Shenwu Property A's annual report reveals losses: core business contraction, cash flow shortages, and high debt repayment pressure

Ask AI · Deep Property A turns a loss around relying on non-recurring gains—when will its core business truly become profitable?

On March 28, Shenzhen SASAC-backed listed company Deep Property A (000011) released its 2025 annual report. The report shows that the company achieved full-year operating revenue of 2.383 billion yuan, down 12.83% year over year; attributable net profit to shareholders was 33.8851 million yuan, reversing from a loss to profit, with an increase of 103.04%. On the surface, it appears this Shenzhen long-established real estate developer has emerged from a period of weak performance, but a breakdown of the data reveals that its profitability depends on non-recurring gains and losses, while its core operations remain in losses.

Real estate development business declines sharply; non-GAAP net profit is still loss-making

On the revenue side, Deep Property A’s overall revenue declined, and imbalances in the structure of its core businesses further intensified. In 2025, its real estate development business revenue was only 567 million yuan, plunging 43.52% year over year. Its share of total revenue dropped from 36.71% to 23.79%, becoming the main drag on performance.

At the same time, property management business revenue was 1.637 billion yuan, up 2.68% year over year, and its share of total revenue rose to 68.70%, becoming the company’s “core earnings base.” However, growth in the property business has been sluggish and has not been able to offset the decline in real estate development. The asset operation business increased 31.86%, but its revenue was only 179 million yuan, accounting for less than 8%, limiting its contribution to overall performance.

In addition, Deep Property A’s non-core business income reached 90.9832 million yuan, up 43.24%. With the contraction of core operations and an increased share of non-core income, the company’s ongoing business transformation challenges and insufficient growth momentum are highlighted.

It is worth noting that Deep Property A’s non-GAAP attributable net profit for 2025 is still loss-making. The annual report shows that in 2025, the company’s non-GAAP net profit was -12.3864 million yuan, an improvement in losses of 99.07% compared with -1.329 billion yuan in 2024.

Non-recurring gains and losses have become the key support for Deep Property A’s profitability. The annual report shows that in 2025, the company’s total non-recurring gains and losses amounted to 46.2715 million yuan. Among them, gains from disposal of non-current assets were 38.5386 million yuan and government subsidies were 10.8130 million yuan; together, these two items accounted for more than 90%. It is precisely this one-off gain that allowed the company to achieve book profit. If that portion of non-core income is excluded, the company’s core business not only fails to become profitable, but continues to incur losses—raising concerns about the quality of its earnings.

Operating cash flow is under strain; debt-servicing pressure is high

More seriously, Deep Property A has cash flow problems. The annual report shows that in 2025, Deep Property A’s net cash flow from operating activities was -2.086 billion yuan, further deteriorating from -1.424 billion yuan in 2024, down 46.49% year over year. In addition, over the past three years, the company’s net operating cash flow has remained negative throughout.

To ease funding pressure, Deep Property A stepped up financing efforts. In 2025, its net cash flow from financing activities reached 2.811 billion yuan, up 800.02% year over year. In addition, from 2023 to 2025, the company’s asset-liability ratio was 72.31%, 78.88%, and 79.04%, respectively, remaining at a high level in the industry. With high leverage combined with tight cash flow, the risk to the funding chain continues to accumulate.

In terms of profitability, although Deep Property A’s gross margin increased by 9.40 percentage points year over year to 27.11%, its net margin was only 0.20%, meaning it is nearly at the brink of profitability and loss. This figure reflects the failure of the company’s cost and expense controls: in 2025, sales expenses, administrative expenses, and financial expenses totaled 416 million yuan, and the three expenses as a percentage of revenue were 17.45%, up 29.16% year over year, substantially eroding profit margins.

Market participants point out that amid deep adjustments in the real estate industry, relying only on asset disposals and subsidies to maintain profitability is not enough to support long-term development. Going forward, if the company cannot stabilize its real estate development business, enhance the profitability of its core business, and improve its cash flow situation, its performance “recovery” may be difficult to sustain.

Written and reported by: Nandu Bay Finance and Society Reporter Qiu MoshAN