Country Garden Holdings Co., China’s largest property developer, reported a first full-year loss since its 2007 listing in Hong Kong.
(Bloomberg) — Country Garden Holdings Co., China’s largest property developer, reported a first full-year loss since its 2007 listing in Hong Kong.
The Foshan-based company posted a net loss of about 6.1 billion yuan ($885 million) in 2022, compared with a profit of 27 billion yuan a year earlier. The developer warned of the loss earlier this month.
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The result underscores how a slump in China’s real estate sector is weighing on some of the strongest private builders that have avoided a default so far. Once considered a safer investment among developers, Country Garden has become a proxy for financial contagion in an industry that accounts for about a quarter of the country’s gross domestic product.
While early signs of a housing-market stabilization have finally emerged, the turnaround remains tenuous. A chunk of Country Garden’s land bank is in low-tier cities, which usually have higher inventory and weaker housing demand.
The developer may “lag behind peers in the sector’s sales recovery,” Bloomberg Intelligence property analysts Kristy Hung and Patrick Wong wrote in a preview before the earnings release. “This could cast a shadow on Country Garden’s 2023 earnings recovery.”
Revenue stood at 430 billion yuan, roughly in line with the 427 billion yuan estimate compiled by Bloomberg. Core net profit, which adjusts for items including property revaluation, reached 2.6 billion yuan.
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