Greentown China’s profits plummet: partners loudly complain "we got badly cheated"

Questioning AI · What Are the Hidden Details Behind Greentown’s Sharp Profit Decline and Its Cooperative Projects?

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Text / Real Estate Financial Vision

On March 31, Greentown China released its full-year 2025 performance report, presenting a double decline in revenue and profit:

In 2025, Greentown China achieved approximately 8B yuan in revenue, a 2.26% decrease year-on-year; attributable profit to shareholders was about 70.989 million yuan, a 95.55% decrease year-on-year.

Just the day before, Greentown China suddenly announced a leadership change: “Greentown veteran” Guo Jiafeng resigned due to retirement from roles including Executive Director, Member of the Environmental, Social, and Governance Committee, CEO, and other group positions, with Geng Zhongqiang, who has over 30 years of “China Communications Construction” experience, stepping in as acting CEO.

At the earnings conference, someone asked on-site: In 2025, the company’s net profit was 2.3 billion yuan, but the net profit attributable to the parent was only 70 million yuan. Why is there such a large gap?

Geng Zhongqiang, newly appointed, responded: The company does not have a situation where most profits are given to a few shareholders or other partners.

He explained that there are three main reasons: First, in 2025, some high-profit projects were delivered and transferred as cooperative projects, with the company’s equity share being low, resulting in a small proportion of net profit relative to scale; second, regarding joint ventures, Greentown bore a loss of 1.1 billion yuan in 2025, and according to accounting standards, the loss of the joint venture is only reflected as Greentown’s share, not the partner’s loss, so the impact on net profit and scale net profit is consistent; third, management expenses at the group and regional platform levels are fully borne by Greentown alone, with equal impact amounts.

This answer seems to be an attempt to remotely respond to some doubts from partner units.

1

Former Partners Turn Against Each Other, Greentown Brand Becomes Hidden Disease

One of them is Tianhong Real Estate Development Co., Ltd. (hereinafter Tianhong Real Estate), headquartered in Tangshan, Hebei.

On March 31, the same day Greentown China released its financial report, Tianhong Real Estate Chairman Wei Guqiu publicly accused Greentown in front of the media, making multiple allegations: accusing Greentown of deliberately avoiding its listed company entity, arranging Tianhong Real Estate to sign with Shenyang Quanyun Village Construction Co., Ltd. (hereinafter Shenyang Quanyun)—a company with no equity relation—to deceive Tianhong into surrendering project company decision-making rights, and then through related parties to embezzle project revenues.

The cooperation between Tianhong Real Estate and Greentown China dates back to 2019.

In December 2019, Greentown China reached a cooperation intention with Tianhong Real Estate for the Tangshan Greentown Guiyu Jiangnan project (now “Tianhong·Jiadi Guanlan,” also called Phoenix New City Phase II / Phoenix Lake Phase III), adopting a “financing + agency construction” model to jointly develop the land acquired by Tianhong Real Estate in Tangshan, Hebei, with Tangshan Hongke Real Estate Development Co., Ltd. (hereinafter Hongke Company) as the project development entity.

At that time, Greentown’s internal decision was to provide no more than 600 million yuan in financing, with a comprehensive return of no less than 16%. The cooperation requirements included: Greentown Management Group managing the agency construction, dispatching directors and financial personnel, and jointly managing project accounts and permits.

Subsequently, 28 agreement documents were signed, officially establishing the cooperation.

Financing and agency construction were contracted separately: the financing was between Shenyang Quanyun and Hongke; the agency construction was contracted by Greentown Management, Tianhong Real Estate, Hongke, and Hebei Derong Real Estate Development Co., Ltd., to undertake the project construction on the Tangshan land.

Tianhong Real Estate fully accepted the cooperation conditions and handed over control of the entire project.

Construction began in 2020, and the project was launched and listed the same year, originally scheduled for delivery by the end of 2023.

According to the operational plan, Greentown promised a sales cycle of 2 years, with residential sales clearance rate reaching 90% by the end of 2021.

However, under Greentown’s full control and management of the agency construction, Wei Guqiu stated that project sales were severely delayed and lagged significantly behind similar projects nearby—by December 31, 2021, only 94 million yuan in sales had been achieved, less than 5% of the promised 2.18 billion yuan sales target. Greentown was suspected of serious management misconduct.

