CIFI Holdings Group Company Limited (00884) has announced an inside information update, projecting a net profit attributable to owners of approximately RMB 17 to 19 billion for the 2025 fiscal year. This anticipated shift from loss to profit is primarily attributed to a gain of roughly RMB 40 billion generated from the company's overseas debt restructuring, which was finalized and announced on December 29, 2025. By the end of 2025, the proportion of the company's short-term debt had fallen below 30%. Concurrently, the debt restructuring contributed to an increase in net assets, resulting in a significant year-on-year decrease in the net gearing ratio compared to 2024. This marks CIFI's first annual profit since the industry entered an adjustment cycle in 2022. The return to profitability is the outcome of collaborative efforts with creditors and other stakeholders over recent years to navigate challenges—from prioritizing project deliveries to maintain operational stability to completing domestic and overseas debt restructurings for a leaner operational footing. CIFI's actions demonstrate that the foundation for 'survival' has been solidified, and the path to 'recovery' is becoming increasingly clear.

The foundation for survival was built on completing project deliveries and the debt restructuring. Following the emphasis on ensuring housing deliveries from the July 2022 Politburo meeting, project completion became a critical priority. Against this backdrop, CIFI consistently placed 'ensuring deliveries' at the forefront of its operations. According to company disclosures, from 2022 to 2024, the company delivered over 270,000 new homes across 76 cities in China, achieving an overall delivery rate of 95%. Deliveries continued into 2025, with an additional 18,400 units delivered in the first three quarters, raising the overall delivery rate to 98.5%. By the end of 2025, CIFI's cumulative deliveries over four years approached 300,000 units, signaling the essential completion of its delivery commitments. This track record earned CIFI support from local governments and a positive social reputation, while also solidifying its customer base. More importantly, the normal operation and successful delivery of projects, which helped maintain asset values, established the fundamental trust necessary for subsequent debt restructuring negotiations. Leveraging this trust, CIFI achieved a substantial breakthrough in its debt restructuring. On September 15, 2025, the company's domestic bond restructuring plan was approved by vote; on December 29 of the same year, CIFI announced that all conditions for its overseas debt restructuring had been satisfied, making the restructuring plan officially effective. Consequently, CIFI became one of the first private developers in the industry to complete both domestic and overseas debt restructurings. The implementation of this restructuring not only brought an approximate RMB 40 billion gain, facilitating the return to profitability, but also significantly improved the company's capital structure: total interest-bearing debt is expected to decrease from RMB 84.2 billion as of the end of June 2025 to around RMB 50 billion, positioning CIFI among the private developers with the lowest debt levels. Furthermore, the debt structure shifted from 'short-term, high-interest' to 'long-term, low-interest,' reducing the financial burden and creating a valuable window for operational recovery.

The path to recovery is centered on a new development model characterized by 'low debt, light assets, and high quality.' For CIFI, completing the restructurings of domestic and overseas credit bonds is merely the prerequisite for 'survival'; the journey to 'stand up' is far from straightforward. Data from the National Bureau of Statistics shows that national real estate development investment in 2025 was RMB 8,278.8 billion, down 17.2% year-on-year; the area of new construction starts fell by 20.4%; and sales value of new commercial housing was RMB 8,393.7 billion, a decrease of 12.6%. The industry as a whole remains under pressure. CIFI's announcement indicated that, excluding the debt restructuring gain, the company expects a core net loss attributable to shareholders of approximately RMB 7.5 to 9 billion for 2025, which is wider than the core net loss of RMB 5.825 billion in 2024. The company attributed this mainly to a decrease in revenue due to fewer real estate projects reaching the revenue recognition stage of completion, coupled with ongoing market adjustments putting pressure on gross profit margins. This implies that while the accounting profit from the restructuring has returned the company to profitability, a genuine operational recovery will still require time. However, CIFI has charted a clear direction for its next phase of development. During a presentation for overseas creditors on May 12, 2025, Chairman Lin Zhong explicitly outlined a 'low debt, light assets, high quality' development model for the first time, establishing three key strategic pivots. First, the company will focus on its self-operated development business. CIFI currently holds a total land bank of 25 million square meters, over 80% of which is located in Tier 1 and Tier 2 cities. The company plans to gradually realize the value of this existing land bank in line with market supply and demand. Starting in the second half of 2025, new project phases launched in cities like Kunming, Guiyang, and Chengdu received positive market feedback. It is reported that CIFI also plans to launch new phases of projects in Guangzhou, Chengdu, Taiyuan, and other cities in 2026, aiming to gradually restore sales performance through new supply. Second, the company will strengthen its rental income business. Revenue from CIFI's investment properties continues to grow, reaching RMB 786 million in the first half of 2025. For example, the Shanghai Changshou · CIFI Plaza project saw average daily footfall exceed 30,000人次 in 2025, a 42% increase year-on-year, driving annual sales close to RMB 300 million, up 20% year-on-year. By enhancing operational efficiency to boost rental yields, stable rental income is becoming a significant source of cash flow for CIFI, with its proportion of total revenue gradually increasing. Additionally, the company will explore asset management business opportunities. In the era of a存量 real estate market, few companies possess nationwide, full-chain, and multi-format development and operational capabilities. CIFI plans to leverage its accumulated experience to cautiously participate in projects through a light-asset asset management model. By holding minority equity stakes and providing end-to-end management services for capital partners, the company aims to generate returns from both its equity investments and asset management fees, gradually building a new growth curve. Having navigated its most challenging period, CIFI has demonstrated over three years the possibility of a turnaround. However, for the company today, completing the debt restructuring is just the starting point for 'standing up'; a true recovery will require the passage of time and the delivery of solid operational results. From an industry perspective, CIFI's path to recovery is now clear. With the operational resilience and team execution capability demonstrated throughout the cycle, the company is poised to become a benchmark case of a successful turnaround for private developers in the current industry adjustment.