No respite in sight for top Chinese developers as profits continue to slump

Major Chinese developers like China Overseas Land & Investment and Country Garden Holdings continue to report disappointing earnings, as the country’s property sector remains mired in a downturn despite a range of supportive measures.

State-backed China Overseas Land & Investment’s profit for 2024 plunged 40 per cent to 15.6 billion yuan (US$2.2 billion) while its total debt dropped 6 per cent to 241.6 billion yuan, according to a filing to the Hong Kong stock exchange on Monday. Revenue fell 9 per cent from a year earlier to 185.2 billion yuan.

The lower profit led to a reduced dividend payout of HK$0.60 (US$0.07) per share for 2024, compared with HK$0.80 a year earlier.

China’s property sector, which used to account for more than a quarter of the nation’s gross domestic product, has been troubled since authorities in late 2020 unveiled a campaign to deleverage real estate companies, which had relied on aggressive bank borrowings and debt financing to buy land and gain market share.

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Boom, bust and borrow: Has China’s housing market tanked?

Boom, bust and borrow: Has China’s housing market tanked?

Prices of new homes fell for the 21st straight month in February, dropping 5.2 per cent on an annual basis, while those of second-hand homes declined 7.5 per cent, according to data from the National Bureau of Statistics. The total value of new homes sold plummeted to 9.7 trillion yuan last year, a 43.6 per cent decrease compared with 2019 levels.

State-backed China Vanke, which has close to US$5 billion in bonds maturing this year, reported a net loss of 49.48 billion yuan for 2024, down from a 12 billion yuan net profit in 2023, according to a stock exchange filing on Monday.