In contrast, during the cooperation period, Tianhong fully complied with the agreement, handed over control, and had already repaid 400 million yuan in loans to Greentown (and related channels). The performance of both sides presents a stark contrast.

Subsequently, Tianhong issued a letter demanding Greentown’s management to withdraw, and from January 2022, Hongke took full control. The conflict then erupted:

In February 2022, Tianhong filed a lawsuit against Greentown in Hebei, claiming that their relationship was not merely agency construction or loan, but a “financing + agency construction + company control” cooperative development.

In April 2022, the borrower—Shenyang Quanyun—sued Tianhong and Hongke in Liaoning, demanding that they jointly bear the remaining principal plus interest of 390 million yuan, and applying for litigation preservation measures (sealing assets).

Shenyang Quanyun also became a key related company in this dispute, which will be analyzed further below.

As a result, assets including land and pre-sold properties worth 2 billion yuan were frozen, Hongke could not sell properties, and construction at the site was completely halted.

Today, although the project has been included in the national “guaranteed delivery” list, over 100 homebuyers who should have moved in by the end of 2023 are still waiting. The average price has fallen by nearly half from about 20k yuan per square meter at the opening in 2020.

This high-end project, once promoted under the “Greentown” brand, has become a source of pain for these buyers.

Wei Guqiu also mentioned that, according to incomplete statistics, supplier debts owed during Greentown’s management exceed 100 million yuan.

For Tianhong, based on the agreement at the time, the value of unsold properties was nearly 2.1 billion yuan. At current market prices, the remaining value is about 1 billion yuan, meaning a direct economic loss of over 1 billion yuan.

Missing the best sales window has caused irreversible heavy losses for buyers, owners, and suppliers alike.

2

Controversies Over Off-Balance Sheet Operations

Wei Guqiu believes that Greentown bears undeniable responsibility for this.

A key point is that Greentown launched “Shenyang Quanyun.” Wei Guqiu claims this is a shell company used to sign contracts with Tianhong, with “equity sharing but debt-like” characteristics.

He presented a meeting summary from December 2019, showing that Greentown China’s comprehensive industry investment decision-making committee held its 5th meeting of 2019, reviewing the financial department’s financing plan for the Tangshan Phoenix Lake Phase III project.

It mentioned that Greentown planned to set up a new project company with equity participation, providing financing in the form of shareholder loans of up to 600 million yuan (not exceeding 65% of the funding peak), mainly for land payments, with a term not exceeding 2 years, and early repayment possible after 6 months (repayment of 50 million yuan before the end of February 2020). The expected annual return was no less than 16%.
Both Zhou Lianying, then CEO and head of the comprehensive industry investment committee, and Geng Zhongqiang, executive deputy director, participated in this meeting.

Another internal approval document from Greentown shows that Greentown China used 500k yuan to acquire a 10% stake in Hongke (the project company), and provided a loan of no more than 599.5 million yuan to the project company for land payments, totaling no more than 600 million yuan.

The approval also indicated that “the project will be led by Shenyang Quanyun as the investment entity; to avoid affecting the group’s financial disclosures, the part of the project’s funding (70.99M yuan) will be interest-free loans from the group to Shenyang Quanyun via the materials company, which will then lend interest-free to Shenyang Quanyun.”

Hongke is the developer of this project. Currently, Tianyancha shows that Hongke is jointly held by Tianhong Real Estate and Shenyang Quanyun, with shareholding ratios of 90% and 10%.

However, from the equity structure, Shenyang Quanyun appears to have no direct relation to Greentown.

“We later found out it was a ‘fake Greentown.’ The company’s historical shareholders included some Greentown executives, and since Greentown is a well-known national real estate enterprise and listed company, we didn’t suspect much at the time and trusted our partner, surrendering decision-making rights of the project company and bearing agency construction costs and financing expenses,” Wei Guqiu said.

Moreover, he recalled that the entire approval process was conducted within Greentown’s internal OA system, with Greentown personnel giving final approval, creating an illusion of direct cooperation with Greentown’s main entity.

