Country Garden extends sales slump as financial woes pile up

2 months ago 54

Updated

Apr 03, 2024, 08:58 AM

Published

Apr 03, 2024, 08:37 AM

SHANGHAI - Country Garden Holdings’ home sales tumbled in March from a year earlier, extending woes for the Chinese developer that’s already facing a wind-up petition and missed a deadline for releasing annual results.

Contracted sales for March plunged 83 per cent year on year to 4.3 billion yuan (S$818 million), following an 85 per cent annual slide in February, corporate filings show. Sales rebounded 16 per cent in March from February, traditionally a slower period with the Chinese New Year holiday.

The sales drought exacerbates the cash crunch for Country Garden, whose crisis entered a new chapter after it made a surprise announcement last week that it will miss a deadline for reporting annual results due to insufficient information. The stock has been suspended from trading in Hong Kong due to the delay. Earlier in 2024, a Hong Kong court received a creditor’s petition to wind up the company following its default on dollar debt.

China’s property sector so far has shown little hint of a turnaround. Private data showed March’s home sales extended a steep decline from a year earlier, and agencies do not expect a notable recovery in April. Property investment slumped 9 per cent in the first two months, more than expected.

Home buyers are avoiding defaulted developers on concerns about their ability to complete housing projects, including Country Garden, which was once China’s biggest developer by sales. Its closest rival, China Evergrande Group, was ordered to liquidate in January. Another giant, China Vanke, has also seen its sales slump worsen as it tries to stave off default.

Country Garden has been utilising the regulator’s latest property funding programme as the sales drought threatens its operational cash flow. It said 272 residential projects have been included by local aut...

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