Nearly 12 billion yuan accrued over three years, Greentown China enters the comprehensive governance phase of the China Communications Construction Company group.

On March 31, Greentown China released its 2025 annual performance report, with a net provision for related asset impairment and losses from fair value changes of 4.921 billion yuan—this is the second time in the past three years that Greentown China has provisioned nearly 50 billion yuan in a single year. Alongside the annual report, there was also a key personnel adjustment: Guo Jiafeng retired and exited the company; replacing him is Geng Zhongqiang, a veteran “China Communications” figure who has long led financial control and debt optimization, and participated throughout the restructuring and listing process of the China Communications Property segment.

This is not an ordinary personnel adjustment. On March 17, during an investigation in Hangzhou, Song Hailiang, Party Secretary and Chairman of China Communications Group, clearly stated: as the largest shareholder, China Communications Group will provide Greentown China with stronger development support. This reshuffling means that Greentown China has officially entered a new stage of comprehensive and in-depth governance by the major shareholder, moving from being led by the founding team and managed by professional managers. What lies before Geng Zhongqiang is not only the 4.921 billion yuan annual provision, but also impairment pressure totaling nearly 12 billion yuan accumulated over three years—this is the exam question he needs to face head-on.

Three years of nearly 12 billion yuan in impairment provisions: the cost of destocking

In 2025, Greentown China provisioned related asset impairment and losses from fair value changes totaling 4.921 billion yuan. This isn’t the first year—provisions were 2.035 billion yuan in 2023 and 4.917 billion yuan in 2024. Added up over three years, the total is 11.873 billion yuan.

This huge impairment directly reflects the consequences of Greentown China’s “scale first” strategy in recent years. From 2021 to 2025, the number of new projects added by Greentown China was 101, 27, 38, 42, and 50 respectively, corresponding to land acquisition costs of 93.8 billion yuan, 40.8 billion yuan, 59.5 billion yuan, 48.4 billion yuan, and 51.1 billion yuan. In many years when property developers have been cutting back on land purchases, Greentown China still maintained enough “flour” reserves. But getting more also means the probability of stepping into pitfalls increases.

At the 2024 interim results conference, Greentown China’s management itself broke down this pitfall: inventory impairment was mainly concentrated in 2021, meaning the batch of projects acquired in the second half of 2020—some parking spaces or business formats had sale prices that fell short of expectations, so provisions had to be made. In addition, some came from cooperative projects: the partners’ earnings fell short of expectations, their debt repayment capacity declined, and impairment provisions were therefore also recorded for receivables.

Yan Yuejin, Deputy Dean of the Shanghai E-House Real Estate Research Institute, said that making impairment provisions is an accounting treatment for assets whose recoverable amounts in the future are lower than their book values, with the difference recorded as a loss in the current period. Provisioning itself is a normal accounting practice, but if a company continues to make impairment provisions on a sustained and large scale, it is likely to trigger market attention and doubts about its operating condition.

It is worth noting that at the earnings briefing held on March 31, Greentown China’s management stated that in 2026 it will continue to increase efforts to destock inventory, and that the profit figures are still expected to face some pressure. This means the pressure to provision impairments will not disappear entirely in the short term.

Debt structure optimization: short-term debt share hits a new low in history

While impairment provisions are eroding profits, Greentown China’s balance sheet is quietly changing.

As of the end of 2025, Greentown China’s total borrowings were 133.386 billion yuan, down 2.77% from 137.187 billion yuan at the end of the previous year. The proportion of borrowings due within one year to total borrowings was 18.6%, the lowest level in history.

Judging from the changes in the debt maturity structure, from 2021 to 2025, the proportion of short-term debt for Greentown China was 35.2%, 28.4%, 22.7%, 20.1%, and 18.6%, showing a year-by-year downward trend. According to Greentown China’s disclosures, this change mainly comes from two types of operations: first, using long-term financing to replace part of short-term borrowings; second, leveraging the credit endorsement of the major shareholder, China Communications Group, to issue multiple tranches of corporate bonds and medium-term notes at lower costs.

