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Troubled housing giant Country Garden announced late Thursday that it would delay the publication of its annual results, in the latest sign of the turmoil still coursing through China’s huge property sector.
In a filing provided to the Hong Kong stock exchange, the company said it needed more time to collect information due to the complexity of the work required amid its debt restructuring.
Country Garden’s inability to meet a deadline of March 31 to post earnings means its stock is likely to be suspended from trading Tuesday under Hong Kong’s stock exchange rules.
The market was closed on Friday for the Easter holiday and will reopen on Tuesday.
Country Garden, once China’s largest property developer, is reeling under about $194 billion worth of debt. It defaulted on its US dollar debt last year.
Last month, it received a liquidation petition in Hong Kong from a creditor for non-payment of a loan worth 1.6 billion Hong Kong dollars ($204 million), according to the company.
The Chinese property industry is “volatile,” which makes it harder for the company to operate, Country Garden said in the filing. Sales have plunged for the developer since last year. In February, contracted sales declined 85%, the biggest monthly drop in at least seven years.
It called on its creditors to be patient with the company, adding that it continues to deliver housing projects.
In 2023, the company and its joint ventures delivered over 600,000 housing units, covering 249 cities across the country, according to the filing.
Lurching from one crisis to another
Country Garden’s woes echo that of another huge, and now insolvent, Chinese property giant Evergrande.
It was a set of missed results from Evergrande back in 2021 and 2022 that first alerted investors to huge debts and stresses within China’s property sector, a moment that cascaded through multiple parts of the world’s second largest economy and continues to reverberate to this day.
Chinese regulators have since accused Evergrande and its founder of inflating revenues by $78 billion, putting the insolvent property developer at the heart of the country’s biggest ever financial fraud case.
Another property giant, China Vanke, is also in trouble. The Shenzhen-based company, which ranked No.2 in sales last year, reported a 46% plunge in profit for 2023 on Friday.
Earlier this month, Moody’s downgraded Vanke’s credit rating to “junk” status, citing its worsening liquidity conditions. State media reported the next day that 12 major banks, including the six largest state-owned lenders, had been in talks to provide an emergency loan to prevent the company from going the way of Evergrande and Country Garden.