(Yicai) March 27 -- Shares in Shui On Land slumped as much as 5 percent today after the Hong Kong property developer, which focuses on the luxury residential market in mainland China, reported its first loss in nearly five years last year and a 50 percent drop in revenue, mainly due to a lack of new project deliveries.

Shui On Land’s share price [HKG: 0272] closed down 3.3 percent at HKD0.58 (USD0.07). Earlier in the day it sank to HKD0.57. The stock has lost 16 percent of its value since the beginning of the year.

Shui On Land logged a net loss of CNY1.8 billion (USD260.4 million) in 2025, compared with a profit of CNY180 million (USD26 million) the year before, according to the firm’s annual report released yesterday. The last time the company reported a loss was back in 2020, when it incurred a net loss of CNY740 million due to the impact of the Covid-19 pandemic.

Revenue halved last year from the year before to CNY4.1 billion (USD593 million), the report said. Notably, property sales recognized as revenue plummeted by 89 percent to CNY499 million (USD72.2 million) while rental and related income, excluding joint ventures, plunged 21 percent to CNY1.9 billion.

The big drop in revenue was mainly because no new residential projects were completed or handed over, Douglas Sung, chief investment officer at Shui On Land, said at the earnings call. The loss was largely due to impairments in the valuation of investment properties, amounting to CNY643 million (USD93 million), and unsold inventory, which came to CNY924 million.

Excluding these asset impairments, Shui On Land's core profit slumped 12 percent last year from the year before to CNY397 million (USD57.4 million), but it remains profitable, Sung said.

As a subsidiary of Hong Kong's Shui On Group, Shui On Land concentrates heavily on China’s large first-tier cities, especially Shanghai. However, with its flagship luxury residential project, Casa Lakeville, nearly sold out, the company is urgently looking for new sources of revenue.

Shui On Land is still pursuing sustainable growth in Shanghai and is taking a light-asset approach with four new mixed-use projects, including 1.22 million square meters of residential space and 291,000 square meters of commercial buildings, Chief Executive Officer Jessica Wang said at the earnings call.

As China’s economic hub, Shanghai continues to see net population inflows, with solid demand for housing. The prices of core mid-to-high-end properties remain strong and the company expects property prices in prime areas of the city to stabilize this year, Chairman Vincent Lo said, adding that urban renewal and village redevelopment projects will be key areas for the firm’s future growth.

Editors: Dou Shicong, Kim Taylor