China’s Property Developers: The Other Side of the Coin
From divergence thesis to emergency room reality.
Good Afternoon,
In May 2025, we published [our first deep-dive on Chinese property developers, a 41-page effort that we described at the time as a “labour of love.” The central thesis was that the era of universal distress was ending, to be replaced by a profound divergence: SOE developers pulling away from POE developers across every dimension that mattered: balance sheets, funding access, land banking, margins, and market share. We argued that investors should be selective, favour SOEs, demand yield, and prepare for patience. We profiled ten developers, built a criteria framework for identifying value, and cautioned that while “pockets of resilience” were emerging, the risks remained very real.
Nine months on, it’s time to mark our homework.
This piece is a companion to our January piece on property management companies, where we scored our original PM thesis 4 out of 5 and explored how the downstream effects of the developer crisis were reshaping the PM sector. Today we go upstream, back to the developers themselves, to assess what we got right, what we got wrong, what has changed, and what the latest sell-side research tells us about the road ahead. For the background on the Three Red Lines, the history of the crisis, and the broader macro context, we’d point readers to the original May 2025 piece. We won’t rehash all of that here. Instead, we’ll focus on what’s different.
IMPORTANT NOTE: We are presently in the process of getting a license with a regulator, and while that process is ongoing we are not able to publish the portfolio update and company notes. We’ll do a big reveal of the new plans as soon as we’re in a position to do thusly. We apologise for it taking time, but this is unfortunately a fact of life. With that we’re also putting the opinion part of this and all other pieces behind the wall.
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Scoring Our May 2025 Thesis
In the spirit of accountability (something we try to practise at Panda Perspectives, as readers of the PM scorecard will know), let’s run through the key calls from May 2025 and see how they’ve held up.