Tianyancha shows that Shenyang Quanyun is wholly owned by Guangwei Group Co., Ltd. Wei Guqiu provided a shareholder transparency list indicating that Geng Zhongqiang once served as a director of Guangwei Group.

At the same time, Greentown founder Song Weiping also served as a shareholder of Shenyang Quanyun from 2021 to 2025.

What confuses Wei Guqiu is that, in subsequent communications with Greentown, the relationship between Shenyang Quanyun and Greentown kept changing, becoming increasingly vague.

He pointed out that in the April 2022 lawsuit in Liaoning, Shenyang Quanyun explicitly admitted in court that it was “discretionarily designated by Greentown as a lender”; but in the Hebei High Court lawsuit, Greentown China has consistently denied any relationship with Shenyang Quanyun.

Tianhong Real Estate has repeatedly asked Greentown about the connection between Shenyang Quanyun and Greentown, but Greentown has repeatedly refused to comment.

“To cover up the fact that Shenyang Quanyun has no actual operational team, Greentown assigned personnel lacking real estate development experience to impersonate professional managers as project company executives, controlling project operations,” Wei Guqiu believes this directly caused the project to deviate from its original development path.

Another suspicion Wei Guqiu has is that all financial transactions between Greentown and Shenyang Quanyun should be disclosed in annual reports: “High-yield business at 16% annual interest—why operate off-balance sheet?”

In his view, this already violates the disclosure rules for listed companies. He revealed that Tianhong has sent risk warning letters and evidence to Ernst & Young, and has filed comprehensive reports with the Hong Kong Stock Exchange, Hong Kong Securities and Futures Commission, and Hong Kong Financial Secretary, which are now recorded by regulators.

3

After 16 Years, Greentown Returns to Industry’s No. 2 Position, but Agency Construction Risks Remain

Small and medium developers like Tianhong are just some of Greentown’s many partners in recent years.

Turning the business opportunities of a listed company into external related companies, using interest-free loans to drain the company, while exporting Greentown’s brand with a light-asset model, seems to be quite a profitable “business model.”

Even amid the current deep adjustment in the real estate sector, Greentown’s performance is not negligible.

Financial reports show that in 2025, Greentown China’s contracted sales reached about 251.9 billion yuan, a decrease from 2024, but in terms of industry ranking, Greentown China has leapt to second place nationwide, only behind Poly.

It’s worth noting that out of this 251.9 billion yuan in sales, only 153.4 billion yuan came from self-invested projects, with about 40%—that is, 98.5 billion yuan—coming from agency construction.

The agency construction model was first proposed by founder Song Weiping in 2008.

Even non-industry insiders are familiar with Song Weiping. As the former soul leader of this Hangzhou-based real estate company, he was once called the “Father of Chinese Luxury Homes.”

During Song Weiping’s era, Greentown was known for its high-end productism, focusing on “Osmanthus series,” “Rose Garden,” “Peach Blossom Spring,” and other luxury projects.

His idealistic spirit also left a “quality” imprint in many people’s minds.

In 2009, Greentown reached its peak, with land acquisitions totaling 32.3 billion yuan, becoming the nationwide leader in land purchases. Its annual sales hit 53 billion yuan, ranking second nationwide, only behind Vanke.

Subsequently, Greentown gradually fell into liquidity crisis. In 2015, China Communications Construction took control; in 2019, Song Weiping fully exited Greentown, which then fell out of the top 20 in sales rankings.

Greentown then began strategic adjustments. Unlike the meticulous, slow craftsmanship of “Song’s doctrine,” post-Song era Greentown shifted toward a faster turnover, short and quick development rhythm, creating an unprecedented “Greentown speed”:

In just six years, from 2015’s 71.9 billion yuan to a peak of 350.9 billion yuan in 2021, ranking seventh in the industry. Going from a trillion to two trillion in three years; from two trillion to three trillion in two years.

Now, Greentown has firmly entered the top three, returning to the second position after 16 years.

Agency construction has played a significant role in this.

Latest financials from Greentown Management show that in 2025, the company achieved an operating net cash flow of 415.2 million yuan, up 42% year-on-year.

