Chinese real estate developer Country Garden Holdings Co. has vowed to “do all it can to save itself” after issuing a loss warning and suffering yet another downgrade. The company is hoping to boost sentiment with these slogans as shares in the company continue to decline.
On Thursday evening, Country Garden announced to the Hong Kong Stock Exchange that it anticipates a net loss of approximately 45 billion to 55 billion yuan ($6.25 billion to $7.62 billion) in the first half of this year. This would be a significant decrease from the net loss of about 45 billion to 55 billion yuan in the same period last year. The company’s planned loss for the first half of this year is largely due to declining sales in the real estate industry and the resulting decrease in carryover gross profit margin and increase in property project impairments. Additionally, the company expects a net exchange loss caused by foreign exchange fluctuations.
This anticipated loss would be the first interim loss for Country Garden since its listing in Hong Kong 16 years ago. As a result, Country Garden shares fell as much as 14 percent during Hong Kong trading hours, contributing to a difficult week that saw the stock drop 31 percent.
The difficulties faced by Country Garden have raised concerns about the overall health of China’s debt-ridden real estate sector. There are fears that this could have wider implications for the broader market.
Amid reports that Country Garden missed bond interest payments on time earlier this week, the company’s situation has continued to worsen. These missed payments have further eroded investor confidence in the company.
Observers are closely monitoring the situation, highlighting the potential ripple effects that could occur within the real estate sector and the broader market as a result of Country Garden’s difficulties.
(This article is translated from MarketWatch. MarketWatch is operated by Dow Jones, the parent company of The Wall Street Journal, but MarketWatch is independent of Dow Jones Newswires and The Wall Street Journal.)