One of China’s biggest developers has said the country’s property market has plunged into a deep recession, using some of the strongest terms yet to be explained. annual recession and the economic pain it caused.
For years, it was ranked as China’s top property developer by contract sales.
The Guangdong-based company said the market was suffering from weakening expectations, weak demand and falling property prices.
“All of this puts pressure on all participants in the property market, which is rapidly slipping into a deep recession,” the firm said. The resurgence of Covid-19 in cities across China has also slowed construction activity, weighing on its performance, he added.
Country Garden posted a modest profit of $89 million, compared with $2.2 billion in the first half of 2021.
The company has long been considered one of China’s most financially strong developers, but like many of its peers, the lack of confidence that has driven home buyers and investors away from the Chinese real estate market. are struggling to overcome the crisis of
Despite repeated attempts to convince the market that Country Garden can withstand the crisis, the company’s stock and dollar-denominated bond prices have plunged this year. He was one of the few developers selected by the company recently. Sale of government-guaranteed domestic bonds under a new pilot program.
Over 30 Chinese real estate companies, including
and Sunac China Holdings Ltd. have already defaulted on their international debt. This month, a number of independent developers issued profit warnings. Some expect net income to fall by 90% or more, while others expect to post a loss.
another Chinese developer last week reported a 29% drop in net profit, saying the fall in real estate in the first half of the year came amid a lingering Covid pandemic with “a profound change not seen in a century.” .
“The property market is going through a brutal and drastic transformation process,” the Guangdong-based company said, adding that it “will move forward in a tough way.”
China’s declining property bubble has spilled over into other sectors such as: Private banks in each country And it is the largest state-owned asset manager that specializes in managing troubled loan and bad debt portfolios.
It is the largest bad debt management company in the United States.
The company said that the Chinese government has implemented pandemic measures, try to stabilize the economy.
China Huarong Asset Management Co., Cinda’s peer, reported a net loss of $2.7 billion in the first half. The company, which is partly owned by China’s Ministry of Finance, described the country’s economic situation as “extremely complex and difficult.”
Huarong’s International Finance Division independently forecast that China will face various challenges in the second half, including pressure on investment, consumer spending and export trade.
Country Garden on Tuesday expressed optimism about the future. China’s economy is resilient and poised for long-term growth, he said, adding that the country’s urbanization is still underway. “The real estate industry will always exist,” the company added.
Chairman Mo Binh apologized to investors for the plummeting profits at an earnings briefing. Mo said the company will continue to adjust its strategy and focus on balancing cash flow, assets and liabilities and earnings. He predicted that China’s property market will return to a healthy development stage by next June.
write destination Rebecca Fenn [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8