(Bloomberg) — Embattled Chinese developers, including Sunac China Holdings Ltd. and Shimao Group Holdings Ltd., were among stocks that were suspended Friday after missing a deadline to report annual results.
Recent Covid outbreaks coupled with auditor changes are forcing dozens of Hong Kong-listed firms to postpone their earnings. Meanwhile, China’s home sales slump deepened in March, keeping pressure on cash-strapped builders even as policy makers vow to support the property market.
A gauge of property stocks slid as much as 1.4%, while Chinese high-yield dollar bonds were 1 to 2 cents lower on the dollar Friday morning.
Key Developments:
- China Top 100 Developers See March Sales Down 52.7% Y/y: CRIC
- China Aoyuan Says Unable to Publish 2021 Annual Results
- Shimao Won’t Publish 2021 Unaudited Annual Results Due to Covid
- CIFI Prices HK$1.96b 6.95% Convertible Bonds Due 2025
- China Junk USD Bonds Add to Gains After Country Garden Results
- Chinese Builder Result Delays Raise Downgrade Pressure: Fitch
- China Property SOEs’ Bond Sales Soar as Private Peers Struggle
China Home Sales Slump Worsens (1:12 p.m. HK)
China’s home sales slump deepened in March, keeping pressure on cash-strapped developers even as policy makers vow to support the property market.
The 100 biggest companies in China’s debt-ridden property industry saw a 53% drop in sales from a year earlier, according to preliminary data from China Real Estate Information Corp. That’s the steepest decline this year.
The enduring downturn contrasts with a two-week rebound in developers’ stocks and dollar bonds after Chinese officials reiterated a pledge to prevent a disorderly collapse in the property market. Regulators have eased their clampdown on leverage in the industry by urging banks to boost lending to builders and cut mortgage down payments for homebuyers.
E-House Seeks to Exchange USD Notes (11:55 a.m. HK)
Chinese real-estate services firm E-House is proposing to exchange two dollar bonds, one of which matures later this month, warning it may not have sufficient funds to repay holders, according to a filing to the Hong Kong stock exchange.
China High-Yield Dollar Bonds 1-2 Cents Lower (10:35 a.m. HK)
Chinese high-yield dollar bonds were 1 to 2 cents lower on the dollar Friday morning, according to credit traders, after having risen 10 of the prior 11 days according to a Bloomberg index tracking the sector.
Loomis Voices Frustration Over China Property Debt Restructuring (9:07 a.m. HK)
The slow and opaque nature of debt restructuring at Chinese property developers is causing frustration and aggravating concern about the country’s corporate governance, according to Loomis, Sayles & Co.
“We’re hearing a lot of reasons: it has to do with local authorities, it has to do with Covid, but it’s definitely been a much slower process on any type of restructuring discussions than we would expect,” said Elaine Stokes, a fund manager at the Boston-based firm. “It feels like it’s at a standstill.”
Stokes’ comments highlight the unease among many international investors caught up in a record wave of bond defaults by Chinese real-estate firms, with billions of dollars at stake and limited power to negotiate. The lack of transparency about the magnitude of financial stress at some of the developers and over the state-guided debt workout process are added uncertainties.
Stressed China Builders Face $11 Billion of Bond, Trust Payments (9:02 a.m. HK)
Stressed developers face at least $3.1 billion of payments on dollar and onshore public bonds, according to data compiled by Bloomberg, a pullback from the previous month’s level. In addition, the sector has 53.6 billion yuan ($8.45 billion) of trust payments due in April, according to data tracker Use Trust.
China’s property sector faces another robust month of bond and trust obligations, after March saw further signals of investor concern about builders’ repayment capabilities.
Guangzhou R&F, Agile Group Indicate Debt Levels (8:30 a.m. HK)
Guangzhou R&F Properties Co.’s end-2021 net debt-to-equity ratio fell to 123.3% from 130.2% a year earlier, the Chinese developer said in its unaudited annual results statement.
Agile Group’s end-2021 gearing ratio also fell to 50.8% from 61% year earlier.
Shimao Won’t Publish 2021 Unaudited Annual Results Due to Covid (6:30 p.m. HK)
Shimao Group is not in a position to publish its unaudited 2021 annual results on Thursday due to the latest Covid outbreak, which led to the lockdown of its headquarters in Shanghai, it said in a filing to HKEX late Thursday.
Trading in shares will be suspended with effect from 9 a.m. local time on Friday; board meeting will be postponed.
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