The company’s market share has exceeded 20% for ten consecutive years, maintaining the industry’s first place. Meanwhile, data from China Index Academy shows that only 16% of projects in the industry have agency fees exceeding 3%, but over 50% of Greentown Management’s projects have fees above 3%.

Greentown has undoubtedly become the “number one in agency construction.”

However, large-scale development of the agency construction model, while potentially a “second growth curve” for light-asset transformation, also harbors hidden risks and drawbacks.

For example, for the brand side, cooperation often leads to disagreements over development concepts, and if quality issues arise, consumers will directly blame the agency brand, damaging long-term reputation; coupled with opaque financial operations like “equity sharing but debt-like” and small-share control, it can erode the company’s own interests.

For homebuyers, who mainly buy based on brand, they may end up with “OEM houses” that don’t match expectations or even face delivery issues.

For small and medium developers as partners, similar to Tianhong, project progress may be hindered by multiple factors, making it impossible to recover costs on time and incurring high interest costs.

Wei Guqiu revealed that the cooperation between Greentown and Tianhong is just the tip of the iceberg. By extending loans and transferring high-yield business to non-listed companies within the system, Greentown has many similar “套路” projects nationwide.

For example, projects like Greentown Liuxiang Garden in Yantai, Shandong, Greentown Hailong Xiyu Mansion in Lanzhou, Gansu, and Greentown Jinyu Garden in Xining, Qinghai all show traces of Shenyang Quanyun.

4

Is Greentown Still the Same “Greentown”?

In fact, off-balance sheet liabilities have long been considered an important “financial trick” for companies. Regulatory authorities have explicitly required penetrating supervision of real estate financing, cracking down on “equity sharing but debt-like” arrangements.

“Equity sharing but debt-like” financing usually involves equity investment combined with fixed returns and effective long-term principal exit.

As hidden debt, “equity sharing but debt-like” can easily mislead investors and financial institutions into overestimating repayment ability, increasing financial risks for developers. Especially during industry downturns, concentrated off-balance sheet debt repayment can compound with on-balance sheet debt, triggering liquidity crises.

Back in the same year, the Vanke Jade Blue Mountain project in Tangshan also surfaced due to complaints from minority shareholders, revealing a “lending” operation in a gray area.

Ultimately, Liu Xiao, then Vanke’s Executive Vice President, was publicly criticized and demoted two levels internally.

Moreover, problems have been reported in many projects under Greentown’s agency construction:

For example, the Greentown Chunjiang Mingyue project in Kunming, Yunnan, was reported by China Real Estate News in November 2019. The project’s name and sales staff’s descriptions all used the Greentown brand as a selling point. Only after the project halted and owners sought rights protection was it revealed that Greentown was only an agency.

Similar issues occurred at Greentown Rose Garden in Qidong, Jiangsu, where the project, originally scheduled for delivery at the end of 2019, was halted, and owners only learned they had bought “OEM houses” when they went to negotiate with Greentown.

In March 2025, residents of Greentown Chengyuan Phase III in Shijiazhuang repeatedly complained via the People’s Network Leadership Message Board about delays, unfulfilled promises, and infrastructure issues—another project involving Greentown’s agency model.

According to China Youth Network, in December 2018, the Zhangqiu Zhongkang Greentown Lily Garden project in Jinan, Shandong, saw four high-rise buildings, mostly sold, demolished by the developer due to concrete strength issues. The Zhangqiu Housing and Urban-Rural Development Committee confirmed this was a project managed by Greentown personnel under agency construction.

Additionally, projects like Lijianxiang An in Lichang, Qingdao, Zhonghang Greentown Lixiang City in Jimo, Qingdao, and Chengnan Greentown Garden in Lu’an, Anhui have also faced owner protests over issues like water leakage, stair cracking, peeling walls, and wall cracks—problems linked to Greentown’s agency projects.

Many inside and outside the industry lament that after Song Weiping’s departure, the once “Greentown” is gradually disappearing.

While light-asset operation seems to be a lucrative “business,” once projects encounter obstacles, how can the rights and interests of partners and homebuyers be protected? And how should profits lost be explained to shareholders? These questions remain to be answered by Greentown.