【Epoch Times June 6, 2024】 – China’s real estate giant Country Garden has been experiencing a continuous decline in performance since the “explosion,” with a decrease of over 80% in shareholder equity sales in the first five months of this year compared to the same period last year. The chairman of the board of directors, Yang Huiyan, previously stated that her family would support the company’s development even if it meant “selling the pot and the iron.”
According to a report from Finance and Economics Web on June 5, Country Garden released unaudited operational data for May. In May, Country Garden achieved a shareholder equity sales of 4.29 billion yuan, a 76.43% drop from the previous year’s 18.2 billion yuan; the sales area was 440,000 square meters, a decrease of 80.53% from the previous year’s 2.26 million square meters.
Based on earlier data, Country Garden achieved a shareholder equity sales of 13.51 billion yuan in the first four months, with a sales area of 1.38 million square meters.
Thus, the accumulated shareholder equity sales from January to May totaled 17.8 billion yuan, a decrease of 84.21% from the previous year’s 112.76 billion yuan; the accumulated sales area was 1.82 million square meters, down by 87.59% from the previous year’s 14.67 million square meters.
Currently, Country Garden has not yet released its 2023 annual report, citing the continuous industry fluctuations and complexity of the operating environment as reasons for needing more information to make appropriate accounting estimates and judgments. Due to these reasons, the company anticipates a delay in the disclosure of the 2023 annual report.
Facing declining sales, Country Garden is actively disposing of its assets. According to news from Observer, Country Garden is seeking to sell its shares in Changxin Storage Technology Co., Ltd., raising approximately 2 billion yuan.
Country Garden stated that the company is actively considering various strategies to optimize its asset-liability structure, including conducting a careful assessment of the asset portfolio and exploring potential asset disposal opportunities.
As of the end of last year, Country Garden’s total liabilities were approximately 1.36 trillion yuan, ranking second only to Evergrande’s 2.38 trillion yuan among a group of real estate companies.
The slow sales recovery has also affected the progress of Country Garden’s debt restructuring.
According to reports from The Paper, Country Garden plans to delay the payment of interest or principal on three bonds until September, which were initially due before that month. Country Garden previously stated that due to underperformance in sales recovery and pressures on fund allocation, funds have not been fully available, but they will make every effort to raise funds.
In addition, the minor extensions for the “21Bi Di 01” and “21Bi Di 02” that were supposed to be paid in April and July will be paid within the grace period. On May 28, several bondholders told The Paper that they had received payments for “21Bi Di 01.”
On May 9, Country Garden Real Estate Group Co., Ltd., a subsidiary of Country Garden, announced its efforts to pay the interest on “23Bi Gui Yuan MTN002” and “23Bi Gui Yuan MTN001” within three working days of the grace period. Country Garden attributed the delayed payment to the increasingly complex and severe operating environment due to ongoing industry fluctuations, challenges in fund allocation, and unsatisfactory sales recovery.
In fact, not only has Country Garden seen a significant drop in sales in the first five months, but the sales performance of China’s top 100 real estate companies has also declined.
According to data released by the third-party consulting firm Kerui on May 31, China’s top 100 real estate companies achieved a sales volume of 322.41 billion yuan in May, a 33.6% decrease compared to the same period last year, with the monthly performance continuing to remain at historically low levels. Looking at the cumulative performance, the sales volume of the top 100 real estate companies in the first five months was 1,413.37 billion yuan, a 44.3% decrease year-on-year.
In addition to the decline in sales performance, Chinese real estate companies are facing significant debt repayment pressure. According to the China Index Research Institute, in 2024, the total amount of bonds due for real estate companies amounts to 770.31 billion yuan, a 19.6% decrease compared to the previous year’s balance but still at relatively high levels overall.