Beijing [China], March 29 (ANI): Amid intensifying concerns over China’s property sector, troubled housing giant Country Garden has announced that it would delay the publication of its annual results, CNN reported.
In a filing provided to the Hong Kong stock exchange on Thursday, the company said it needed more time to collect information due to the complexity of the work required amid its debt restructuring.
If Country Garden is unable to meet a deadline of March 31 to post earnings its stock is likely to be suspended from trading Tuesday under Hong Kong’s stock exchange rules.
The market was closed on Friday for the Easter holiday and will reopen on Tuesday.
Country Garden, once China’s largest property developer, is reeling under about USD 194 billion worth of debt. It defaulted on its US dollar debt last year, CNN reported.
Last month, it received a liquidation petition in Hong Kong from a creditor for non-payment of a loan worth 1.6 billion Hong Kong dollars (USD 204 million), according to the company.
Country Garden said in the filing that the Chinese property industry is “volatile,” which makes it harder for the company to operate. Sales have plunged for the developer since last year. In February, contracted sales declined 85 per cent, the biggest monthly drop in at least seven years.
It called on its creditors to be patient with the company, adding that it continues to deliver housing projects.
In 2023, the company and its joint ventures delivered over 6,00,000 housing units, covering 249 cities across the country, according to the filing.
It is pertinent to note that Country Garden’s woes echo those of another huge, and now insolvent, Chinese property giant, Evergrande, according to CNN.
It was a set of missed results from Evergrande back in 2021 and 2022 that first alerted investors to huge debts and stresses within China’s property sector, a moment that cascaded through multiple parts of the world’s second largest economy and continues to reverberate to this day.
Evergrande has since been accused by Chinese regulators of inflating revenues by USD 78 billion, putting the insolvent property developer at the heart of the country’s biggest ever financial fraud case.
Meanwhile, China Vanke, another property giant, is also in trouble, CNN reported. The Shenzhen-based company, which ranked at number two in sales last year, reported a 46 per cent plunge in profit for 2023 on Friday.
Earlier this month, Moody’s downgraded Vanke’s credit rating to “junk” status, citing its worsening liquidity conditions. State media reported the next day that 12 major banks, including the six largest state-owned lenders, had been in talks to provide an emergency loan to prevent the company from going the way of Evergrande and Country Garden.
Beijing has been struggling to restore the country’s ailing real estate industry, which has not only undermined the confidence of homebuyers, businesses and investors, but also threatened the broader economy, as reported by CNN.
“We have cut our forecasts for China’s housing market, and now expect a 5-10 per cent fall in new home sales in 2024,” said Fitch Ratings in a report on Friday. It will be “challenging” for China to achieve its GDP growth target of around 5 per cent given the lingering property stress, it added. (ANI)
