Country Garden Holdings Co. is expected to return to profit in 2025, driven by a $145 million non-cash gain from debt restructuring. The Chinese developer forecasts $1.4 billion to $2.2 billion in earnings for the year ending December 31, versus a $35.1 billion loss in 2023, per a Hong Kong Stock Exchange filing. This reversal follows two years of restructuring, with full results pending audit.

The $14.1 billion offshore debt plan, approved by a Hong Kong court, provided critical relief. However, excluding the non-cash impact, the firm still faces losses from property development margin pressures and asset impairments. Preliminary figures, unaudited as of Monday, suggest ongoing financial strain despite the restructuring milestone.

Headquartered in Foshan, Country Garden was once China’s largest developer by contracted sales. Its 2023 default triggered a protracted recovery, as the national property slump eroded demand. The restructuring involved complex negotiations with creditors, culminating in court-sanctioned terms that now underpin its path to profitability.

Investors remain cautious, as the non-cash gain masks operational challenges. Sustained performance hinges on resolving margin issues and strategic pivots. The case underscores risks in China’s real estate sector, where Country Garden’s turnaround may signal broader market recovery.