Facing the sluggish real estate market, the Chinese Communist Party has spared no effort from the central to local levels, but the results have been minimal. In July, Country Garden’s sales totaled about 34.1 billion yuan (RMB), a staggering 72% decrease compared to the same period last year.
On the evening of August 5th, Country Garden (02007.HK) released unaudited operating data showing that in July, the total contract sales attributable to the company’s shareholders amounted to about 34.1 billion yuan, a 72% decrease year-on-year; the contract sales area attributable to the company’s shareholders was approximately 380,000 square meters, plummeting by 76% compared to the same period last year.
In July 2023, Country Garden’s contract sales amounted to about 120.7 billion yuan, with a sales area of around 1.58 million square meters.
According to previous announcements, in the first half of this year, Country Garden’s equity contract sales amounted to 25.95 billion yuan, an 80% decrease year-on-year; the sales area was 2.647 million square meters, down by 86% compared to the same period last year. In the first half of 2023, Country Garden’s contract sales were about 128.8 billion yuan, with a sales area of about 18.931 million square meters.
Based on these calculations, in the first seven months of this year, the company’s equity sales amounted to 29.36 billion yuan, with a sales area of 3.027 million square meters.
At the monthly meeting of Country Garden Group held on August 2nd, Chairman Yang Huiyan stated that ensuring on-schedule delivery of properties and actively managing the balance sheet are the company’s two core goals, and the delivery tasks for the second half of the year remain daunting.
In response to recent supportive policies introduced at the government level, Country Garden stated that market recovery still requires time.
Country Garden defaulted on its US dollar bonds in October last year. Hengxin Limited, a subsidiary of Hong Kong-listed Jian Tao Holdings, filed a winding-up petition to the court in February this year due to Country Garden’s default on a $205 million loan. The winding-up hearing has been postponed again to January 20th next year.
Currently, Country Garden’s stock remains suspended from trading.
On June 24th, Country Garden received a resumption guidance from the Hong Kong Stock Exchange instructing the company to publish all outstanding financial performance results according to listing rules and address any audit revisions; to prove compliance with listing rule 13.24 (i.e., the company’s business has sufficient operational levels and asset values to support its operations); and simultaneously disclose all significant data to allow shareholders and other investors to assess the company’s situation.
The Stock Exchange pointed out that Country Garden must meet the resumption guidance, remedy matters that led to the trading suspension, and fully comply with listing rules to convince the Exchange before being allowed to resume trading.
According to listing rules, the Exchange may delist securities that have been suspended from trading for 18 consecutive months. For Country Garden, this deadline will be reached on October 1, 2025.