BigGo Finance: Country Garden H1 revenue hits 44.1 billion yuan, losses narrow 16%; net assets hold at 31 billion yuan

Country Garden reported first-half 2026 revenue of approximately 44.1 billion yuan, with losses narrowing 16.3% year-on-year, while net assets remained positive at roughly 31 billion yuan. Profit pressure stemmed primarily from shrinking delivery volumes, concentrated recognition of high land-cost projects, and approximately 10 billion yuan in impairment provisions, though selling and administrative expenses fell 19.7% year-on-year. Attributable contracted sales reached about 14.25 billion yuan in the first half, and the company re-entered CRIC's top 10 by construction area under management. Following its offshore debt restructuring, Country Garden has completed two consecutive scheduled payments totaling over 2.8 billion yuan. Its "one body, two wings" strategy advanced steadily, with Phoenix Zhituo Construction Management surpassing 200 cumulative construction management projects and Tengyue Construction Technology deploying 28 building robot models commercially. Under Chairwoman Yang Huiyan's leadership, the company also established two special task forces focused on product R&D and AI-driven efficiency gains to accelerate internal digital transformation.

Key Elements

Country Garden (02007.HK) released its 2026 interim results on August 28, reporting first-half revenue of approximately 44.1 billion yuan (approximately $6.6 billion). While the company remains in a transitional loss phase, the loss narrowed by approximately 16.3% compared with the same period last year. As of end-June, total assets stood at approximately 745.5 billion yuan (approximately $111.1 billion), with net assets of roughly 31 billion yuan (approximately $4.6 billion), maintaining a positive position.

The interim report identified four primary factors affecting profitability. First, as the guaranteed home delivery program entered its final phase, delivery volumes contracted sharply during the period, directly weighing on revenue scale. Second, the inherent lag in revenue recognition across the real estate sector meant that projects with previously high land costs were recognized in a concentrated manner amid a market environment of price reductions and inventory destocking, pressuring margins. Third, compounded by macroeconomic headwinds, industry conditions, and counterparty financial distress, the group recorded approximately 6.2 billion yuan (approximately $924.0 million) in inventory impairments and about 3.8 billion yuan (approximately $566.3 million) in impairment losses on financial assets and financial guarantees. Fourth, the company booked other income and gains of approximately 4.1 billion yuan (approximately $611.1 million), primarily driven by fair value changes in financial liabilities measured at fair value through profit or loss, as well as gains from the debt restructuring.

On the expense side, Country Garden maintained its strict cost-control discipline, with selling and administrative expenses falling to approximately 3.2 billion yuan (approximately $476.9 million) in the first half, a year-on-year decline of 19.7%.

On sales performance, Country Garden achieved cumulative attributable contracted sales of approximately 14.25 billion yuan (approximately $2.1 billion) in the first six months of 2026, with attributable sales area of about 1.825 million square meters. The company noted that its overall sales trajectory remained broadly in line with nationwide new-home sales trends as measured by China's National Bureau of Statistics, with operations holding steady and progressing according to plan.

Notably, according to CRIC data, Country Garden re-entered the top 10 among Chinese developers by construction area under management in the January-to-July 2026 ranking. This rebound reflects the group's operational resilience amid the dual pressures of guaranteed home delivery and sales stabilization.

Regional markets and credit repair

Driven by policy support and the release of pent-up demand, certain regional markets showed signs of structural bottoming and recovery. Guangdong, Jiangsu, and Henan provinces performed particularly well, serving as key pillars of Country Garden's first-half performance. Projects in cities including Shaoguan, Huizhou, Taiyuan, Suzhou, and Haikou gained market recognition on the strength of product quality.

On credit restoration, following the effectiveness of its offshore debt restructuring, Country Garden completed two consecutive scheduled payments in December 2025 and June 2026, covering the initial cash payment and first interest installment, with cumulative payments exceeding 2.8 billion yuan (approximately $417.3 million). These actions are aimed at repairing the company's offshore credit fundamentals and improving valuation expectations in overseas markets.

"One body, two wings" strategy advances

Country Garden's "one body, two wings" strategy continued to gain traction in the first half. As one "wing," Phoenix Zhituo Construction Management leveraged its full-industry-chain advantages to secure new full-process entrusted management projects, including the Badong Haituo Binjiang Mansion residential development in Hubei, a commercial land parcel in Xiaoxian County, Suzhou, Anhui, and the Guangzhou AI Cloud Valley industrial park. The platform also extended its reach into urban ancillary services renewal, taking on renovation projects for a well-known international school and high school campus in South China, completing comprehensive functional upgrades to campus facilities within a 40-day summer window. To date, Phoenix Zhituo Construction Management has cumulatively undertaken more than 200 construction management and agency projects.

The other "wing," Tengyue Construction Technology, continued to deepen its presence in intelligent construction, building an integrated system that deeply fuses construction robotics, new prefabricated construction methods, and BIM digitalization. To date, 28 building robot models have been deployed commercially, with cumulative deliveries exceeding 5,200 units and application coverage surpassing 40 million square meters.

Internal transformation and AI adoption

While the "two wings" businesses expand outward, Country Garden is simultaneously strengthening its internal foundation as a pivot for transformation. Under the leadership of Board Chairwoman Yang Huiyan, the group established two project management offices (PMOs) in the first half: a Product R&D and Design task force and an AI Efficiency Enhancement task force. After more than six months of intensive development, both initiatives have delivered quantifiable results.

The Product R&D and Design PMO has built a research ecosystem spanning six core areas: work mechanism establishment, material library refreshment, new project review, modular R&D, case library and product AI capabilities, and legacy project product revitalization. In the first half, it completed 10 specialized studies on spatial modules and launched pilot projects in Guangdong and Yunnan.

The AI Efficiency Enhancement PMO, building on Country Garden's long-term investment in digital capabilities, has constructed an AI Agent underlying technology architecture and foundational development platform with autonomous scalability. It has achieved initial deep integration with the enterprise's collaborative office ecosystem, incubating and deploying the first batch of high-value AI Agent applications across full-cycle core scenarios including design, engineering, operations, marketing, customer service, finance, legal, and human resources, delivering measurable cost reductions and efficiency gains.

Analysts noted that Country Garden has fought two critical battles over the past several years: first, the guaranteed home delivery campaign that delivered over 1.85 million units cumulatively over four years, and second, the debt restructuring that reduced total indebtedness by more than 90 billion yuan (approximately $13.4 billion). With the guaranteed delivery mandate gradually winding down and the debt restructuring successfully implemented, the group's most acute pressures have eased. Country Garden's transition from "risk resolution" to "operational recovery" may serve as a template for private developers navigating the industry consolidation cycle, bolstering market confidence and injecting momentum into the stabilization and recovery of China's real estate market under policy support.

LINK: https://finance.biggo.com/news/8a7241e1-ded5-40bd-8722-f5d605d7508d