Jing Tou Development Plans to Divest Real Estate Business, Expected to Constitute Major Asset Restructuring

On the evening of March 15, Jingtou Development (600683) announced that it is planning to transfer assets and liabilities related to its main real estate development business. The transaction is expected to constitute a major asset restructuring, and the company’s stock will not be suspended from trading. Since the beginning of the year, Jingtou Development’s stock price has doubled in value.

The announcement states that the transferee of the relevant assets is Beijing Infrastructure Investment Co., Ltd. (referred to as “Jingtou Company”), the controlling shareholder of Jingtou Development. The transaction will be paid in cash. According to preliminary research and estimates by Jingtou Development, this matter is expected to involve a major asset reorganization and related-party transactions.

“This matter is still in the planning stage, and the specific scope, price, and other details have not been finalized. No agreements have been signed between the parties, and the transaction plan still requires further discussion and verification,” Jingtou Development said. However, they further stated that if the matter is successfully completed, the company’s operating income and total assets will decrease, which is expected to improve the company’s debt-to-asset ratio and optimize its asset structure.

Currently, real estate is Jingtou Development’s main business. Focusing on TOD transit-oriented properties, Jingtou Development primarily develops and sells projects independently, with property management and leasing as supplementary operations. Since the first TOD project in 2011, Jingtou Development has invested in and developed multiple TOD transit projects, including Beijing Xihua Fu and Park Yue Fu, with a total development scale exceeding 5 million square meters.

Recent financial forecasts show that Jingtou Development will suffer losses for the third consecutive year. The company expects a net profit attributable to the parent company of between -1.025 billion and -1.23 billion yuan for 2025. The losses are attributed to increased interest expenses on project costs and asset impairments on some projects according to accounting standards.

In fact, over the past two years, Jingtou Development has shifted its focus from real estate development to delivery and inventory clearance. In recent years, the company’s new real estate reserve projects have been zero, and the new construction area in 2025 is expected to decrease by 86.73% year-on-year to only 24,200 square meters. Meanwhile, the completed area has increased significantly by 143.74%. For 2025, Jingtou Development’s contracted sales amount is 2.998 billion yuan, down 44.48% year-on-year.

Regarding debt, as of June 30, 2025, Jingtou Development’s asset-liability ratio was 90.54%, an increase of 2.74 percentage points from the beginning of the period. However, Jingtou Development emphasizes that pre-sale funds continue to be collected, the overall asset quality remains good, operational risks are controllable, and the company has the capacity to repay maturing debts.

In the past two years, A-share listed real estate companies have launched waves of divesting their real estate businesses, with state-owned enterprises leading the trend. China Communications Construction Real Estate, Jin Tuo Cheng Kai, Gree Real Estate, among others, have successively implemented such measures, divesting real estate development assets and liabilities, and shifting their core focus to property services, asset management, urban operations, or entering new sectors such as duty-free shops, new energy, and high-end manufacturing.

In previous cases, the capital market generally responded positively to such divestment operations by real estate companies. However, it is worth noting that since the beginning of this year, Jingtou Development’s stock price has doubled. Today, Jingtou Development also disclosed an abnormal trading fluctuation announcement, confirming that aside from the aforementioned transaction, there are no other major undisclosed matters or risks.