With a market capitalization of RMB 4 billion and annual rental income of RMB 3.6 billion, is Shui On Real Estate a 'steamed bun nobody wants' or a 'golden pit'?

Wang Ying did not kill the 'chicken' for quick cash. Even with a residential sales gap—residential revenue in 2025 stood at only RMB 499 million—the company still generated RMB 397 million in core profit solely from rental income. What was the cost? Yes, the numbers truly look ugly. Of course, any surgery comes with a price. Shui On’s 2025 revenue totaled just RMB 4.093 billion—down over 70% from RMB 15.565 billion in 2022. Contracted sales amounted to RMB 7.9 billion, halved from 2024. Even more jarring: the company posted its first loss in five years—RMB 1.782 billion in net attributable losses. Capital markets don’t negotiate—they punish losses outright. The share price plunged to an all-time low of HK$0.46. Yet industry insiders know this loss is almost entirely ‘on-paper’: RMB 920 million in inventory impairments and RMB 643 million in fair-value impairments on investment properties—neither representing actual cash outflows. What Wang Ying is doing, fundamentally, is trading scale for time—and accounting losses for balance-sheet safety. This logic may elude retail investors, but institutions understand it well. They simply refuse to wait. Cuihu Phase VI: A ‘Faith Top-Up’ In 2024, Cuihu Tiandi Phase VI launched. At RMB 210,000 per square meter, it set a new Shanghai record. The project sold out in one day—RMB 12 billion in total. Why does this matter? Because it validates Wang Ying’s judgment. At the peak of market panic in 2023, many developers slashed prices to boost volume. Internally, some at Shui On surely urged discounting Cuihu to accelerate cash flow. But Wang Ying held firm. She waited—and upheld the premium positioning. Had she discounted and dumped Cuihu in 2023, the brand’s value would have eroded. Shui On would have lost its final trump card. The RMB 12-billion cash inflow, coupled with the market confidence signaled by a single-day sell-out, delivered a powerful shot in the arm to the entire company. The Internal Purchase Controversy: A Fair Assessment In early 2026, Wang Ying’s family purchased a unit in Cuihu Phase V for RMB 30.5 million. Critics claimed the price was far below market value, raising concerns about related-party transactions. From a corporate governance perspective, this move indeed carries flaws—procedural opacity and reputational damage. Yet here’s what insiders genuinely think: First, Wang Ying’s total compensation in 2024 was merely RMB 1.16 million. For a CEO managing hundreds of billions in assets, that salary is absurdly low by industry standards. Without adequate incentives, why would she go all-in? This property purchase, essentially, functioned as deferred compensation. Second, the unit was sold at the officially filed price—not arbitrarily set—and represented the last remaining unit in Phase V, which was nearing full liquidation. Selling it avoided long-term holding costs from vacancy. Third—and most crucially—Wang Ying’s current light-asset strategy hinges on partnerships with insurers. Entities like China Life Insurance and CPIC manage trillions in assets and urgently seek CEOs capable of operating integrated complexes in prime locations. If Wang Ying were poached—or launched her own firm—Shui On’s light-asset transformation would instantly stall. Using one apartment to retain a core operator? Luo Kangrui calculated that equation very clearly. Of course, equity incentives or deferred bonuses would be preferable. But at that critical juncture, Shui On chose the most direct path. Negative public reaction was the tuition fee Shui On paid for corporate governance shortcomings.

Profitable year-on-year in the first half—Shui On Real Estate aims to relaunch ‘Xintiandi’ as a new listed entity.

FortuneToday (ID: FortuneToday-) Editor: Quan Zhuo Recently, Shui On Real Estate (HKEX: 00272) announced plans to spin off its commercial investment properties, property management, and asset management businesses into an independent listing. The spun-off entity will operate under the name ‘Shui On Xintiandi’ (SXTD). According to reports, Shui On Xintiandi has submitted an application for listing on the Main Board of the Hong Kong Stock Exchange. Morgan Stanley Asia Limited and UBS Securities Hong Kong Limited serve as joint sponsors for the global offering. Post-listing, Shui On Xintiandi will remain a subsidiary of Shui On Real Estate, while Shui On Real Estate will retain majority control as its controlling shareholder. This is not Shui On Xintiandi’s first attempt at listing. As early as 2009, Shui On Real Estate considered spinning off Xintiandi independently. On May 28, 2012, Shui On Real Estate announced that the Hong Kong Stock Exchange had confirmed approval of the proposed spin-off—but at the following year’s earnings briefing, Chairman Luo Kangrui announced the plan’s termination. At this year’s interim earnings conference, Luo Kangrui remarked: “We studied whether to list Xintiandi separately a decade ago, but market conditions and the maturity of our portfolio assets weren’t yet sufficient to meet listing requirements.” Now, with another listing application filed, renowned real estate analyst Yan Yuejin told FortuneToday that Shui On Xintiandi—Shui On Real Estate’s flagship and core product—holds significant market influence. An independent listing would deliver substantial strategic value for both Xintiandi’s growth and Shui On Real Estate’s broader development. Three Years of Declining Revenue—Seeking Listing to Bolster Capital Available data shows that Shui On Xintiandi is a wholly owned, independently operated subsidiary of Shui On Real Estate, responsible for operating and managing Shui On’s commercial properties, while Shui On Real Estate focuses on property development. In 2012, Shui On Real Estate announced plans to list Shui On Xintiandi separately on the Hong Kong Stock Exchange; in 2013, Shui On Xintiandi began independent operations, with office and commercial assets transferred into its portfolio; in early 2014, Shui On Real Estate brought in Canadian investor Brookfield, injecting USD 750 million into Shui On Xintiandi; in 2015, Shui On Real Estate again indicated it would accelerate Shui On Xintiandi’s listing process. Yet despite years of preparation, the listing never materialized. At its 2015 annual earnings briefing, Shui On Real Estate stated: “Listing Shui On Xintiandi at this stage would not best reflect its underlying asset value, and we have decided not to pursue listing in the near term.” So why revive the spin-off plan after so many years? Industry insiders suggest the decision likely stems from Shui On Xintiandi’s own operational challenges. Reviewing performance over the past three years reveals continuous revenue declines: RMB 24.841 billion in 2018, RMB 10.392 billion in 2019, and RMB 4.597 billion in 2020. In 2020 alone, the company recorded RMB 4.597 billion in revenue—a 56% year-on-year drop—and reported a net loss of RMB 740 million, compared to net profit of RMB 1.932 billion in 2019.

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