Country Garden Services Shares Jump After Stock Buyback Plan

By Bingyan Wang

Shares of Country Garden Services Holdings jumped Wednesday after the company said it plans to buy back shares from the open market, signaling confidence in its growth prospects.

The Hong Kong-listed stock rose as much as 21% and was recently 18% higher at 9.93 Hong Kong dollars, paring year-to-date losses to 49%.

The property-management company on Tuesday said it will carry out the share repurchase in the open market at appropriate times after the release of first-half earnings.

"The share repurchase will demonstrate the group's confidence in its long-term business prospects...and be in the interest of the company and the shareholders," it said.

The buyback came amid renewed concerns about Chinese property developer Country Garden Holdings.

Prices of Country Garden's bonds have slumped back to distressed levels amid China's broader economic slowdown and as home sales run out of steam.

In a separate statement, Country Garden Services said its unaudited net cash generated from operating activity was at least 20.0 billion yuan ($2.79 billion).

Citi analysts said that the recent volatility in the property-management company's share price is due in part to "investor concerns on related-party overhang." However, low valuations and policy measures could help shares form a bottom, the analysts said in a note.

Citi has a buy rating on Country Garden Services, which it said shows "consistent efforts on cash flow, project quality upgrades and internal optimization."

Write to Bingyan Wang at bingyan.wang@wsj.com

(END) Dow Jones Newswires

August 01, 2023 23:55 ET (03:55 GMT)

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