From "Zero Defaults" to Financing Breakthrough: The Adversity Survival Model Behind China Urban Development Holdings' Annual Report

In the context of a deep adjustment in the industry, New Town Holdings has navigated the cycle with steady operations and opened up long-term development space through structural transformation.

Against the backdrop of a deep industry adjustment, New Town Holdings has once again delivered an annual report of benchmark significance.

On March 27, New Town Holdings (601155.SH) officially released its 2025 annual report. In the current environment, New Town Holdings not only continued to maintain profitability but also achieved positive operating cash flow for eight consecutive years.

More importantly, its public market debt remains “zero default.” In an environment where industry confidence has not yet fully recovered, such performance is not just “stable,” but also a model for the real estate industry navigating the cycle.

This real estate company, known for its dual-drive of “real estate + commerce,” is regaining market trust with more stable cash flow, stronger commercial capabilities, and continuously improved financing performance. From “zero default” to financing progress, from commercial operations stabilizing to innovations in asset securitization, New Town Holdings is outlining a realistic path for real estate companies to break through.

Profit resilience is evident: the commercial segment continuously contributes stable profits.

In 2025, as the real estate industry continues to clear out, the profit statement has become an important benchmark for assessing the real operational capabilities of enterprises.

From the annual report data, New Town Holdings achieved operating revenue of 53.012 billion yuan, net profit attributable to shareholders of the listed company was 680 million yuan, and net profit attributable to the parent company after deducting non-recurring gains and losses was 614 million yuan. Against the backdrop where most private real estate companies are still in a state of loss or minimal profit, this achievement is particularly rare.

More valuable is the improvement in profit quality. In 2025, the company’s overall gross margin reached 27.42%, an increase of 7.62 percentage points year-on-year, indicating a clear recovery in profitability; at the same time, the average financing cost decreased to 5.44%, down 0.48 percentage points year-on-year, reflecting the financial improvement effects brought about by the optimization of financing structure.

From an industry perspective, the current real estate market is still in a deep adjustment phase, with dual pressures on both sales and financing persisting. In this context, achieving stable profitability directly verifies the operational quality and risk control capabilities of the enterprise. New Town Holdings has completed a proactive switch in its profit structure by actively shrinking low-margin development businesses and strengthening high-margin commercial operations.

This is particularly evident in the business structure. The commercial operations segment continuously contributes stable cash flow and profits, becoming the core support of the company’s profit side. In 2025, New Town Holdings’ total revenue from commercial operations reached 14.09 billion yuan, a year-on-year increase of 10%, accounting for 25% of total revenue; the gross profit from property leasing and management business reached 9.095 billion yuan, with its proportion of total gross profit increasing from 48% to 63%, and the gross margin reaching 70%.

It can be seen that New Town Holdings has gradually freed itself from dependence on development sales, forming an “internal profit system” centered on commercial operations. This shift not only enhances the company’s cyclical resilience but also lays the foundation for the future restructuring of its valuation system.

Blood generation capacity remains strong: “zero default + high delivery” double realization.

If profitability is the “physique” of an enterprise, then credit records are the “lifeline” of an enterprise in the capital market. In recent years, the credit system in the real estate industry has experienced severe turbulence, while New Town Holdings has become one of the few privately-owned real estate companies that have consistently maintained “zero default” in the public market.

The annual report shows that in 2025, New Town Holdings timely repaid 5.855 billion yuan of bonds in the domestic and foreign public markets, continuing to maintain its “zero default” record.

This achievement is not accidental but is based on ongoing cash flow management and optimization of debt structure. As of the end of the reporting period, New Town Holdings had cash on hand of 6.8 billion yuan, with a net debt ratio of 56.97%, maintaining a relatively safe range; at the same time, the net operating cash flow was 1.425 billion yuan, and it has been positive for eight consecutive years.

The indicator of “positive operating cash flow for eight consecutive years” means that the company does not rely on financing as “blood transfusion” but has the ability to generate its own cash flow, which is the fundamental reason for its continued fulfillment of debt commitments.

At the same time, New Town Holdings has also demonstrated a high level of execution in “ensuring delivery.” In 2025, New Town Holdings delivered more than 38,000 housing units throughout the year, and the cumulative delivery volume over the past three years has exceeded 278,000 units.

Although the sales side has contracted due to industry impacts, its cash collection performance remains robust. In 2025, New Town Holdings achieved a contract sales amount of 19.27 billion yuan, with a sales area of approximately 2.5358 million square meters; the cash collection amount reached 21.276 billion yuan, with a collection rate of 110.41%. The high collection rate indicates that project fund turnover efficiency is high, providing important security for the company’s cash flow safety.

It can be said that the dual realization of “zero default + high delivery” has given New Town Holdings a distinct credit label in the current industry. This not only enhances the trust of financial institutions and investors but also opens up space for subsequent financing.

Financing breakthrough and evolution: building full-cycle capabilities of “investment, financing, fundraising, construction, management, and exit.”

In the real estate industry, the recovery of financing ability is often seen as a key indicator for companies to emerge from difficulties. In 2025, New Town Holdings frequently achieved breakthroughs in domestic and foreign capital markets, releasing clear signals of recovery.

