China’s Property Developers: The Other Side of the Coin

Why It Matters

Understanding the divergence between SOE and POE developers is crucial for investors navigating China's real‑estate market, where policy constraints and financing limits continue to reshape risk profiles. The episode offers a timely audit of prior forecasts, helping listeners gauge the reliability of analytical frameworks and adjust strategies in a sector that remains a barometer for China’s broader economic health.

China’s Property Developers: The Other Side of the Coin

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.

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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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*Nothing in this Substack is Investment Advice. This information is provided for informational purposes only and does not constitute financial, investment, or other advice. Any examples used are for illustrative purposes only and do not reflect actual recommendations. Please consult a licensed financial advisor or conduct your own research before making any investment decisions. The authors, publishers, and affiliates of this content do not guarantee the accuracy, completeness, or suitability of the information and are not responsible for any losses, damages, or actions taken based on this information. Past performance is not indicative of future results.*

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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.

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