Country Garden Narrows H1 Loss by 16.3% Amid Revenue Decline

Country Garden (02007.HK) reported a net loss attributable to shareholders of ¥15.62 billion ($2.19 billion) for the first half of 2026, narrowing its losses by 16.3% year-over-year, according to its interim results filed on August 28. The embattled property developer achieved this despite a significant 39.3% drop in revenue to approximately ¥44.08 billion.

Revenue Slumps on Fewer Deliveries

The company attributed the steep decline in revenue primarily to a reduction in the volume of completed and delivered properties. Country Garden stated that it is in the final stages of its government-mandated "guaranteed delivery" program, which has led to a substantial decrease in recognized income for the period.

Profitability remains under severe pressure from legacy issues. The developer recorded a gross loss of roughly ¥5.99 billion, which included impairment charges of ¥6.17 billion on its properties. Country Garden noted that its current earnings are negatively impacted by the sale of projects built on land acquired at peak market prices, which are now being sold in a downturn. The company also provisioned for ¥6.2 billion in inventory impairments and ¥3.8 billion for financial assets.

Sales Stabilize as Operations Refocus

On the sales front, Country Garden reported more stable performance. For the first six months of the year, the company achieved equity contracted sales of ¥14.25 billion on a sales area of 1.83 million square meters. According to data from China Real Estate Information Corp. (CRIC), Country Garden's operating area for the January-to-July period reached 2.33 million square meters, allowing it to re-enter the industry's top ten.

Ad

In its filing, the company described 2026 as a pivotal year for shifting from "ensuring housing delivery" to achieving "normal operations." It has made some progress on its balance sheet, with total borrowings decreasing by ¥5.3 billion from the end of 2025 to ¥142.66 billion. Total cash stood at ¥16.68 billion.

Market Outlook and Future Strategy

Country Garden acknowledged that the property market remains bifurcated, with tier-one and strong tier-two cities showing signs of bottoming out while smaller cities continue to face adjustments. The company plans to maintain a flexible "one policy per project" strategy, adjusting pricing and supply to match market conditions.

Looking ahead, while real estate development will remain its core business, Country Garden is also expanding into technology-driven construction and property management services for third parties. The company stated that after focusing on survival through debt restructuring and project delivery, its next challenge is to restore its operational capabilities and sustainable profitability.