Recently, the liquidation process of China South City Holdings Limited has been significantly accelerated. According to the Hong Kong Exchange announcement, China South City sold 100% equity of two real estate projects in Harbin for a total price of

Before the urgent suspension of trading on the Hong Kong Stock Exchange, the stock price of South China Mall was reported at HK$0.107, with a single-day decline of 1.83%. Its market value was only HK$12.24 billion, evaporating over 98% from its histo

Debt black hole, failed self-rescue

The financial collapse of China South City has been foreshadowed. According to a report by Home Furnishing New Paradigm, the company's annual report for 2024 showed that the net loss attributable to the parent company for the whole year was nearly 9

As of the end of last year, the defaulted loan amount of South China City reached HK$15742 million, involving the principal and interest of interest-bearing debt that were not repaid on schedule, triggering cross-default clauses and leading to an imm

Meanwhile, SCIT is also facing a cascading avalanche of US dollar bonds. By 2024, SCIT will face the redemption of five US dollar bonds with a total amount of 1.199 billion dollars.

Audit institutions sound the alarm. As the independent auditor of South China City, Ernst & Young issued a rare warning of "unable to express an opinion" on its financial report, exposing the almost out-of-control financial system of the company.

Although South China City successfully extended the liquidation petition for three months at the hearing on May 19, Judge Chen Jingfen pointed out in the ruling that the company's restructuring plan had not received sufficient support from creditors

Self-rescue and rescue by others, ultimately difficult to reverse the situation

South China City is not waiting to wait and die. In May 2022, Shenzhen Special Economic Zone Construction and Development Group invested HK$1.9095 billion in strategic shares, subscribed for 3.35 billion new shares at HK$0.57 per share, and obtained

Since then, it has launched a package of rescue plans to try to reverse the situation, including announcing plans to launch an equity investment fund with a total scale of up to RMB 11 billion to inject fresh funds into valuable projects under the So

In addition, the new paradigm of home furnishing has also focused on promoting the formation of large syndicated loans, with the goal of replacing the high-interest debts of the South China Mall with new financing at a lower cost. This promises to si

However, the series of actions did not reverse the cold winter of South China Mall. The depletion of liquidity in the real estate industry, coupled with the inherent defects of South China Mall's business model, ultimately made the rescue efforts fut

Aftershock: How to solve the dilemma of real estate transformation

As a benchmark enterprise in the development and operation of China's commercial logistics park, South China City operates parks with 100,000 businesses nationwide, directly drives 330,000 jobs, and has contributed approximately 20 billion yuan in ta

One is the chain reaction in the industry chain. The operation of merchants, supply chain settlement, and the accounts of supporting service providers are at risk of interruption, which may cause partial debt chains to collapse. The other is that the

The deeper impact can be seen at the level of legal practice. Since the outbreak of the real estate crisis in 2021, Hong Kong courts have issued at least six winding-up orders against mainland real estate companies. The cross-border winding-up operat

The rise and fall of South China Mall reflects the pain of China's real estate transformation. Home furnishing trend observers have found that its original business model of a trade logistics park was once praised as a miracle in Shenzhen Pinghu. How

It is urgent for the industry to reflect and rethink. The traditional path of relying on rental income to support the business has failed. Industrial operators need to urgently reconstruct their revenue models. Light asset output, data services, supp

Conclusion

From 'Miracle in Pinghu' to 'Liquidation Sample,' the 23-year rise and fall of South China City reveal the vulnerability of industrial real estate developers in cash flow mismatches and the structural limitations of any single rescue model in resourc

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