was revised in the second half of 2025 based on market feedback.

The new debt restructuring方案 offers noteholders four options: (1) a full-cash option paid at 5% of the face value; (2) debt-to-equity conversion; (3) repayment with new notes at a discount of 50% versus the face value; and (4) new notes with a term of ten years. Currently, the plan has received support from more than 77% of creditors.

In its annual report, R&F Properties’ management emphasized that advancing the plan is an important milestone for 2025, and clearly stated that the 2026 target is “to significantly strengthen the financial position and ease short-term liquidity pressure.” After the plan is completed, a substantial proportion of the senior notes will be cancelled with a large haircut. This will not only significantly reduce the total debt amount, but more importantly, send a positive signal to the market.

Beyond financial data, news related to the company’s management has further heightened the market’s doubts about it. According to reports from multiple media outlets, around the period of the 2026 Spring Festival, R&F Properties Chairman Li Sixian was intercepted during an overseas trip and was told that he has been restricted from leaving the country by the Tianjin Third Intermediate People’s Court.

In response, not long ago, an R&F representative told reporters that it has not yet received any relevant official notification, and the specific circumstances need to be determined based on the company’s announcements or information from judicial authorities.

Citibank published a research report stating that it lowered R&F Properties’ target price from HK$0.54 to HK$0.45 and maintained a “Sell (high risk)” rating. Citibank noted that if the sales and financing environment does not improve, the company’s cash flow pressure may further intensify, and the progress on asset disposals will become a key focus.

Regarding project reserves, the annual report shows that R&F Properties’ land reserves remain considerable. As of the end of 2025, the company’s total GFA was about 45.86M square meters, with total sellable area of about 34.75M square meters. Industry participants believe this provides a foundation for its future asset disposals and potential cash recoveries.