Xinyuan Real Estate statement announcement. Source: Official corporate WeChat

Reporter Zhang Bei, Huang Zhinan, Shenzhen report

On June 1, a sternly worded statement from Xinyuan Real Estate Holdings suddenly brought the power struggle over the control of the Hong Kong stock property management platform Xinyuan Services (01895.HK) into the spotlight.

As the controlling shareholder holding 41.56% of Xinyuan Property Services Group Co., Ltd. (01895.HK, hereinafter referred to as "Xinyuan Services"), Xinyuan Real Estate pointed out in the statement that the chairman of the board, Shen Yuanqing, manipulated the board to forcibly pass a so-called "resolution" to appoint five new directors and dismiss three directors without any prior communication or legal procedures, while also dismissing several core executives, leading to severe chaos in corporate governance and significant risks to operational safety.

This turmoil, characterized by the former real estate owner as an "illegal reorganization," is essentially a "power grab" by the professional management team against the controlling shareholder.

Huang Lichong, president of Huisheng International Capital, analyzed to the "Hua Xia Times" reporter that the changes in shareholding are noteworthy: from the second half of 2024 to 2025, there is a disclosure of share reduction on the side of Xinyuan Real Estate, while Shen Yuanqing's shareholding is increasing. "To be more precise: there is no transfer of control, but there is a trend of the controlling shareholder's shareholding decreasing and the management's shareholding increasing."

Four years ago, Shen Yuanqing was recruited by founder Daniel Zhang to resolve a crisis involving a pledge of 402 million yuan in deposits; four years later, he increased his stake while the real estate parent company was mired in debt and attempted to complete a separation through a swift board "coup."

The Rise of the Firefighter

The story begins with a "white knight" color.

In 2022, Xinyuan Services was suspended due to a violation of pledge by the controlling shareholder Xinyuan Real Estate involving a 402 million yuan time deposit, facing the risk of delisting.

In September of that year, Xinyuan Real Estate chairman Daniel Zhang brought in reinforcements, inviting Shen Yuanqing, who has a strong technology background, to serve as chairman of the board of Xinyuan Services. At that time, Shen Yuanqing's resume included positions such as president of JD Cloud and COO of Century Internet, all of which reflected a new economy imprint, contrasting sharply with the traditional property management industry.

He was expected to clarify the financial maze and restore market confidence. After taking office, Shen Yuanqing led an internal investigation, and through debt recovery and improving internal controls, he finally promoted Xinyuan Services to resume trading in June 2024.

This "firefighting" experience not only accumulated authority for him within the board but also laid the groundwork for embedding technology genes in the future.

Subsequently, he began to assemble a management team with a distinct internet background, with many former technical backbones from JD entering the core management layer, responsible for digitalization and value-added services. His strategic intent was clear: to shift Xinyuan Services from a traditional model reliant on the real estate parent company for project delivery to a technology-driven independent third-party property management platform The real turning point occurred at the equity level. As Xinyuan Real Estate's liquidity crisis deepened in 2024, Shen Yuanqing continued to absorb shares in the secondary market through entities he controlled or was associated with.

By the end of 2024, he had become the second-largest shareholder after Xinyuan Real Estate, with a shareholding ratio of 10.37%. At this time, the real estate parent company was preoccupied with its own issues, providing an opportunity for professional managers to "skillfully seize" control.

The drastic measures appeared in April this year, when the board of directors of Xinyuan Services passed a resolution to dismiss three directors representing the interests of the real estate side: Feng Bo, Tian Wenzhi, and Zhao Xia. Simultaneously, five new directors were appointed, including individuals with backgrounds in finance and technology. At the same time, several core executives were dismissed, leading to a significant overhaul of the management team at Xinyuan Services.

On June 1, Xinyuan Real Estate officially issued a statement accusing the aforementioned reorganization of being "illegal and without any legal effect," and resorted to judicial action.

However, the change in control could not immediately erase the shadows over the operational level. In the fiscal year 2025, Xinyuan Services reported revenue of 905 million yuan, a year-on-year increase of 4.1%; net profit was 99.43 million yuan, a year-on-year increase of 12.2%, seemingly stable.

