Jianye New Life: For every 1 yuan earned, 0.8 yuan is eaten up by bad debts | Annual Report Turmoil⑤

Text / Leju Finance and Economics Yan Minghui

Recently, many have been writing about Hu Baosen’s story—his feelings and struggles while stranded in Hong Kong in his seventies, his rise and fall with Jianye Group, his past path and future prospects, and his assets, debts, and legal issues as a former “King of Henan”…

Some praise his sense of responsibility; others doubt his choices. Yet all share a sigh and wonder when he might return to his hometown.

The industry says that since the second half of 2025, Hu Baosen has been staying in Hong Kong long-term to handle offshore debt restructuring and capital operations; before the 2026 Spring Festival, at Jianye’s management annual meeting, he participated in an unprecedented way—attending online.

Shortly after this themed “Strong Collaboration, Youthfulization, Innovation” annual meeting, Jianye New Life (09983.HK), one of Jianye’s core assets, released its 2025 full-year performance report.

Looking at the financials and data, this report is not very optimistic. Under the deep industry adjustment and group debt background, Jianye New Life is undoubtedly facing significant challenges.

“True moat isn’t cold numbers of scale, but the professionalism and warmth felt by customers at each touchpoint.”

Looking ahead, Jianye New Life has written that it aims to “strive to find a ‘high-quality, warm, resilient’ growth path amid the industry’s transformation wave.”

Swallowed Profits

In 2025, Jianye New Life’s revenue and profit both declined.

Data shows that during the reporting period, total revenue was about 2.768 billion yuan, down 6.2% from 2024; gross profit was about 544 million yuan, down 15.1% year-on-year, with gross margin dropping from 21.7% to 19.6%; net profit sharply decreased from 238 million yuan to 167 million yuan, a decline of about 29.8%, with a net profit margin of around 6.0%, compared to about 8.1% in the same period last year.

In terms of revenue structure, property management services—its “ballast”—contributed about 2.30 billion yuan, roughly flat from the previous year. However, this segment’s gross margin fell from 21.3% to 19.2%.

“To improve customer satisfaction, higher-quality service costs were added,” but with stagnant revenue growth, costs rose rigidly, further squeezing profitability.

In terms of scale, “actively withdrawing from loss-making communities,” by the end of 2025, Jianye New Life managed about 194 million square meters, a decrease of 12% from the previous year.

Additionally, revenue from community value-added services and non-owner value-added services both declined. The former fell 21.0% to 430 million yuan, while the latter plummeted from 109 million yuan in 2024 to 39 million yuan, a drop of about 64.5%.

Jianye New Life explained that the decrease in community value-added service revenue was mainly due to the ongoing downturn in the domestic real estate market, leading to fewer renovation-related services like balcony sealing and inspection; also affected by weak domestic consumer confidence and reduced sales service income from group parks.

The decline in non-owner value-added services was mainly due to ongoing industry adjustments, with proactive scaling back of value-added activities, including a 55 million yuan drop in pre-sale services, on-site services, and housing brokerage sales.

One of the most notable data in the financial report is that “financial and contractual asset impairment losses” surged from 74.9 million yuan in 2024 to 138 million yuan in 2025, an increase of about 84.5%.

Jianye New Life explained this was due to weak domestic real estate and low consumer confidence, leading to “increased receivables from small property owners and slower collection of receivables.”

Property management companies often adopt a “service first, pay later” model. During macroeconomic downturns, this becomes a double-edged sword. When owners’ willingness and ability to pay decline, accounts receivable continue to rise, and bad debt provisions must be increased accordingly, directly eroding current profits.

Jianye New Life’s 138 million yuan impairment loss accounts for 82.6% of its net profit for the period. From one perspective, this means that for every yuan earned, about 80 cents are “eaten” by bad debts.

Excluding impairment and other non-operating factors, Jianye New Life’s core net profit attributable to shareholders in 2025 was about 280 million yuan, only slightly down 4.8% from 294 million yuan in 2024.

Depleted Cash

“Breaking out of the vicious cycle of ‘cost-cutting reducing quality’… freeing up manpower to focus on warm services and emergency response.” In its performance report, Jianye New Life envisions a future of comprehensive cost reduction and efficiency enhancement, aiming to stimulate organizational effectiveness through “human-machine collaboration.”

However, the employee strikes that occurred in Henan, the company’s main base, in the second half of 2025 reveal another side of this narrative.

According to public information, Hui County Jianye No.1 City was affected by “most owners not paying property fees for four months, leading to unpaid wages for staff and service suspension.” Yet, confusingly, other reports state that Zhengzhou Jianye Spring Garden had a property fee collection rate of up to 90%, and some owners in Xinyang Jianye City prepaid 2-5 years of property fees, with some even paying until 2028.

The issues Jianye New Life faces, besides “owner arrears,” seem to include: where did all the collected property fees go?

The ideal of “human-machine collaboration” has been proposed, but the reality is: by the end of 2025, Jianye New Life’s cash and cash equivalents were only 413 million yuan, a sharp decrease of 65.3% from 1.19 billion yuan at the end of 2024.

Where did the money go? Jianye New Life has not disclosed detailed operating cash flow data, but industry observers suggest analyzing receivables and dividend history.

Data shows that as of the end of 2025, trade and other receivables totaled about 3.18 billion yuan, an 11.4% increase year-on-year, far exceeding revenue growth. Among these, trade receivables reached 3.628 billion yuan, up 9.0% from 3.327 billion yuan at the end of last year.

The aging structure of receivables is also noteworthy. As of the end of 2025, receivables over three years old surged from 474 million yuan to 1.265 billion yuan, increasing their proportion from 14.2% to 34.8%.

Industry observers say, “The rapid growth of long-aged receivables indicates increasing difficulty in collection and higher bad debt risk.”

Last mid-year, Jianye New Life paid an interim dividend of 0.033 HKD per share, totaling 39.125 million HKD. In this earnings report, the board did not recommend declaring a final dividend for 2025.

However, over the past four years, Jianye New Life has maintained a high dividend payout: 576 million yuan in 2021, 481 million yuan in 2022, 392 million yuan in 2023 despite a loss of 578 million yuan, and 215 million yuan in 2024.

The largest beneficiary of these high dividends is undoubtedly controlling shareholder Hu Baosen, who holds about 65.27% of Jianye New Life’s shares.

From “scale worship” to “capability return,” Jianye New Life’s transformation direction is undoubtedly correct. But transformation takes time—and money.

Earlier this year, veteran real estate executive Yan Xuewen, aged 43, was appointed as Executive Director and CEO of Jianye New Life; after the adjustment, Wang Jun no longer served as CEO, but continued as Chairman and Executive Director, focusing on group strategy and major oversight.

Can Yan and Wang lead Jianye New Life to truly “increase efficiency” and “improve quality” while reducing costs, winning customer trust and “buy-in”? Can community value-added services be transformed from an “additional task” into a stable, sustainable profit source to offset growth bottlenecks in basic property management?

Related companies: Jianye New Life HK09983, Jianye