China Merchants Shekou guarantees $1.2 bn loan for subsidiary Zhaocheng Real Estate

China Merchants Shekou Industrial Zone Holdings (CMSK) announced its intention to provide a joint and several liability guarantee for a 1.2 billion yuan loan facility extended to its 50%-owned subsidiary, Wuhan Zhaocheng Real Estate Co., Ltd. (Zhaocheng Real Estate). The three-year loan is being provided by a banking syndicate including China Construction Bank and Industrial and Commercial Bank of China. CMSK's guarantee will cover up to 600 million yuan, reflecting its 50% equity stake in Zhaocheng Real Estate.

The guarantee period will extend for three years beyond the loan's maturity date. This action falls within the 31.6 billion yuan total guarantee limit for CMSK's subsidiaries, previously approved at the company's 2024 annual general meeting. Post-guarantee, CMSK's total outstanding guarantees for subsidiaries will be 22.699 billion yuan, with 9.052 billion yuan specifically for subsidiaries with a debt-to-asset ratio exceeding 70%.

As of October 31, 2025, Zhaocheng Real Estate reported total assets of 714,305.09 million yuan and total liabilities of 294,309.1 million yuan, resulting in net assets of 419,995.99 million yuan. For the period of January to October 2025, the subsidiary generated revenue of 5,168.36 million yuan and a net loss of 3,239.73 million yuan.