Gemdale

Gemdale Corporation is a Chinese real estate developer. It was originally a state-owned enterprise of Futian District, Shenzhen, and was later restructured into a mixed-ownership enterprise. As of the end of September 2023, the company’s largest shareholder was Funde Sino Life Insurance Co., Ltd., holding 29.83%; its second-largest shareholder was Shenzhen Futian Investment Holding Co., Ltd., holding 7.79%, the latter being wholly owned by the State-owned Assets Supervision and Administration Commission of Futian District, Shenzhen. Gemdale has long had no actual controller, with day-to-day management run by a team of professional managers; Ling Ke long served as chairman and was the company’s central figure. On October 16, 2023, Gemdale announced that Ling Ke had resigned as chairman for health reasons, with president Huang Juncan performing his duties in an acting capacity. According to Caixin, the official reason for Ling Ke’s resignation was that he had reached the age of 64 and was in poor health; market rumours held that one of the underlying reasons was that his cautious and conservative style had caused Gemdale to grow too slowly, which displeased its major shareholder Funde Sino Life Insurance; Ling Ke had also lived mostly in Hong Kong, China in recent years, which may have made managing the company inconvenient.

In terms of sales scale, Gemdale’s sales over the past five years (roughly 2018 to 2022) ranged between 160 billion and 280 billion yuan, and its industry ranking at one point fell outside the top ten, only returning to eighth place in 2022. In 2022, Gemdale’s sales were 221.8 billion yuan, a year-on-year decline of more than 20%. According to reports, Vanke’s sales in 2011 were 121.54 billion yuan, 3.9 times Gemdale’s sales over the same period.

On February 10, 2010, Gemdale chairman Ling Ke said at the press conference for its 2009 annual results that Gemdale would enter commercial real estate that year, with an initial investment of around 2 billion yuan. According to a May 2010 report by Caixin Online, against the backdrop of frequently introduced property control policies, residential developers such as Vanke, Gemdale and Poly were one after another seeking a transition to commercial real estate, and industry insiders believed the transformation they faced would be anything but smooth.

In November 2022, the central bank and the former China Banking and Insurance Regulatory Commission jointly convened a national symposium on commercial bank lending, requiring banks to keep real estate financing stable and orderly. That month, several large banks announced strategic partnerships with a number of property developers, with credit lines ranging from tens of billions to over 100 billion yuan; Vanke and Gemdale were the “honoured guests” favoured by most banks at the time and obtained substantial intended credit lines. However, according to several bankers, such partnerships were only pre-approved credit; the amounts actually disbursed after each bank’s internal approval were roughly 80% to 90% of the publicly announced figures, and developers mainly used them to refinance existing debt rather than as new loans.

In the second half of 2023, credit risk in the property market spread rapidly, and Gemdale was also hit. From July to August, the prices of several of Gemdale’s onshore bonds went through multiple rounds of declines; after Ling Ke resigned in October, market confidence suffered a further blow, and by mid-November the prices of several long-duration onshore bonds had fallen to between 20 and 40 yuan, while the market price of its sole outstanding US dollar bond fell below 30% of face value. According to Caixin’s tally, after issuing a 1.7 billion yuan medium-term note on 24 February 2022, Gemdale did not issue any further public bonds onshore; as of November 2023, there had been no progress on Futian Investment guaranteeing a bond issue for Gemdale. According to a person close to Gemdale, as a state-owned enterprise Futian Investment had rather rigid procedures and rules, and the application process for a guaranteed bond issue was lengthy. To protect its credit, Gemdale acted urgently: on 16 September it announced that its state-owned shareholder Futian Investment would study credit enhancement measures such as guaranteeing the company’s issuance of corporate bonds or medium-term notes in the public market, for which Gemdale might provide corresponding counter-guarantee collateral; in October it repaid on time two private placement bonds due that month, totalling about 975 million yuan; on 3 November it announced a repayment arrangement stating that public debt of about 2.142 billion yuan due in November would be repaid on schedule, and the funds were transferred into a supervised account on time on 10 November. According to Caixin, to raise this more than 2 billion yuan in repayment funds, Gemdale suspended all supplier payments above 10,000 yuan and could only settle with construction companies and other suppliers using physical assets such as housing units in lieu of payment. Caixin had earlier learned that, by Gemdale’s internal estimate, its rigid monthly outlays in 2023 included about 5 billion yuan in construction payments, 1 to 2 billion yuan in sales taxes and fees, and 2 billion yuan in maturing debt, so monthly sales of about 13 billion yuan were regarded as its red line for funding pressure. From June 2023, however, Gemdale’s monthly sales fell sharply, and by October they had declined by more than 40% year on year for five consecutive months; sales in July and August were each below 13 billion yuan, recovered briefly to 13.1 billion yuan in September, and then fell again by 45.84% year on year in October to only 11.0 billion yuan. In the first ten months of 2023, Gemdale’s cumulative contracted sales were 132.93 billion yuan, down 27.51% year on year, far more than the 12.8% average decline of the top 100 developers over the same period. Several people at Gemdale estimated that the company’s 2023 sales would fall by more than 20% year on year, to under 200 billion yuan for the full year. According to Caixin, since the second half of 2023 Gemdale had abandoned its approach of “protecting profits”, instead stepping up promotions and accelerating sell-through to recover cash, trying to revitalise about 70 billion yuan of slow-moving assets such as parking spaces, ground-floor shops and remaining units, while starting to sell, at a discount, equity stakes and assets in some high-quality projects in first-tier cities. Its financial statements showed that at the end of June 2023, Gemdale’s short-term borrowings and non-current liabilities due within one year totalled 41.452 billion yuan; from January to April 2024 it had 10.592 billion yuan of public debt to repay, with 6.1 billion yuan maturing in March alone.

