Wu Bingqi has submitted his first financial report since taking office. How much farther does OCT Group need to go before it can turn a profit?

How will Wu Bingqi’s professional background affect OCT’s turnaround-to-profit strategy?

On April 2, at the 2025 annual performance release conference of Shenzhen OCT Co., Ltd. (stock abbreviation: OCT A), the main seat under the spotlight welcomed a new face once again. This is the first time that, since Wu Bingqi was transferred to OCT Group, the newly appointed Chairman has led a team to directly face the scrutiny of the capital market.

However, what he took over from his predecessor was a performance scorecard full of challenges: in 2025, the company’s operating revenue fell sharply, and the net loss attributable to the parent company shareholders widened further.

With this heavy set of results, can the new boss lead OCT out of the mire? One positive signal is that the company’s operating cash flow has been positive for the third consecutive year and also surged significantly year over year, showing that this real estate and cultural tourism giant is still working to adjust its course.

Both revenue and profit declined, and the real estate business shrank significantly

According to the financial report, in 2025, OCT A recorded operating revenue of 31.381 billion yuan, down 42.32% year over year; among them, the integrated tourism and real estate businesses were down 22% and 63% respectively year over year; net profit attributable to shareholders of the listed company was -14.496 billion yuan, further widening from -8.662 billion yuan in 2024, with a year-over-year loss increase of 67.35%.

In terms of business segments, the performance decline was mainly dragged down by the real estate business. During the reporting period, the company’s real estate business achieved operating revenue of 9.848 billion yuan, down sharply by 63.41% year over year, with a gross profit margin of only 7.62%. By contrast, although the integrated tourism industry—the other main business—also saw revenue decline year over year by 21.71% to 21.372 billion yuan, the drop was far smaller than that of the real estate business.

In its financial report, the company explained that the main reasons for the substantial loss include: to adapt to changes in the market environment, the company promoted inventory reduction through asset transfers and other means, and losses were generated from the related transactions; at the same time, both the amount of revenue recognized upon project settlements and the gross profit margin decreased compared with the same period of last year. In addition, an asset impairment loss of as much as 9.977 billion yuan is also an important factor behind the expansion of losses for the current period.

What is worth noting is that this is the fourth consecutive year that OCT A has recorded losses. The company’s operational difficulties had already begun to show during the tenure of former Chairman Zhang Zhenkao. During his 3.5-year term, OCT A slid from a profit high point into a massive-loss range. From 2022 to 2024, the company recorded net losses of 10.905 billion yuan, 6.492 billion yuan, and 8.662 billion yuan respectively, with total cumulative losses over four years exceeding 40 billion yuan.

During his term, Zhang Zhenkao mainly pushed an operating strategy of “strong destocking and accelerating cash collection,” promoting large-scale disposal of assets and voluntarily shrinking the front line. In 2025, OCT A was extremely cautious in land investment, bidding for only one residential land parcel in Shapingba District, Chongqing—Longqencan—at a cost of 457 million yuan in March, which was also its only new project for the entire year. Overall, the company basically paused large-scale additions to land reserves, while accelerating the transfer of equity in its cultural tourism and real estate projects, continuously raising funds to ease debt pressure.

In September 2025, Zhang Zhenkao resigned from all positions at OCT upon reaching the statutory retirement age. After that, Wu Bingqi, who has professional experience including China Resources Land and China State Construction Engineering, took over as Chairman. However, the company’s first annual financial report he delivered after taking office failed to reverse the loss situation and instead showed further deterioration, leaving the newly appointed management team facing unprecedented pressure to turn losses into profits.

Operating cash flow surges against the trend, focusing on core main businesses

Despite the pressure from losses, OCT A has demonstrated positive signals in internal management and operational efficiency. During the reporting period, the company’s net cash flow from operating activities reached 12.501 billion yuan, compared with 5.362 billion yuan in 2024, up 133.13% year over year, staying positive for three consecutive years. In the view of analysts, this indicates that the company has achieved significant progress in strengthening sales cash collection, reducing costs and improving efficiency, and coordinating capital, thereby stabilizing its core operating fundamentals.

To respond to changes in the market, the company has actively implemented lean management. The data shows that in 2025, the total of selling expenses and administrative expenses decreased by 27% year over year. In addition, as of the end of 2025, OCT A’s total interest-bearing liabilities were 118.5 billion yuan, of which the proportion of medium- and long-term borrowings reached 69%; the average financing cost has been decreasing year by year, and the financial structure remains sound.

Nandu·Bay Finance reporter noted that the company also adjusted and optimized its headcount. The financial report shows that at the end of 2024, OCT A had a total of 19,591 employees. Compared with the 2025 data, the company’s employee count was further optimized to 16,478, a net decrease of 3,113 employees versus the end of 2024, with a reduction rate of 15.89%.

Facing challenges, OCT A has clearly stated its future development direction in its annual report. The company will adhere to the “dual-wheel drive” approach of cultural tourism and real estate, guided by “market-oriented, professional, and systematized” principles, in order to enhance its core competitiveness.

Specifically, on the cultural tourism side, its core base business received nearly 80 million visitors throughout the year, and it is seeking new growth points by expanding through project upgrades, IP collaborations, and a light-asset model. Meanwhile, the real estate business continues to follow a contraction-and-focus strategy: it completed 177.3 billion yuan in contracted sales for the year, and it is striving to revitalize existing assets and build a “good housing” product system.

“2025 is a particularly difficult year in OCT’s reform and development history.” Wu Bingqi said at the beginning of his Chairman’s address. Although OCT is still in the painful period of strategic adjustment, improvements in cash flow and cost control have laid the foundation for future development. Next, the market will closely watch whether this new boss can lead OCT through the cycle and truly restore its profitability from the “dual-wheel drive.”

Written and reported by: Nandu·Bay Finance reporter Sun Yang