China’s top property developer expects first loss since 2007 flotation

theguardian.com:

China’s top property developer expects to record a loss in 2022 – its first since the company went public in 2007 – in another blow for the country’s embattled property sector.

In a filing to the Hong Kong stock exchange on Monday, Country Garden said that the losses for 2022 would amount to between 5.5bn yuan and 7.5bn yuan (£663.6m-£904.9m). In 2021 Country Garden’s profits reached 26.8bn yuan.

Country Garden blamed the downturn on the Covid-19 pandemic, unfavourable currency exchanges and the reorganisation of certain projects. It said that these problems were “mainly in non-cash nature” and that it remained confident about its performance in 2023.

Last year government regulations aimed at reining in speculation in the property sector, including limits on borrowing, caused a cash crunch for developers. As real estate companies ran out of money and harsh zero-Covid lockdowns prevented workers from leaving their homes, construction stalled on hundreds of housing projects. The crisis severely dented confidence in the sector, with homebuyers in 24 provinces participating in mortgage boycotts to protest against unfinished projects.

Annual sales for the top 100 real estate companies declined by 41% in 2022 and more than 70 companies have issued profit warnings.

On Monday, Li Qiang, China’s new premier, gave his first public address in the role. He sought to boost confidence in China’s economy and said: “The environment for the private economy would get better and better.”

At this year’s National People’s Congress, China’s annual parliamentary session, the president, Xi Jinping, oversaw an overhaul of government agencies, particularly financial regulators, aimed at giving the party more oversight and control. The government wants