By Clare Jim

HONG KONG (Reuters) – Country Garden (HK:), once China’s leading developer and currently facing a liquidation lawsuit, is expected to report heavy losses when it publishes long-term results on Tuesday, analysts said. – said, as a long-term crisis in the property sector weighed on sales.

Country Garden has delayed publishing its 2023 full-year and 2024 interim financial reports after defaulting on an $11 billion offshore bond due in late 2023. As a result, its Hong Kong shares were halted from trading. since April 2, 2024.

The accounts will be released later on Tuesday against the backdrop of property sales in China falling nearly 50% over the past three years as the industry recovers from an unprecedented debt crisis that began in 2021.

The release of overdue financial results will put the embattled developer on course to seek a resumption of trading from the Hong Kong Stock Exchange, possibly as soon as Wednesday.

The publication of overdue results and the resumption of stock trading are linked to Country Garden’s efforts to prevent a liquidation petition filed by a creditor in a Hong Kong court related to its non-payment of $205 million. debt.

Guangdong province-based Country Garden said last week it proposed to creditors a debt restructuring that would cut its $16.4 billion offshore debt by 70%, and it reached a you “understand” a group of lenders.

The next liquidation hearing will be held on January 20.

SHIPPING LOSSES

The expected loss at Country Garden follows two semi-annual losses since the second half of 2022.

It recorded a net loss of 48.9 billion yuan ($6.67 billion) in the six months ended June 2023, widening from a 6.7 billion yuan net loss in the second half of 2022. a 26.8 billion yuan net profit in 2021.

Country Garden’s annual sales by value fell more than 70% last year, sending its national ranking to No. 16 from No. 7 in 2023, according to a survey by real estate researcher CRIC, a sharp drop in a company that was previously in China. top developer through sales.

“The results will show losses for sure, the question is how big they are,” said Raymond (NS:) Cheng, head of China research at CGS International. “It will book a lot of provisions after going into default.”

Cheng said the market will scrutinize Country Garden’s debt levels in its financial statements, as well as its assets and cashflow because sales and property values ​​have both declined significantly during that period.

($1 = 7.3303 renminbi)