Stock Market News

Chinese Property Giant Country Garden Warns of Profit Slump

2022.08.18 04:01

Chinese Property Giant Country Garden Warns of Profit Slump

By Ambar Warrick 

Investing.com– 

Chinese property developer Country Garden Holdings Company Ltd (HK:2007) said on Thursday that its profit for the first half of 2022 is expected to drop substantially amid a severe real estate downturn.

The firm, which is the sixth-largest property developer in China, said its net profit attributable to shareholders for the six months to June 30 is expected between 200 million yuan and 1 billion yuan ($29.5 million to $147.5 million), down from 15 billion yuan a year ago. 

Country Garden said in a statement to the Hong Kong Stock Exchange that the decline was largely due to a weakening real estate market in the mainland, which dented the revenue recognized on properties sold. 

The firm is making more provisions to prepare for impairments in its property projects. It also flagged continued headwinds from the COVID-19 pandemic, which has spurred a series of strict lockdowns across China this year. 

The firm said it will report its interim earnings in the second half of August. Excluding one-off items, such as provisions, Country Garden expects core net profit of 4.5 billion yuan to 5 billion yuan, down from 15.2 billion yuan last year. 

Country Garden’s warning comes amid an ongoing crisis in China’s real estate market, which has wiped out around $90 billion in stocks and bonds so far this year. Investment bank  JPMorgan warned that most real estate developers in the mainland are expected to see severe earnings declines, Bloomberg reported this week. 

Chinese house prices have crashed this year, with real estate developers facing mortgage boycotts from homeowners refusing to pay for unfinished projects. New home prices sank 0.9% in July from last year, their worst month since late-2015. 

While the real estate crisis came to light after a series of defaults by China Evergrande Group (HK:3333) last year, China’s zero-COVID policy, which ground the economy to a halt in 2022, has exacerbated the crisis. 

A bulk of China’s relief efforts have been aimed at homeowners, not developers, which has worsened the outlook for real estate firms. The country is reportedly planning on more bond issuances and guarantees to support the sector, but has not released any official word on the matter.

Slowing economic growth in China has also spurred a slew of stimulus measures, including a recent interest rate cut by the People’s Bank of China. 

 

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 76,792.57 1.05%
vested-xor
Vested XOR (VXOR) $ 3,405.08 99,999.99%
ethereum
Ethereum (ETH) $ 2,892.34 7.31%
tether
Tether (USDT) $ 1.00 0.23%
solana
Solana (SOL) $ 197.53 4.90%
bnb
BNB (BNB) $ 600.58 1.92%
usd-coin
USDC (USDC) $ 1.00 0.18%
xrp
XRP (XRP) $ 0.557235 3.16%
dogecoin
Dogecoin (DOGE) $ 0.193767 1.45%
staked-ether
Lido Staked Ether (STETH) $ 2,892.26 7.37%
cardano
Cardano (ADA) $ 0.397095 10.52%
tron
TRON (TRX) $ 0.160882 1.77%
the-open-network
Toncoin (TON) $ 4.94 4.27%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,417.93 7.20%
avalanche-2
Avalanche (AVAX) $ 27.68 4.05%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 76,570.52 1.14%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 0.83%
weth
WETH (WETH) $ 2,890.39 7.19%
chainlink
Chainlink (LINK) $ 12.64 5.31%
bitcoin-cash
Bitcoin Cash (BCH) $ 384.13 2.68%
sui
Sui (SUI) $ 2.34 2.12%
polkadot
Polkadot (DOT) $ 4.16 1.35%
leo-token
LEO Token (LEO) $ 6.26 0.06%
usds
USDS (USDS) $ 1.00 0.27%
uniswap
Uniswap (UNI) $ 9.07 2.90%
litecoin
Litecoin (LTC) $ 72.18 2.95%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,038.67 7.24%
near
NEAR Protocol (NEAR) $ 4.24 1.27%
aptos
Aptos (APT) $ 9.78 4.21%
pepe
Pepe (PEPE) $ 0.000011 11.48%
bittensor
Bittensor (TAO) $ 513.24 1.48%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.42 0.10%
internet-computer
Internet Computer (ICP) $ 7.78 0.27%
dai
Dai (DAI) $ 1.00 0.09%
monero
Monero (XMR) $ 168.10 2.68%
stellar
Stellar (XLM) $ 0.101898 5.40%
ethereum-classic
Ethereum Classic (ETC) $ 20.15 4.46%
kaspa
Kaspa (KAS) $ 0.117378 1.47%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.12%
whitebit
WhiteBIT Coin (WBT) $ 19.52 0.97%
aave
Aave (AAVE) $ 185.79 9.08%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.346319 4.72%
blockstack
Stacks (STX) $ 1.69 1.26%
crypto-com-chain
Cronos (CRO) $ 0.092382 8.80%
okb
OKB (OKB) $ 40.39 3.12%
dogwifcoin
dogwifhat (WIF) $ 2.39 0.36%
first-digital-usd
First Digital USD (FDUSD) $ 1.00 0.17%
mantle
Mantle (MNT) $ 0.696342 17.34%
arbitrum
Arbitrum (ARB) $ 0.583667 8.57%
filecoin
Filecoin (FIL) $ 3.78 3.12%