In the first five months of the year, Poly Property sold properties worth about 21 billion yuan, 37 per cent lower than it recorded in the same period of 2023.
The decline in Poly Property’s monthly sales stood in contrast with an improvement in the turnover of China Vanke and Country Garden, two of China’s biggest home builders.
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Tiny flat with bed behind toilet rented for US$40 in China
Tiny flat with bed behind toilet rented for US$40 in China
Both saw an increase of about 11 per cent in their property sales in May compared to April in the wake of the stimulus package unveiled by Beijing in the same month. The measures included a 300 billion yuan relending facility and cuts in mortgage rates.
“The full impact of the rescue package will take time, and in the meantime it’s normal that there will be hiccups,” said Louis Tse Ming-kwong, an independent equity analyst.
Nevertheless, Tse noted other positive developments in China’s property sector.
One is that China Vanke has paid the outstanding principal and interest on a US$600 million medium-term note issued by subsidiary Vanke Real Estate (Hong Kong) that is due on June 7, according to its filing with the exchange on Wednesday.
China Vanke had 1.1 trillion yuan of total liabilities as of March 31, according to its latest financial report. The amount included 248 billion yuan in bank loans and borrowings and 74.2 billion yuan in outstanding bonds. The developer posted a net loss of 362 million yuan in the first quarter of this year.
Meanwhile, Country Garden was given a reprieve when the Hong Kong High Court ordered a further adjournment of a liquidation petition against it, from June 11 to July 29.
The developer, once China’s largest home builder, said it was looking to dispose of an undisclosed stake in chip company ChangXin Memory Technologies (CXMT) via Country Garden Venture Capital.
The venture capital arm holds a 1.68 per cent stake in CXMT, which raised 10.8 billion yuan in a round of fundraising in March, pushing its valuation close to 140 billion yuan.
“This is positive news for China’s property sector and it shows the central government’s determination to shore up the shattered confidence in the property market,” Tse said.
“China Vanke raised enough money to pay some of its debts, while the additional time given to Country Garden could mean that something is cooking in regards to restructuring its debts.”