In 2025, Gemdale recorded operating revenue of about 35.858 billion yuan, down 52.41% year on year; in terms of losses, net profit attributable to shareholders of the parent was -13.281 billion yuan, with the loss widening by 117.19% year on year, and net profit attributable to shareholders of the parent excluding non-recurring items was -12.307 billion yuan, with the loss widening by 180.53% year on year. The annual report attributed the decline to the following: shrinking sales in recent years meant the area available for revenue recognition that year was smaller than the previous year, so operating revenue fell; the company made provisions for inventory write-downs and credit losses on a prudent basis; and the settled gross margin of the property business also fell by 6.18 percentage points to 7.93%. In the same year, gains from changes in fair value were -1.188 billion yuan (-813 million yuan in the previous year), credit impairment losses were -5.945 billion yuan (-2.376 billion yuan in the previous year), and asset impairment losses were -3.105 billion yuan (-3.899 billion yuan in the previous year); together these three items consumed 10.238 billion yuan of profit. Property development remained its main source of revenue, generating 23.89 billion yuan in 2025, about 66.6% of total revenue; contracted sales were 30.02 billion yuan, down 56.18% year on year. At the end of 2025, the company’s total land bank was about 24.72 million square metres (29.16 million square metres in 2024), its attributable land bank was about 10.59 million square metres (12.45 million square metres in 2024), and first- and second-tier cities accounted for about 79% (77% in 2024). In 2025 the company’s net operating cash flow fell sharply to 16 million yuan, close to zero, whereas in 2024, at the peak of debt repayment, it had achieved a net operating cash inflow of 13.62 billion yuan.

In the first quarter of 2026, Gemdale’s revenue was 7.882 billion yuan, up 32.11% from the same period a year earlier; net profit attributable to shareholders of the parent was -680 million yuan, with the loss widening by 3.32% year on year. During the quarter the company started construction on about 46,000 square metres and completed about 290,000 square metres, with contracted area of about 232,000 square metres and contracted sales of about 3.30 billion yuan. At the end of the first quarter, the company’s other receivables were about 69.516 billion yuan, as much as 30.76% of total assets, consisting mainly of current-account funds advanced to joint ventures and associates for project development; its non-current liabilities due within one year were about 34.082 billion yuan, while it held only 10.611 billion yuan in cash. After repaying two public bonds, “21 Gemdale 03” and “21 Gemdale 04”, the company no longer had any outstanding public debt.

On 27 May 2026, Gemdale held an online results briefing for fiscal 2025 and the first quarter of 2026, attended by chairman Xu Jiajun, president and chief financial officer Li Ronghui and other members of management. Xu Jiajun said that, as the first year of the 15th Five-Year Plan, 2026 found the industry, after a period of adjustment, at a critical stage of shifting from old to new growth drivers; the company would continue to put cash flow at the core of its operations, focus on its main business, make every effort to revitalise existing assets, and step up investment in segments such as project management (construction on behalf of others), operation of held properties and property services, advancing the diversification of its non-residential businesses. He set out four key points: holding the bottom line of financial security; seizing market opportunities by improving product quality, optimising new investment and revitalising existing assets; pursuing asset-light and asset-heavy businesses together, with coordinated development in project management, held properties and property services; and continuing to deepen management controls around cost reduction and efficiency. On inventory impairment, he said the company would continue to monitor the impairment risk of the relevant assets in accordance with accounting standards. Li Ronghui said that, for debt maturing in 2026, the company had drawn up measures including accelerating sales, broadening financing channels and disposing of bulk assets, and stated that the company had always treated financial security as its operating bottom line.

On land reserves, Xu Jiajun said that since 2025 the company had acquired high-quality residential land in cities including Hangzhou, Shanghai, Zhanjiang, Dalian and Qingdao through public tenders, auctions and listings, commercial-to-residential conversions and land swaps, and would replenish its land bank prudently and opportunistically in light of market conditions and its cash flow. From January to May 2026, the company added three projects, in Dalian (in partnership with Poly, with a 40% stake), Qingdao (won jointly with Vanke, China Overseas, Yuexiu and Qingdao City Investment, with a 22.5% stake) and Xi’an, whereas it had added only two land parcels in the whole of 2025. Xu Jiajun also disclosed that the company had set up a special working group to coordinate the revitalisation of existing assets and had successfully completed the government buy-back of the Anqing City Starlight and Hangzhou Jiubao projects. The Wuhan Gemdale Dacheng Lefu project, first launched in June 2025, sold out 234 units in two hours, with single-day contracted sales exceeding 470 million yuan; the project’s land had been won by Gemdale Commercial Properties in December 2024 for 354 million yuan.

According to an article published by Qin Shuo in May 2026, the founder of a property services company recalled that sometime between 2020 and 2021, Yu Liang and other property executives discussed at a gathering how large the market would need to remain, in a worst-case scenario for the industry, for companies to survive; the answer reached by Vanke’s and Gemdale’s research was 13 trillion yuan. The article also noted that China’s sales of commercial housing were 18.19 trillion yuan in 2021 and fell to 8.39 trillion yuan by 2025, a drop of more than 55%.