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(Bloomberg) — Country Garden Holdings Co.’s (2007.HK) sales slump continued in February, as new home transactions saw only a tepid recovery across China and homebuyers shifted to state builders.

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Contracted sales dropped 38% from a year earlier to 2.3 billion yuan ($317 million), following a 59% year-on-year drop in January, Bloomberg calculations based on corporate filings show. Sales were little changed from the previous month.

China is trying to put a floor under the real estate meltdown amid weak domestic demand and a worsening job situation. While the housing sector has picked up modestly on the back of government support, improvements have mostly been in the resale market as buyers remain concerned about developers’ ability to finish projects on time.

Country Garden is counting on a turnaround in sales to secure broad support for its restructuring and fight off liquidation. The developer told a court that it expected to reach an agreement with creditors by the end of February, but has made little progress since January with a key group of creditors, Bloomberg reported last month.

Recently, the builder again engaged Houlihan Lokey Inc. (HLI) and China International Capital Corp. (601995.SS) as financial advisers on its offshore debt restructuring, Bloomberg reported, renewing ties with the two firms as it seeks to build creditor support for its debt plan.

Country Garden’s contracted sales this year could fall to the low levels seen in 2012 and 2013, Bloomberg Intelligence analysts Daniel Fan and Hui Yen Tay wrote in a recent note. While it made a “huge impairment provision” when posting a record loss of 178 billion yuan for 2023, further impairment is possible as it’s only written down about 11% of its inventory, they said.

Country Garden’s decline in home sales contrasts the 1.2% increase last month for the 100 biggest real estate companies tracked by China Real Estate Information Corp.

—With assistance from Foster Wong.

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