Â
>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<
Â
Â
After JPMorgan downgraded the rating of Country Garden and its affiliate Country Garden Services on July 23, the two companies appeared to have been facing even greater headwinds over the past few weeks, with market news suggesting Country Garden missed the coupon payments of two US dollar bonds, leading to escalating default risks, the bank said in a note.
Taking into account the protracted weakness in property sales, there are mounting risks on potential default and non-performing debt conversion or restructuring, JPMorgan said.
Given the risk of a potential trading halt in the case of failing to publish interim results, the ratings on Country Garden and Country Garden Services are downgraded to Underweight, with their target prices cut from HK$0.9 and HK$6.7 to HK$0.8 and HK$5.9, respectively.
JPMorgan continues to favor state-owned developers with consistent market share gains, including China Resources Land, Poly Real Estate, Poly Property Services, China Overseas Land & Investment, and China Overseas Property.
On July 23, JPMorgan had slashed the target price of Country Garden to HK$0.9 from HK$2.3 and Country Garden Services to HK$6.7 from HK$22.