Placing Country Garden Holdings Under Review Given Delay in 2023 Results Publication

We are placing Country Garden Holdings, or CGH, under review, given the company’s announcement regarding a delay in the publication of its 2023 annual results. The company clarified that it is still in the process of collecting the necessary information to make appropriate accounting estimates and is assessing the current financial resources and obligations. As no financial information was published by March 31, 2024, the Hong Kong Stock Exchange will suspend trading in CGH’s shares on April 2, 2024. In addition, CGH said that domestic housing delivery and offshore debt restructuring are underway, and it is working with creditors to formulate practicable solutions. Given an over 80% year-on-year sales decline for CGH for the year to February 2024, we think the company’s future remains highly uncertain, and its restructuring may not yield any positive outcome. Consequently, our fair value estimate of HKD 0.50 per share is under review, and we will revisit our valuation, key assumptions, and Morningstar Uncertainty Rating once the company updates its financial performance for 2023.