The sell-offs in US dollar bonds issued by Chinese property developers deepen this week amid growing concerns about financial health of the sector. Notably, bonds issued by developers widely viewed as financially healthy such as Country Garden, CIFI Holdings, Sinic Holdings also tumbled across the board.
Demand for residential properties in China declined in 2021 and will continue falling through 2035 as the demographic dividend wanes, according to Beike Research Institute.
Several Chinese banks scramble to disclose their exposures to mortgage defaults and stressed the risks are “controllable,” after homebuyers across 18 Chinese provinces refuse to pay mortgages as the properties they bought were left unfinished due to developers’ liquidity difficulties.
China’s Tianqi Lithium, one of the world’s largest lithium chemical producers, expects its first-half net profit attributable to shareholders to reach 9.6 – 11.6 billion yuan, skyrocketing 110 – 134 times from the same period last year, the firm said on Thursday.
China’s Ministry of Housing and Urban-Rural Development, financial regulators and banks held an emergency meeting this week to discuss the issue of suspended mortgage payments, as more and more homebuyers in China refused to pay mortgages on unfinished projects, Bloomberg News reported cited people with the knowledge of the matter.
Agricultural Bank of China, one the country’s Big Four state-owned lender, said that it initially recognized 660 million yuan in overdue mortgage balance involving property projects with risks of delayed home delivery.
China Construction Bank, one of the country’s Big Four state-owned lenders, said on Thursday that its exposure to property projects whose construction has been suspended and home deliveries delayed is relatively small and the overall risk is controllable.
Embattled property developer China Evergrande Group’s carmaking unit is reportedly selling its first electric vehicle below cost price to boost sales, reported newspaper International Finance News under the state-run People’s Daily.
Jefferies maintains a Buy rating for Tencent Holdings and slightly cut its stock price target to HK$491 from HK$500, according to a note on Thursday.
Tencent Holding’s total revenue for the second quarter of 2022 is expected to drop by 3% from a year earlier to 134.8 billion yuan and its adjusted net profit may have slumped by 26% year over year to 25.1 billion yuan.
