Country Garden shares suspended from Hong Kong stock exchange

By Louis Goss

China's largest property developer, Country Garden, on Monday said it had opted to suspend trading of its shares on the Hong Kong stock exchange after delaying publication of its 2023 results as it continues to grapple with the slump in the Chinese real estate market.

The heavily-indebted property developer said it had decided to suspend trading of its shares in order to comply with Hong Kong stock market's listing rules, which require it to either publish its unaudited financial statements in their current form or halt trading of its shares instead.

In a statement, Country garden (HK:2007) said it had asked to suspend trading of its shares on the stock market from 9:00 am on April 2 while it collects additional information to ensure its financial statements are accurate in the face of volatility in China's property sector.

The company last week said it would be delaying publication of its results in order to "collect more information to make appropriate accounting estimates" and ensure its statements "reasonably reflect changes in the industry" in the face of "continuous volatility."

"Due to the continuous volatility of the industry, the operating environment the Group [is] confronting is becoming increasingly complex," Country Garden said in a filing to Hong Kong Stock Exchange.

Trading of Country Garden shares is set to resume when the company publishes its financial statements for the full-year 2023. The company said it is now aiming to publish its results as soon as possible, without giving a deadline, as it works with auditor PwC.

Analysts polled by S&P Global Market Intelligence had predicted Country Garden would see a major widening of its losses to -Yen44.80 billion ($6.21 billion) for the full-year 2023, compared to the -Yen6.05 billion loss it posted for the full-year 2022.

Country Garden has over the previous year become one of the most high-profile casualties of the slump in China's property market that has left a raft of the country's top real estate companies unable to pay their international debts.

China's property market slump started in 2021 when the Chinese government introduced new rules aimed at reining in heavily indebted property developers by imposing new restrictions on their debt levels, which in turn left them unable to complete pre-sold homes.

In October, the Guangdong headquartered company said declining sales had left it unable to make a HK$470 million ($60 million) interest repayment and it warned "adverse market conditions" could leave it unable to pay its international debts in future.

Country Garden, which was founded by Yang Guoqiang in 1992 who became a billionaire, had $192 billion worth of debt at the end of June 2023, making it one of China's most heavily indebted property companies, alongside Evergrande which owes more than $300 billion.

-Louis Goss

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04-02-24 0446ET

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