In terms of overseas financing, in June 2025, New Town Development successfully issued a 300 million USD senior unsecured bond, becoming the first privately-owned real estate company to restart overseas financing in nearly three years; in September, the company issued 160 million USD of priority guaranteed notes through its subsidiary. In terms of domestic financing, the company issued medium-term notes several times throughout the year, with scales of 1 billion yuan, 900 million yuan, and 1.75 billion yuan, all guaranteed by Zhongdai and rated AAA, with the lowest coupon rate being only 2.68%.

In the current industry financing environment, “being able to raise money” has become an important signal in itself, while New Town Holdings’ breakthroughs in multiple channels and batches of financing further strengthened market recognition of its credit recovery.

More strategically significant is New Town Holdings’ innovative breakthroughs in the field of asset securitization. In November 2025, New Town Holdings successfully issued “Wuyue Plaza Intermediary REITs,” with an issuance scale of 616 million yuan, along with a 410 million yuan debt part. This product is also the first consumer-type intermediary REITs in the country and the first similar product issued by a privately-owned real estate company in the A-share market, with significant industry demonstration significance.

This REITs, with high-quality commercial assets—Shanghai Qingpu Wuyue Plaza—as the underlying asset, realizes asset securitization to activate existing assets, supplementing cash flow for the company and optimizing the asset-liability structure. This innovation also marks a further deepening of New Town Holdings’ transformation from a traditional developer to an “asset operator + asset manager.”

Around this transformation direction, New Town Holdings is building full-cycle capabilities of “investment, financing, fundraising, construction, management, and exit”: selecting quality commercial assets in the “investment” end, broadening financing channels in the “financing” end, raising funds through ABS and future REITs in the “fundraising” end, improving operational efficiency in the “construction” and “management” ends, and realizing asset value release and reinvestment in the “exit” end.

The scale and quality of commercial assets provide a solid foundation for this model. By the end of 2025, New Town Holdings had laid out 207 complex projects in 141 cities across the country, with the operating area of Wuyue Plaza reaching 16.4907 million square meters and a stable occupancy rate of 97.86%.

The capital market has also responded positively to New Town Holdings’ transformation.

In the fourth quarter of 2025, internationally renowned investment bank Morgan Stanley announced an upgrade of New Town Holdings’ rating to “overweight” and raised its target price. In its research report, it pointed out that New Town Holdings achieved unexpected rental growth by increasing market share and continued to be optimistic about the asset securitization prospects of New Town Holdings. Accordingly, Morgan Stanley raised the target price of New Town Holdings by 25% to 19.7 yuan, while also raising its earnings per share forecast for 2026 to 2027 by 3-5%.

Morgan Stanley’s research report noted that despite the overall retail market performing flat, New Town Holdings achieved an 11% revenue growth in the first nine months of 2025, and same-store sales maintained steady growth. “We attribute this to the company’s strong position in core urban areas and expect to gain more market share during the resource integration process. Combined with the government’s plans to boost consumption in the latest ‘14th Five-Year Plan,’ we predict its rental income will grow at a compound annual growth rate of about 8%, reaching 15.2 billion yuan by 2027.”

In addition to the impressive performance in the commercial sector, Morgan Stanley further pointed out in its research report that the drag of real estate development business on New Town Holdings’ overall performance is continuously weakening. “Although the contract sales amount for 2026 may further shrink due to limited saleable resources, we believe this is positive for profitability. As property bookings decrease in the coming years, the expected drag of development properties on profitability will significantly decrease, potentially leading to a significant rebound in company profits, with core profits expected to recover to 2.6 billion yuan in 2027 (with a compound annual growth rate of 45% from 2024 to 2027).”

Based on this, Morgan Stanley raised its earnings per share forecast for New Town Holdings for 2026 to 2027 by 3-5%, and increased the target price by 25% to 19.70 yuan, reflecting stronger rental income, improved liquidity, and the release of investment property values.

In fact, besides Morgan Stanley, New Town Holdings has continuously gained recognition in the capital market, receiving positive recommendations from over 20 securities firms, including Guotou Securities, Huatai Securities, Shenwan Hongyuan, CITIC Construction, Huachuang Securities, Ping An Securities, Northeast Securities, Guotai Junan, Kaiyuan Securities, Southwest Securities, Galaxy Securities, Industrial Securities, Changjiang Securities, and CITIC Jinzhong, among others, giving the company “recommend” or “buy” ratings.

Changjiang Securities, in a recent research report, analyzed that industry policy expectations are gradually improving, combined with the fact that New Town Holdings’ debt peak has passed and financing capability is continuously recovering, market risk appetite is expected to gradually increase; the relatively abundant land reserves still provide certain guarantees for sales; the contribution of self-held commercial properties raises gross margins, becoming an important source of profitability and financing for the company, and the company’s value is expected to be reassessed, maintaining a “buy” rating.

From the recovery of profitability to the adherence to the credit system, and then to the reconstruction of financing channels and the upgrade of asset models, New Town Holdings has demonstrated a clear development main line in 2025: during the deep adjustment of the industry, adhering to the “camel spirit,” it operates steadily through the cycle and opens long-term space through structural transformation. This also means that in the context of industry clearing, quality private real estate companies still have the ability to survive and develop. The resilience and evolutionary path demonstrated by New Town Holdings are providing a realistic basis for rebuilding market confidence.