Trading in Country Garden suspended in Hong Kong
Several major property companies, including Evergrande and Country Garden, have defaulted on their debts in recent years. Given that the real estate sector accounts for around a third of China’s economy
Country Garden has recently suspended trade in its shares on the Hong Kong Stock Exchange. The reason behind this suspension is the delay in the publication of its annual financial results. The company stated that it needed more time to collect information as it undergoes a process of debt restructuring1.
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Country Garden - Key Points
- Financial Challenges: Country Garden is facing financial difficulties, having defaulted on its overseas debt last year. Additionally, it is dealing with a winding-up petition1. This petition was filed by Ever Credit Ltd, a unit of Kingboard Holdings, which is a laminates maker and property investor.
- Operating Environment: The company acknowledges the volatility in the real estate industry and the increasingly complex operating environment it faces.
- Industry Context: The broader Chinese real estate industry has been under significant pressure since 2021 due to government measures aimed at curbing excessive borrowing by large developers. Several major property companies, including Evergrande and Country Garden, have defaulted on their debts in recent years. Given that the real estate sector accounts for around a third of China’s economy, these challenges have far-reaching implications1.
- China Vanke: On the same day, shares in another Chinese state-backed property developer, China Vanke, fell to a record low. China Vanke reported a more than 50% decline in its annual profit and announced plans to reduce debt over the next two years.
- Government Measures: In response to the real estate crisis, the Chinese government has implemented various measures to boost housing demand. However, the challenges persist, impacting both developers and the overall economy.
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Editorial
It’s important to keep an eye on developments, especially as the first hearing for Country Garden’s winding-up petition approaches on May 171. The situation reflects broader trends in China’s property market and its economic impact.