As for financing costs, in 2025 Greentown China’s weighted average financing cost for its total borrowings was 3.3%, down 60 basis points from 3.9% in 2024. Looking at data over the years, from 2021 to 2025, Greentown China’s financing costs were 4.6%, 4.3%, 4.1%, 3.9%, and 3.3% respectively, also showing a continuous downward trend. According to publicly available information, for the several tranches of corporate bonds newly issued by Greentown China in 2025, the coupon rates were between 2.8% and 3.2%, placing them in a relatively low range among similarly rated property developers in the same period.

Greentown China’s financing costs continuing to fall are directly related to the state-owned enterprise credit endorsement of its largest shareholder, China Communications Group.

Backed by the state-owned enterprise halo of China Communications Group, Greentown China sells over 250 billion yuan worth of properties in a single year. With contracted project sales of 153.4 billion yuan and equity sales of 104.3 billion yuan—both ranking fifth in the industry—by looking only at sales data, Greentown is still a major player at the table.

But when you open the income statement, things do not look as good. In 2025, Greentown China’s revenue was 154.966 billion yuan, down 2.26% year on year; profit attributable to shareholders was 71 million yuan, down 95.55% year on year. For this performance, Greentown China’s explanation is that the real estate market is still in an adjustment period; to promote long-term development, the company continues to actively push forward the destocking of long-dated inventory, which has led to declines in gross profit margin recognized on revenue and in the performance of joint ventures and associated companies.

China Communications’ entry: the curtain falls on the old Greentown, and a new player takes the stage

With ongoing impairment pressure and weaker profitability, Greentown China took the lead in moving its own “personnel chessboard.”

The day before the financial report was released, on March 30, Greentown China announced a series of major personnel changes. Geng Zhongqiang replaced Guo Jiafeng as Acting Administrative CEO, taking overall responsibility for day-to-day operational management.

Guo Jiafeng joined Greentown in 2000 and was one of the core managers in the era of the old Greentown. His exit means the end of an era. Geng Zhongqiang, who entered Greentown China in 2019 and served as Executive Director and Executive General Manager, has long led financial control and debt optimization, and is a core figure through which China Communications Group engages with Greentown China. From 2018 to 2019, he served as President and Deputy Party Secretary of China Communications Property, and at the same time he also served as a Director of China Communications Real Estate Group, participating throughout the restructuring, listing, and scaled development of the property business under China Communications.

The subtext of this personnel reshuffle is very clear: the founding team steps back, and the major shareholder takes over.

In fact, signals had already been sent out earlier. On March 17, during an investigation into Greentown China in Hangzhou, Song Hailiang, Party Secretary and Chairman of China Communications Group, made clear statements: as the largest shareholder, China Communications Group will provide Greentown China with greater development support, strengthen communication and coordination with major shareholders, and jointly help Greentown China achieve steady and sound development. During the investigation, Song Hailiang also specifically emphasized strengthening corporate governance and control, comprehensively preventing operating risks, and strengthening the building of the leadership team.

In addition to the personnel adjustment involving Geng Zhongqiang, Greentown China also announced several other changes: Zhou Anqiao, a non-executive director; Zhu Yuchen, an independent non-executive director and member of the remuneration committee and audit committee, and Chair of the nomination committee; all resigned due to “the need to handle personal affairs and other businesses.” At the same time, Chen Guobang was appointed as a non-executive director, and Xiong Liangjun was appointed as an independent non-executive director, and also concurrently served on the three major committees—audit, nomination, and remuneration; Liu Chengyun was appointed as Chair of the nomination committee.

After a round of adjustments, the China Communications system has further taken control of Greentown China’s core governance authority by taking charge from the operating side, locking discourse power from the rule side, and aligning the supervisory side with the strategy.

However, personnel changes are never a universal key to solve problems. With destocking pressure mounting, impairment provisions continuing, and profitability weakening—these hard bones, placed before the newly appointed Acting Administrative CEO Geng Zhongqiang, also cannot be avoided.

The era of the old Greentown has ended, and the new chess player from the China Communications system has already taken his position. With a change of people, can profits be turned around? This exam question is only just beginning.

Beijing Business Today sent an interview inquiry letter to Greentown China about the company’s major changes in its 2025 annual performance, investment strategy, operating balance, and strategic adjustments, but as of the time of publication, it had not received a response from Greentown China.

Beijing Business Today Reporter Li Han