But the salary correction announcement in April this year revealed cracks, as the chairman of the board, Shen Yuanqing's salary for 2024 jumped from the previously disclosed 6.886 million yuan to 13.886 million yuan, "repairing" a salary of 7 million yuan.

Regarding whether this personnel adjustment has caused operational chaos, Huang Lichong stated that there is currently not enough public evidence to prove that project operations and customer services have experienced widespread disorder or systemic collapse, but the risk in financial management is the highest.

"The simultaneous changes in the CFO, board secretary, division heads, and board structure, combined with related receivables and asset pledges, have put the company under high pressure in internal control and governance. The real chaos in property companies often manifests as project managers being hesitant to make decisions, slower payment approvals, core personnel being cautious, and stagnation in third-party expansion, among other hidden issues," he said.

As of the time of publication, the reporter has repeatedly called the publicly disclosed contact number on Xinyuan's official WeChat account and sent emails to its official IR and PR email addresses. The former consistently indicated it was a non-working number, while the latter showed that emails could not be delivered normally.

Another person close to Xinyuan Services' public relations team revealed to the reporter that the company's official investor relations communication email channel has long been unusable.

The Dilemma of Xinyuan System

This power struggle over the property management platform directly points to the long-term deep predicament of its real estate parent, Xinyuan Real Estate.

In January 2026, after experiencing cross-defaults and several attempts at debt restructuring, Xinyuan Real Estate (XIN.US) was officially delisted from the New York Stock Exchange.

Prior to this, several of its dollar bonds had triggered substantial defaults, and some domestic projects were halted, with the entity being repeatedly listed as a dishonest executor. The sinking of the real estate flagship directly undermined its control over its most valuable asset—Xinyuan Services.

Perhaps foreseeing that the collapse of the parent company would affect the independence and market valuation of the property platform, Shen Yuanqing's camp chose to launch a full-scale attack at this time They attempted to completely sever ties with the real estate sector, introduce external strategic investors, and even push for a name change to reshape their brand image, but the real estate faction's counterattack was equally resolute.

The stern statement on June 1 not only denied the validity of the board's resolution but also served as a declaration of the remaining control of the real estate faction, aimed at stabilizing the confidence of financial institutions and suppliers still holding debts.

A legal advisor close to Xinyuan Real Estate's debt restructuring told this reporter, "The control of the property management platform is one of the few valuable bargaining chips currently in the hands of the real estate side, and they will not easily let it go."

In response to the market claim that "Hong Kong-listed property companies generally have weak shareholders and strong management," Huang Lichong explicitly denied it.

He believes that the real issue with Hong Kong-listed property companies is not "weak shareholders," but rather that many major shareholders in the real estate sector have weakened cash flow and credit, leading to a decline in their control, support, and market trust in the property platforms. Property companies themselves have relatively stable cash flow, are light asset, can distribute dividends, and can be financed, making it easier for management to gain a voice. However, this should not turn into management using the listed company as a tool for "insider control."

The depth of the contradiction reflects the systemic risks of the "real estate + property" bundling model during the entire real estate downturn cycle. Property companies, originally seen as light asset, counter-cyclical "cash cows" that were spun off for listing, have repeatedly become "cash machines" for the parent company due to related party fund occupation and illegal guarantees.

Shen Yuanqing's counter-offensive appears to be a governance revolution led by a tech-savvy professional manager, aiming to liberate the company from its subordinate position to real estate.

In Huang Lichong's view, Xinyuan still has a strong controlling shareholder from an equity perspective; however, from the board and operational rights perspective, Shen Yuanqing serves as both chairman, executive director, and CEO, and the company's annual report also discloses that the roles of chairman and CEO are not separated, which deviates from the corporate governance code C.2.1 of Hong Kong-listed companies. This means that while equity control lies with the major shareholder, operational and board execution rights are highly concentrated in management, which is the root of the conflict.

However, his aggressive means of seizing power have also led the company into a governance deadlock—regardless of how the Hong Kong court ultimately rules on the validity of the board's resolution, the ongoing internal strife has made it difficult for management to focus on daily operations and has caused potential investors to hesitate.

This is not a simple power transition, but the beginning of clearing existing risks. Whoever takes over the control will inherit that still hot potato