More Warning Signs at Another Chinese Developer
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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.
Questions & Answers
Q.What evidence did Sunac provide to highlight their operational difficulties?
What evidence did Sunac provide to highlight their operational difficulties?
Sunac's letter stated a 60 percent year-on-year drop in home sales from its Shaoxing office, indicating an almost frozen market. They also cited a radical change in the external environment as seriously disrupting their business operations.
Q.How has Sunac's financial performance been affected by these issues?
How has Sunac's financial performance been affected by these issues?
Sunac's Hong Kong-listed share price has more than halved year-to-date, falling to HK$13.44. Also, their dollar bonds slumped, with the 5.95 percent bond due 2024 dropping to a record-low closing level of 85 cents on the dollar.
Reader pulse
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