On November 14, the mainland China’s leading trust institution, CITIC Trust, publicly listed a non-performing loan of 1.408 billion yuan (RMB) from Baoneng Urban Development Construction Group Co., Ltd. (Baoneng City) for auction. The collateral for this debt is 160 housing properties in the third phase of Baoneng City Garden (East Zone) on the north side of Liuxian Avenue, Nanshan District, Shenzhen.
According to reports from various Chinese media outlets on November 14, CITIC Trust put up Baoneng City’s 1.408 billion yuan non-performing loan for auction. As of the end of July 2025, the principal of this debt was 1 billion yuan, totaling 1.408 billion yuan including interest and other costs. The collateral for this debt consists of 160 housing properties in the third phase of Baoneng City Garden in the Nanshan District of Shenzhen. Meanwhile, the transferor has filed a lawsuit with the Shenzhen Intermediate People’s Court to confirm the priority of repayment from the auction proceeds of the collateral and to reclaim the joint and several liability of Baoneng Real Estate and Baoneng Holdings.
The auctioned Baoneng City Garden properties were once considered one of the core assets of the Baoneng Group.
Public records show that Baoneng Urban Development Construction Group Co., Ltd. is a subsidiary of the Baoneng Group. The Baoneng Group is a capital group centered around Baoneng Investment Group Co., Ltd. in Shenzhen, founded in 2000 and wholly owned by the founder and chairman of Baoneng Group, Yao Zhenhua. The business scope of the Baoneng Group covers real estate, finance, logistics, healthcare, agriculture, and other fields.
According to Tianyancha, by November 2025, the overall amount of executions against Baoneng Investment Group has exceeded 50 billion yuan. In just the first two months of this year, Yao Zhenhua faced enforcement actions from multiple courts, with an additional enforcement amount totaling over 4.7 billion yuan, indicating a continued escalation of debt pressure.
One of the most notable actions of the Baoneng Group was its stake acquisition in Vanke in 2015, causing a stir in the capital markets. However, subsequent extensive expansion by the Baoneng Group led to soaring debt levels. With the real estate industry downturn and tightening financing environment, liquidity crisis within the Baoneng Group has gradually emerged, making asset sales the main means to alleviate debt pressure. However, the scale of asset sales seems insufficient compared to the massive debts currently held by the group.
An analysis quoted by the Daily Economic News on November 16 from Yuan Shuai, Deputy Director of the Investment Department at the China Urban Development Research Institute, stated that the outcome of disposing of the 1.408 billion yuan debt by the Baoneng Group will have significant implications for its subsequent debt restructuring process. If the debt can be successfully transferred, it may serve as reference for other creditors in their own disposition; otherwise, if the disposal faces obstacles, it could exacerbate market concerns about Baoneng Group’s debt repayment ability.
Gao Chengyuan, Chairman and CEO of Tiaoyuan Consultancy, mentioned that once the trust side completes the auction, it is equivalent to setting a “price anchor” for the entire asset pool of Baoneng: first, it serves as a benchmark for debt restructuring negotiations at other financial institutions, locking in the overall debt reduction space; second, it sets a demonstration factor—if CITIC Trust achieves high returns through a “bid + reserve price” mechanism, other large creditors in line will refuse the “debt-to-equity” style long-term plan, demanding a replication of the cash recovery path, compelling Baoneng to transition from “time for space” to “assets for cash.”