🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

China developer Sunac shares plunge to 11-year low after year-long suspension ends

Published 04/12/2023, 10:34 PM
Updated 04/13/2023, 05:55 AM
© Reuters. FILE PHOTO: An advertisement of property developer Sunac China Holdings is seen at a residential complex in Shanghai, China March 25, 2018. Picture taken March 25, 2018.  REUTERS/Stringer
USD/CNY
-

HONG KONG (Reuters) -Chinese property developer Sunac China Holdings Ltd lost more than half its market value on Thursday after resuming trade following a suspension of more than a year, having released results and agreed a debt restructuring.

The share slump came a day after the company said in a statement to the Hong Kong stock exchange that it was to resume trading and was implementing a debt restructuring plan.

Shares fell nearly 60% to as low as HK$1.86, their lowest since January 2012 , and ended the day at HK$2.04, still down 55.5% - erasing HK$13.84 billion ($1.8 billion) from the group's market value.

"The stock was catching up with the decline in the property sector during the year of suspension," said Steven Leung, a sales director at UOB Kay Hian. 

"It's a good sign that the company could resume trading as it suggested that the company is able to meet the required criteria for a trading resumption," he added.

Sunac is among many Chinese developers that defaulted last year as the property sector reeled under a debt crisis.

Over the last two years, property firms in China have struggled to sell new homes or have sold them at lower prices than expected. Beijing began rolling out supportive policies late last year as a result.

Sunac said in late March it had reached agreements with a group of offshore creditors to convert its debt into new notes and convertible bonds backed by its Hong Kong-listed shares and shares in its property management unit Sunac Services.

Sunac published its overdue 2022 interim results last month, showing a core loss of 11.06 billion yuan ($1.61 billion).

The property industry faces an uneven recovery, with some developers like Sunac and China Evergrande Group striking debt restructuring deals, while others face delisting, said Yan Yuejin, an analyst at the E-house China Research and Development Institution in Shanghai.

Earlier this month, the Hong Kong stock exchange canceled the listing of Chinese developer Cinic Holdings after it failed to meet trading resumption requirements in the time allotted.

Sunac said in a statement after the market closed that Chi Xun and Shang Yu had tendered their resignations as executive directors, effective April 13, due to "work duties and responsibilities rearrangement within the group".

There were no other matters related to the resignations that "need to be brought to the attention" of shareholders, the company said.

© Reuters. FILE PHOTO: An advertisement of property developer Sunac China Holdings is seen at a residential complex in Shanghai, China March 25, 2018. Picture taken March 25, 2018.  REUTERS/Stringer

($1 = 6.8730 Chinese yuan)

($1 = 7.8498 Hong Kong dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.