Citizens visit a property developer’s sales office in Ningbo, East China’s Zhejiang Province, on March 4, 2023. Photo: VCG
Industry insiders said that Country Garden, the Chinese property giant that suspended 11 domestic bonds on Saturday, won’t become “the second Evergrande,” stressing that the risks of Country Garden and other developers are controllable, as new policies are being introduced to boost confidence in the property industry.
On Saturday evening, Country Garden made several announcements on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, saying that its 11 domestic bonds would be suspended from the opening of the market on Monday, and the resumption time would be determined separately.
The balance of the 11 bonds was about 15.702 billion yuan ($2.18 billion), according to the announcements.
Country Garden said that it will hold a meeting of bondholders soon and will also consider debt management measures.
The real estate giant on Thursday issued a profit warning on the Hong Kong Stock Exchange and said that its first-half net loss would be 45 billion yuan to 55 billion yuan.
“The net loss is mainly due to the impact of declining sales in the real estate industry, resulting in a decrease in the gross margin of real estate business transactions and an increase in the impairment of property projects. The losses are also due to foreign exchange fluctuations,” said Country Garden in the announcements.
China’s property sales declined in the first half of 2023, with the total area sold decreasing by 5.3 percent year-on-year, according to data released by National Bureau of Statistics.
Analysts believed that Country Garden will not be “the second Evergrande.”
“The risks [for Country Garden] are controllable and optimized policies are being introduced to improve the development of the industry and boost confidence,” Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times.