Recently, HSBC downgraded Country Garden’s rating to low. HSBC assesses Country Garden’s cash flow would recover slowly, and financing-related problems may arise in the future.

Since the end of last year, Country Garden has taken various forms of self-rescue. Including slashing the annual salary of the company’s directors. Its founder’s new year salary is only 3% of the original yearly salary.

In addition, Country Garden made a sale price reduction per m2. In February of this year, the company reduced the selling price by 30% compared to 2018.

Moreover, Country Garden also intends to sell off high-quality assets, such as its 26% stake in the Guangzhou International Financial City project in Tianhe District, Guangzhou.

On September 16, Country Garden released its 2022 interim financial report. It showed that the net profit was $84.5 million (612 million yuan), a drop of 96% compared with the net profit in the same period last year.

According to China’s online media, Country Garden hid a large amount of off-balance sheet debt through trust financing.
On June 22, Moody’s downgraded Country Garden’s rating outlook from “under review” to “negative.”

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