More Warning Signs at Another Chinese Developer

Tianjin-headquartered Sunac is the latest major property developer to reportedly face troubles, with a letter to Chinese authorities asking for policy assistance.

Sunac China Holdings Ltd. asked authorities in Shaoxing – a city in the eastern coastal province of Zheijiang – to offer policy assistance due to operational difficulties, according to a report citing a letter from a subsidiary.

The letter did not elaborate on the type of assistance requested but said that it had never experienced such a radical change in the external environment, underlining a 60 percent year-on-year drop in home sales in Sunaac’s Shaoxing office.

The market is almost frozen, the letter said. The radical change in policy and environment has seriously disrupted our business and made it very difficult to maintain normal operations.

Year-to-date, Sunac’s Hong Kong-listed share price has more than halved to HK$13.44, as of publishing.

On Friday, Sunac’s dollar bonds slumped after the letter circulated in the market with its 5.95 percent bond due 2024 dropping 4.6 cents on the dollar to 85 cents – a record-low closing level.