Recently, Jinko Real Estate Group Co., Ltd. (“Jinko Shares”), which was once listed among China’s top 100 real estate companies, released its financial reports for the year 2024 and the first quarter of 2025. The reports revealed that the company is facing an unprecedented operational crisis, reflecting the deep-rooted challenges confronting the entire real estate industry in China.
According to the annual report data, Jinko Shares achieved an operating income of approximately 27.555 billion yuan in 2024, a sharp decrease of 56.43% compared to the previous year. The net profit attributable to shareholders of the listed company suffered a staggering loss of 31.969 billion yuan, plummeting by 266.11% year-on-year.
In the first quarter of 2025, the company’s operating income was only 753 million yuan, nearly a 90% decrease year-on-year. The net loss amounted to 1.617 billion yuan, further expanding by 39.27% compared to the same period last year.
In its annual report, Jinko Shares pointed out that the main reason for the losses is the significant decline in project sales, with a noticeable reduction in the number of projects meeting delivery conditions, leading to a significant decrease in revenue and gross profit. Additionally, the operational properties held by the company suffered from a decrease in rental rates and a downward adjustment in fair value, further dragging down the performance of the balance sheet.
More critically, impacted by a sluggish market and debt defaults, Jinko Shares made significant provisions for inventory impairment totaling 13 billion yuan. Financial expenses also sharply rose to 7.9 billion yuan due to the capitalization of interest expenses and debt defaults, reflecting dual pressures from tight cash flow and obstructed financing channels.
A subsidiary of Jinko Shares, Jinko Services, once a cornerstone of cash flow, also faced the misfortune of asset impairment. The company pledged the 163 million shares it held in Jinko Services for financing and underwent multiple rounds of discounted auctions, ultimately resulting in a provision of 1.3 billion yuan for asset impairment losses.
Of particular note is the acquisition of 1.078 billion shares of Jinko Services’ equity by private equity fund Boyu Capital for 667 million yuan, representing a loss of approximately 4.5 billion yuan from the initial pledged value. This transaction not only highlights Jinko Shares’ financial chain dilemma but also raises concerns about its equity disposition. Boyu Capital’s founder is Jiang Zhicheng, the grandson of the late Chinese Communist Party leader Jiang Zemin.
Industry insiders point out that the plight of Jinko Shares is not an isolated case but rather a reflection of the systemic risks in China’s real estate industry. In recent years, as regulatory policies continue to tighten, funding sources are restricted, and market confidence wanes, many real estate companies find themselves trapped in a vicious cycle of “high debt – declining sales – broken financial chain.”
In response to the crisis, Jinko Shares stated that 2025 will be a crucial year for risk alleviation and restructuring. The company plans to promote debt restructuring, attract strategic investments, and dispose of assets in order to restore a positive cycle.
However, against the backdrop of the retreat of the “high-leverage model” in China’s real estate sector, whether Jinko Shares can break free remains subject to further observations by the market and policies. The path to transformation for real estate companies is bound to be challenging and full of obstacles.