The company acted decisively in 2025 to draw a line under those risks, recognising $291 million in credit-loss allowances — its largest on record — in a sweeping move to clean up its balance sheet. While that sank its bottom line, it signalled an attempt to put the worst of its legacy exposures behind it as it sought to reset its business.
The move also reflects the company’s intention not to commit fresh capital to troubled projects, Liu Hua, Yangzijiang Financial’s executive chairman, tells The Edge Singapore. “We don’t want to put good money into bad money.”
Instead, the group is seeking to recover value as stalled residential projects in China are completed and units gradually sold through restructuring efforts led by local governments and developers.
Measures unveiled by Beijing in recent years include easing mortgage rules and lowering minimum downpayment requirements to support homebuyers. Bank financing is also being channelled to viable housing developments to complete stalled projects and deliver presold homes. Local governments have also been told to buy unsold property for conversion into affordable housing.
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“Our objective is to recover what we can from the remaining value of these projects,” says Liu, who succeeded Chinese billionaire Ren Yuanlin as Yangzijiang Financial’s executive chairman in October last year. Before that, she was deputy CEO and CFO.
But even with the aggressive clean-up, shares of Yangzijiang Financial continue to trade at roughly half of its net asset value. The steep discount reflects persistent investor scepticism about the quality of its investment portfolio and the eventual recovery value of loans linked to China’s real estate market.
For now, the timing of any meaningful recovery remains uncertain. Yangzijiang Financial’s legacy exposures could take up to three years to be resolved, according to Liu. “Some of them could be resolved a bit earlier, but there could be some delay for others because this is not all within our control.”
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The carveout of its maritime business has also reshaped Yangzijiang Financial’s investment case. Yangzijiang Maritime Development was spun off and listed on SGX last November by way of introduction. That left Yangzijiang Financial squarely positioned as an investment and asset-management platform, without the more promising maritime financing business that once provided a hedge against its China credit exposure.
The challenge now for Yangzijiang Financial is convincing investors that the worst of its hangover from China’s credit boom is behind it and that the business emerging from the clean-up merits a fresh look.
Portfolio rebalancing
As part of this shift, the company is targeting a long-term portfolio mix of roughly 40% income-generating debt, 40% equities and 20% cash. It now has about $1.71 billion in assets under management, of which about half are in debt investments, mostly in China. About 37% of its current portfolio is in cash and 13% in equities and other investments.
Within the equity allocation, about half will be deployed into private equity, targeting strong businesses with room for operational improvement. The rest will be invested in selected equities across China and Southeast Asia.
Early attempts to deploy capital under this strategy highlight both the opportunities and the execution risks.
In October last year, Yangzijiang Financial announced a RMB1.02 billion ($190 million) investment as part of a consortium to lead the restructuring of Ningbo Shanshan, a producer of lithium battery anode materials used in electric vehicles.
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That would have given the consortium effective control of about 23% of the Shanghai-listed company. The deal was framed as an opportunity to tap into China’s fast-growing new-energy supply chain.
But the episode also highlights the execution risks that come with such ambitions. The proposed restructuring ultimately did not proceed after it failed to secure approval from Ningbo Shanshan’s creditors.
For Yangzijiang Financial, converting such opportunities into completed investments will be key as it reshapes its own portfolio. Undeterred, it intends to deploy up to RMB1 billion in the first half of 2026 into equities listed in China and Singapore that offer returns of at least 4.5%. In Singapore, it is also applying for a capital markets services licence to expand its fund management business.
Over the next three years, the company expects its investment portfolio to shift away from its current China-heavy exposure towards a roughly even split between China and the wider Asia-Pacific region.
While the broad strokes are in place, translating the strategy into a rebalanced portfolio will take time. For investors, the question is whether the company can deliver on that transition quickly enough to close the persistent gap between its share price and net asset value, which amounted to 50.2 cents a share as at Dec 31, 2025.
For now, the numbers suggest the rebalancing still has some way to run.
China’s debt legacy lingers
The biggest overhang on Yangzijiang Financial is still its legacy debt in China. As of Dec 31, 2025, it had $1.36 billion in gross debt investments, of which slightly more than half were non-performing. Its non-performing loan (NPL) ratio rose to 50.3% last year, crossing the 50% mark for the first time and reaching its highest level since its 2022 listing on SGX.
In absolute terms, NPLs rose from $675 million in 2024 to $685 million last year. That’s more than the $638 million cash on its balance sheet. Based on current conditions, the company is assuming expected credit losses of about 63% of its NPLs.
Liu believes the stock’s steep discount to book value may overstate the risks embedded in the loan portfolio. As at end-2025, Yangzijiang Financial had about 18 cents of net cash per share. Even if the entire net balance of its NPLs — $254 million after provisions, or 7 cents a share — were written off, the group’s adjusted net asset value would still be roughly 43 cents per share.
“That is still significantly higher than where the stock is trading today,” she says.
Whether those loans ultimately recover meaningful value will depend largely on the trajectory of China’s economy. The backdrop remains challenging, with the property market still strained and deflationary pressures lingering. Earlier this month, Beijing issued its strongest pledge yet to end deflation, signalling a renewed push to revive demand and stabilise prices after years of sluggish growth.
A sustained recovery could ease financial pressure on developers and improve recovery prospects for lenders such as Yangzijiang Financial. “This is definitely a positive sign by Beijing,” says Liu.
“Even though we have made provisions based on current market conditions, they will be reassessed at every reporting period. If conditions improve, we should be able to recover some of the loans and even reverse part of those provisions.”
Enough for a re-rating?
Ultimately, the real test lies in execution. After years of navigating the fallout from China’s property downturn, Yangzijiang Financial will have to convince investors that its future lies not in unwinding the past but in redeploying capital into a new cycle of regional investments.
One sign of that shift is its growing interest in Singapore’s equities market. The company is anchoring a $100 million fund managed by ICH Asset Management to back Singapore’s small- and mid-cap firms from the pre-IPO stage through to public markets. The initiative dovetails with the central bank’s Equity Market Development Programme, which has helped revive liquidity and investor interest in the local stock market since last year.
But even as it looks to new opportunities, the key challenge is working through its loan book in China. By recognising large provisions and accelerating loan recoveries, it appears intent on clearing legacy risks, even at the cost of short-term earnings. This will go some way towards helping reset expectations and enabling the group to rebuild its deployable capital as cash is gradually recovered from its debt investments.
The question is whether that reset will be enough to trigger a re-rating.
If China’s property market stabilises and loan recoveries come in stronger than expected, the heavy allowances booked in 2025 could mark the trough of the cycle. At the same time, the push to diversify its investments across Asia — alongside its pledge to pay out 40% of earnings as dividends — could gradually reshape investor perceptions.
Until then, Yangzijiang Financial remains a company in transition, one still working through the after-effects of China’s credit boom while repositioning itself for a different investment landscape. For investors, the real signal will come when the clean-up finally begins to show up in the share price.
