Yuyuan Group reports first loss in 33 years since listing: real estate-related company releases impairment risk with a "lighter load"

How Can Impairment Write-Offs Help Companies Focus on Core Business Transformation?

As the annual report disclosure for A-shares enters a peak period, the asset impairment risks for real estate and related diversified enterprises are continuously exposed. On March 24, Yuyuan Inc. (600655.SH) disclosed its 2025 annual report, revealing that massive asset impairments led to the company’s first-ever net profit loss attributable to shareholders in its 33 years since going public.

Not long ago, China Merchants Shekou (001979.SZ) also announced an asset impairment provision exceeding 4.2 billion yuan; China Metallurgical Group (601618.SH) forecasted that the impairment provisions for inventory, fixed assets, investment properties, and other various assets would exceed 26 billion yuan; Poly Developments (600048.SH) recognized asset impairment losses and credit impairment losses totaling approximately 6.9 billion yuan; Vanke A (000002.SZ) expects a net profit loss attributable to shareholders of about 82 billion yuan in 2025, marking the largest single-year loss in the history of A-share companies, with the core reason being the recognition of inventory impairments between 45 billion to 55 billion yuan.

In the context of the real estate industry’s adjustment, these impairment cases are not isolated; more listed companies involved in real estate assets continue to face impairment pressures, and the market needs to be wary of related risk transmissions.

According to a report by First Financial, based on WIND data, over 90 real estate companies and related enterprises in the A-share market had a combined book value of inventory and investment properties of 5.18 trillion yuan at the end of 2023, which decreased to 3.98 trillion yuan by the end of the third quarter of 2025, a decline of 23%. Aside from reasons related to sales and inventory clearance, asset impairment is also a significant factor.

Recognizing Asset Impairments of 1.889 Billion Yuan, Yuyuan Inc. Reports First Loss in 33 Years

Yuyuan Inc.'s 2025 annual report shows that the company achieved a net profit attributable to shareholders of -4.897 billion yuan for the year, marking its first annual loss since its listing in 1992. The core reason is the total recognition of various asset impairment provisions amounting to 1.889 billion yuan for the period. Among these, real estate-related asset impairments accounted for over 60%, becoming the main factor dragging down performance.

From an industry perspective, Yuyuan Inc.'s massive impairment is the result of a resonance between the industry environment and the company’s strategic adjustments. On one hand, the domestic real estate industry remained sluggish in 2025, with national commercial housing sales area declining by 8.7% year-on-year and sales amount declining by 12.6% year-on-year, creating de-stocking pressure. Yuyuan Inc.'s real estate sales amount and sales area both dropped by nearly 50%, forcing many projects to “exchange price for volume,” triggering asset impairment tests.

On the other hand, the company is proactively pursuing a strategic contraction, shifting from its past “real estate + consumer” dual business model to focus on its core business in gold and jewelry, with the real estate sector retreating from being a core growth driver to a non-core segment. The company chose to recognize inventory write-down provisions for projects involving multiple cities during the industry adjustment period, thereby clearing real estate risk burdens in one go.

The large impairment in 2025, combined with a decline in the core business, directly pushed the net profit attributable to shareholders into loss territory, resulting in the company’s first loss since its listing.

As of the end of 2025, the company’s jewelry fashion business accounted for over 60% of revenue, indicating gradual transformation effects, but short-term performance still suffers from impairment drag.

Annual Report Season Risk Warning: More Impairments Ahead

In addition to companies like Yuyuan Inc. involved in real estate, leading real estate firms also face significant asset impairment pressures.

On March 17, China Merchants Shekou announced that it would recognize total asset impairment provisions of 4.27 billion yuan for 2025, including inventory write-down provisions of 3.269 billion yuan. This impairment directly reduced the company’s net profit attributable to shareholders by 2.918 billion yuan for 2025.

Earlier, Vanke A estimated a net profit loss attributable to shareholders of about 82 billion yuan in 2025, setting a record for the largest single-year loss in the history of A-share listed companies, primarily due to inventory impairments of 45 billion to 55 billion yuan, compounded by fair value losses on investment properties and expanded losses from joint projects.

Mika Long (601828.SH) expects a loss of 18 billion to 22.5 billion yuan in 2025, mainly due to fair value losses on investment properties of 12.6 billion to 21.5 billion yuan, and various asset impairment provisions of 4.5 billion to 5.7 billion yuan, significantly impacted by the sluggish real estate industry and declining demand in home retail. This marks Mika Long’s third consecutive year of losses, with the loss amount expanding each year, erasing all accumulated profits since its listing in 2018.

Greenland Holdings (600606.SH) anticipates a loss of 16 billion to 19 billion yuan, resulting from multiple factors including impairment provisions for risky inventories, revenue declines in real estate and infrastructure businesses, and increased financial costs.

OCT A (000069.SZ) expects a loss of 13 billion to 15.5 billion yuan, involving impairments in both cultural tourism and real estate sectors, with theme parks, commercial complexes, and residential projects all facing valuation downward pressure.

Jianfa Holdings (600153.SH), as a diversified enterprise, expects its real estate segment to incur a loss of 5.2 billion to 10 billion yuan in 2025, marking the first annual loss in its 28 years since going public, primarily due to inventory impairments and losses from Mika Long (in which Jianfa Holdings holds a 29.95% stake)—not only resulting in unrealized losses from falling stock prices but also necessitating the assumption of operating losses from Red Star McAllan.

China Metallurgical Group forecasts profitability in its annual report, but its real estate business is expected to incur losses, while also announcing plans to recognize asset impairment provisions for inventory, fixed assets, investment properties, and other various assets, expected to exceed 26 billion yuan.

Poly Developments recognized asset impairment losses and credit impairment losses totaling approximately 6.9 billion yuan, reducing the net profit attributable to shareholders by about 4.2 billion yuan for 2025.

These Companies Face Significant Impairment Pressures

Industry insiders suggest that, given the current deep adjustment in the real estate industry, the following types of companies may face real estate impairment risks:

The first type: Traditional diversified groups, including consumer, manufacturing, and comprehensive groups involved in real estate, where the real estate sector was once an important source of profits or growth;

The second type includes enterprises undergoing asset restructuring amid state-owned enterprise reforms, where state-controlled listed companies are accelerating mergers and acquisitions. According to statistics from First Financial, there have been multiple merger events involving state-controlled listed companies in the A-share market this year. The focus on “core business” has become a core direction, with some companies clearing real estate risks through impairment write-offs, while others achieve sector switching through mergers and acquisitions, all serving the reform direction of state-owned enterprises focusing on “streamlining and focusing on core competencies”; the third type: Companies transitioning from real estate to other core businesses also need to recognize substantial impairments to “lighten their load.”

The reporter collected the changes in the total book value of inventory and investment properties for 99 real estate companies and related real estate enterprises in the A-share market, directly reflecting the shrinking asset size in the industry.

Data shows that at the end of 2023, the combined book value of inventory and investment properties for these companies was 5.18 trillion yuan, which had dropped to 3.98 trillion yuan by the end of the third quarter of 2025, a decrease of 23%. This change is partly due to project de-stocking amid the ongoing sluggishness of the real estate industry and closely tied to the companies’ large-scale recognition of asset impairments. As all 2025 annual reports are disclosed, this figure is expected to decline further.

(This article is from First Financial)