Zensun Enterprises Limited

Zensun Enterprises is a small-capitalisation, Hong Kong-listed, family-controlled PRC residential developer concentrated in Zhengzhou and wider Henan Province. It sits within the private Zensun group founded by Mr. Zhang Jingguo and controlled by his spouse, Ms. Huang Yanping. Over 98% of revenue comes from delivering pre-sold residential and commercial units; hotel, rental, project-management and securities income is immaterial. The company is in prolonged financial distress. All three offshore USD senior note series (2023, 2024 and 2025 maturities) are in payment default. Defaulted and cross-defaulted borrowings totalled RMB4.62 billion at end-2025. Equity attributable to owners fell from RMB8.2 billion in FY2021 to a deficit of about RMB20.6 million at 30 June 2026. The business survives on interest-free, on-demand loans of about RMB8.8 billion from controlling-shareholder entities and on slow conversion of a large Henan land bank. The investment case is essentially a distressed, related-party-dependent option on a Henan housing recovery.

Company's own description (FY2025 results, Note 1 and MD&A). The group's principal activities are property development, property investment and management, project management and sales services, hotel operations, and securities trading and investment. These are carried out in Hong Kong, the Chinese Mainland and overseas. Management describes a strategy of sustainable development by seeking investment opportunities that strengthen profitability under acceptable risk in those markets.

Independent characterisation. In economic substance, Zensun is a single-province PRC homebuilder with a small legacy portfolio of offshore assets inherited from the pre-2015 Heng Fai era. Those assets are a near-wholly-owned US housing vehicle and a minority stake in a NYSE-listed medical REIT. The PRC operations follow the standard pre-sale model. Land use rights are bought at auction, the company funds construction with project loans and buyer deposits, and revenue is recognised at a point in time on handover. That model explains the extreme volatility in reported revenue: FY2023 RMB20.0bn, H1 2024 RMB0.18bn, FY2025 RMB6.9bn and H1 2026 RMB0.36bn. Revenue tracks delivery schedules, not contract sales. Contract liabilities (buyer deposits) have run down from RMB31.3bn (FY2022) to RMB9.2bn (FY2025). This shows the delivery backlog shrinking much faster than new sales are replenishing it.

Revenue model mix (FY2025, RMB'000; FY2025 results Note 3).

There is no subscription or licensing revenue. The "Zensun/正商" trademark is licensed into the group royalty-free by related party Henan Zensun Real Estate Co., Ltd. That licence ran until July 2025 (FY2025 results Note 15). Renewal status was not disclosed in retrieved materials.

Value chain position. Zensun acts as developer and master planner. Construction is largely outsourced, including to a related contractor controlled by Ms. Zhang Huiqi, the daughter of the controlling shareholder. Related-party construction costs were RMB542.9M in FY2025 and RMB1,489.7M in FY2024 (Zensun Development Group). Accrued construction costs owed to the daughter-controlled contractor were RMB792.4M at end-2025. Property engineering and property management are provided by related party Xingye Wulian Service Group (HKEX: 9916), also controlled by Ms. Zhang Huiqi, for RMB20.2M in FY2025.

Customer types and end-markets. Customers are mainly retail homebuyers in Zhengzhou and other Henan cities, who are largely mortgage-financed. Zensun guarantees buyers' bank mortgages until title certificates are issued. Those guarantees amounted to RMB18.2bn at end-2025. The company also sells to commercial unit purchasers (e.g., Zhengzhou Zensun Boyue Commercial Centre). Project-management clients are independent property owners. Hotel guests come through the single Zhengzhou hotel. Tenants occupy investment properties in Hong Kong, Singapore, the Mainland and the US (AHR senior housing).

Stated strategy (FY2025 results, "Outlook and Prospects", paraphrased).

1. Henan land-bank development. Build out existing reserves, which management says cover about three years, with continued focus on Zhengzhou and selected first- and second-tier cities. Bid for new land opportunistically.

2. Light-asset diversification. Expand integrated project management services for fee income without land or construction capital. The segment is actually shrinking (revenue -23.8% in FY2025).

3. Strategic partnerships. Seek co-investment partners to reduce early-stage capital needs on projects.

4. Funding and liquidity. Repay controlling-shareholder financial assistance from presales and sales. Also use bank and financial-institution borrowing, plus "potential additional issuance of equity securities or other capital market instruments".

5. US portfolio. Hold XRN for long-term appreciation and yield. Reposition AHR from single-family rentals toward senior housing communities.

6. Cost control. Selling and marketing expenses were cut 44.7% and administrative expenses 5.5% in FY2025. In H1 2026, administrative expenses fell 24.8% and selling and marketing 10.8%.

Going-concern measures (FY2025 Note 2). The board lists five: (a) negotiate with creditors and noteholders; (b) accelerate sales and collections; (c) restructure debt and obtain new loans; (d) control costs and capex; and (e) agree repayment or settlement schedules with contractors.

Initiatives in the last 24 months.

Medium-term targets or guidance: none published. There is no contract sales target, deleveraging target or ESG quantified commitment.

Zensun does not publish a full project-level schedule (GFA, ASP, completion) in its results announcements. The catalogue below combines the company website project list, results disclosures and interim reports. Pricing is not disclosed project by project. Group-level average selling price (ASP) recognised was RMB7,110/sq m in FY2024, RMB7,906/sq m in FY2025 and RMB4,633/sq m in H1 2026.

Property Development (Henan, PRC)

Land bank (30 Jun 2024, latest quantified disclosure; resumption announcement, 27 Nov 2024). The group had 67 completed projects or sub-phases and 36 ongoing complex projects. It held 90 land parcels under development or planning, with a site area of about 6.3M sq m and estimated GFA of about 13.5M sq m. Estimated saleable or leasable GFA under development was about 4.1M sq m, with about 2.4M sq m under planning. Management stated in FY2025 that reserves support the next three years of development.

Delivery cadence. The company delivered 19 newly completed projects or phases in FY2024 and 4 in FY2025. GFA recognised was 1,327,000 sq m in FY2024, 797,000 sq m in FY2025 and 52,500 sq m in H1 2026.

Project Management Services

These are integrated development management and sales services for independent property owners, paid as management fees. Revenue was RMB13.3M in FY2025, down from RMB17.5M, because fewer new contracts were signed. Management positions this as its "light-asset diversification". Named client projects and fee rates are not disclosed.

Hotel Operations

The group runs one hotel in Zhengzhou, opened in 2022. Its name and room count are not disclosed in retrieved materials. Revenue was RMB34.9M in FY2025, of which room revenue recognised over time was RMB19.1M and F&B/other at a point in time RMB15.8M.

Overseas Property Investment

Securities Investment

The main holding is about 5.6% of Chiron Real Estate Inc. (NYSE: XRN). This US net-lease medical REIT was renamed from Global Medical REIT (GMRE) effective 23 Feb 2026. FVTPL assets totalled RMB180.1M at end-2025. Dividend income was RMB14.6M in FY2025.