$205 Million Old Debt Triggers Liquidation Crisis, Veteran Property Developer Sunac100 on the Brink

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界面新闻记者 | Wang Yuhan

A single old debt has once again pushed Sunshine 100 China (02608.HK, hereafter Sunshine 100), a long-standing penny stock in the real estate sector, to the brink of collapse.

On March 12, Sunshine 100 announced that it failed to make a scheduled payment of $205 million due in March 2025. Creditors Haitong International have filed a winding-up petition with the High Court of Hong Kong, with a hearing scheduled for May 20.

This is not the first time Sunshine 100 has faced the threat of winding-up. As early as 2024, the company was sued for winding-up by creditor Baishun (Hong Kong) over another debt, but the petition was later withdrawn after negotiations.

From a stock pledge default and passive departure of the controlling shareholder to now facing a winding-up crisis, Sunshine 100’s operational difficulties have continued to worsen in recent years. This winding-up petition is not an abrupt event but a culmination of years of high debt, operational losses, and failed transformation efforts.

Screenshot from the announcement on Ji Mian News

According to Hong Kong’s Companies (Winding Up and Miscellaneous Provisions) Ordinance, Section 182, from the date of the petition (March 6, 2026), any transfer of shares or disposal of assets by the company without approval from the High Court is invalid. This means that even if Sunshine 100 attempts to rescue itself through asset disposal, its operational options are now severely restricted.

In response to the winding-up crisis, Sunshine 100 explicitly stated in the announcement that it “will oppose the petition,” arguing that the board believes the petition does not serve the interests of other stakeholders and may harm the company’s value. But how difficult is it for a company to overturn a winding-up petition through court debate, based on past cases in Hong Kong?

Yan Yuejin, Deputy Director of the E-House Research Institute in Shanghai, commented in an interview with Ji Mian News: “In past cases, successfully opposing a winding-up petition through court debate is quite challenging, and the success rate is low. Most companies choose to reach a settlement with the petitioner before the hearing, such as through debt restructuring to withdraw the petition.”

This means that Sunshine 100’s time window is actually only a little over two months. Before the hearing on May 20, the company must present a substantive plan convincing Haitong International.

If an agreement cannot be reached and the court issues a winding-up order, the consequences will be severe. Yan Yuejin further explained: “If the court orders winding-up, the company’s assets will be used to pay debts and expenses. Existing shareholders’ equity is usually very low due to the order of repayment, and may even be wiped out entirely.”

The fatality of the winding-up petition stems from Sunshine 100’s own long-standing financial troubles.

Ji Mian News reviewed the company’s recent financial reports and found that Sunshine 100 has been in deep losses for several consecutive years. From 2021 to 2024, net losses after non-recurring items were approximately RMB 3.606 billion, RMB 2.957 billion, RMB 2.971 billion, and RMB 5.647 billion respectively. In the first half of 2025, losses narrowed somewhat but still reached RMB 1.228 billion.

Sunshine 100’s recent profitability status (compiled by Ji Mian News)

More worrying is the company’s asset-liability situation. As of June 30, 2025, the company’s net book value per share had fallen to negative RMB 2.782. Cash and cash equivalents were only RMB 551 million, while total loans and borrowings amounted to RMB 12.891 billion, creating a huge debt repayment gap.

From a business structure perspective, Sunshine 100’s difficulties also reflect its failed transformation strategy. The company previously developed multi-purpose commercial complexes and mixed-use communities under the “Sunshine 100” brand in 22 cities including Tianjin, Chongqing, and Wuhan. Recently, it has attempted to shift toward “health + cultural tourism,” even taking over the Snow Mountain Art Town project from Li Yapeng.

However, investments in cultural tourism projects tend to have long cycles and large capital requirements, which, during an industry downturn, have accelerated the strain on the company’s cash flow. Now, the project company has entered bankruptcy review, exemplifying the failure of Sunshine 100’s transformation.

Sunshine 100’s predicament is not unique. On the same day, there were reports that R&F Properties’ chairman Li Silian was restricted from leaving the country due to debt issues, fueling market concerns about the credit risk of distressed property developers.

Meanwhile, since 2025, several real estate companies such as China Minmetals Land, Dayuecheng Properties, and Beijing Construction have exited the Hong Kong stock market, marking a wave of delistings. This reflects the collective difficulties faced by listed real estate firms in the capital markets.

Liu Shui, Director of Corporate Research at China Index Academy, analyzed the deeper logic behind the delisting wave in an interview with Ji Mian News: First, the valuation of listed real estate companies has been deeply discounted for a long time, with their equity financing functions almost entirely lost. Most have a price-to-net-asset ratio below 0.5, with some trading at a 70-90% discount to net assets. When stock prices fall below net asset value significantly, issuing new shares would cause severe dilution, effectively closing off financing channels.

Second, the high costs of maintaining listing make it very uncost-effective for property developers. The Hong Kong Stock Exchange’s increasing strictness on disclosures, insider trading, and related-party transactions means annual fixed costs for auditing, compliance, information disclosure, and investor relations can reach several million HKD. When the financing benefits are zero, these costs become a pure financial burden.

Third, delisting allows companies to escape short-term performance pressures from the capital market and operate more flexibly. With the deep industry adjustment, listed companies face pressure to disclose quarterly results and see their stock prices fluctuate sharply. Long-term strategic adjustments, such as large-scale asset disposals or restructuring, are difficult to implement under such conditions. After delisting, companies can reduce market scrutiny over sensitive debt negotiations and asset disposals, speeding up risk resolution.

“2026 is likely to become the ‘clearing’ year for some small and medium-sized Hong Kong-listed property companies,” Yan Yuejin said in an interview. “Faced with huge maturing debts and sluggish sales, companies like Sunshine 100 that lack financing channels and are continuously losing money will find it hard to escape their predicament through operations alone. As creditors lose patience and pursue legal remedies, cases of winding-up, default, and restructuring are expected to increase significantly.”

This also means that even if Sunshine 100 temporarily avoids winding-up this time, its long-term survival remains doubtful. Under the backdrop of market segmentation and tightening financing, tail-end property firms lacking quality assets and stable cash flow are gradually losing the chance of rescue.