Market Analysis of Sunac China (01918.HK) After Debt Restructuring

The core catalyst for Sunac China (01918.HK) becoming a popular Hong Kong stock is its full completion of domestic and overseas debt restructuring, making it the first case among large distressed real estate enterprises in China to fully resolve domestic and overseas debt. On December 23, the company announced that approximately US$9.6 billion in overseas debt had been fully discharged and waived, and the restructuring plan officially took effect [1][3]. Previously, it completed domestic debt restructuring in January; the overall debt repayment pressure is expected to decrease by nearly 60 billion yuan, and it can save a large amount of interest expenses annually [1][5]. This event marks the complete resolution of the company’s debt risks, a substantial repair of its balance sheet, and enhances market confidence in the company’s future operational recovery [1][3].

Financial层面, the company’s cumulative contracted sales amount from January to November 2025 decreased by 25.3% year-on-year, but the contracted sales price increased by 34.23% year-on-year, indicating that the company is gradually transitioning to high-end properties [3][5]. On December 24, the company’s stock closed at HK$1.29, up 0.78% from the previous day, with a market capitalization of approximately HK$14.91 billion [1][2][4]. Among institutions, Goldman Sachs, Jefferies, and CICC have given “Buy” or “Outperform” ratings, with target prices generally higher than the current price [6].

1. Industry Benchmark Significance
   : As the first large real estate enterprise to complete full domestic and overseas debt restructuring, Sunac China’s debt resolution model provides a reference sample for the industry and helps boost market confidence in the entire real estate sector.
2. Business Structure Optimization
   : Although sales volume has declined, the significant increase in contracted sales prices shows that the company’s strategy of transitioning to high-end properties has initially achieved results, and it is expected to improve profitability in the future.
3. Long-term Creditor Confidence
   : The conversion prices of the two mandatory convertible bonds issued in the debt restructuring are HK$6.8 (a premium of approximately 330.38%) and HK$3.85 (a premium of approximately 143.67%), respectively, reflecting creditors’ recognition of the company’s long-term value [1][5].

• After the completion of debt restructuring, the company has exhausted all negative factors, and there is significant room for valuation repair.
• The transition to high-end properties is expected to increase gross profit margins and drive profit improvement.

• Uncertainty in Industry Recovery
  : The overall sales of the real estate industry still face pressure, and it will take time for the company’s sales growth to recover [3][5].
• Stock Price Dilution Risk
  : The future conversion of mandatory convertible bonds issued in the debt restructuring may dilute the equity of existing shareholders [1][5].
• Uncertainty in Operational Recovery
  : The company still needs to promote the resolution of debt risks and asset activation of domestic real estate projects [1].

By completing domestic and overseas debt restructuring, Sunac China successfully resolved approximately US$9.6 billion in overseas debt, becoming the first large real estate enterprise in the industry to fully solve its debt problems. Debt restructuring has laid the foundation for the company’s operational recovery; institutions have given positive ratings, and investor sentiment is divided—some are optimistic about valuation repair, while others are worried about dilution risks. The company is promoting its business transition to high-end properties; future performance needs to focus on industry recovery and operational recovery progress.