Country Garden Holdings Company Limited – China’s largest private housing company – announced on April 4 that they underwent a slump in contracted sales of properties in March.
The contracted sales attributable to the shareholders’ equity was recorded at about 30.11 billion yuan (4.7 billion dollars) last month, down 42.9% from 52.69 billion yuan (8.3 billion dollars) reported for March 2021.
The contracted sales of floor area fell 34.85% to 3.87 million square meters compared to the same period last year.
Also, on April 4, Fitch Ratings affirmed Country Garden Holdings’ ratings at “BBB -” but revised the developer’s outlook from “stable” to “negative.”
The rating agency said that the revision reflects a downward trend of contracted sales and sales collection since the third quarter of 2021, as well as a declining profit margin of the sector.
According to Fitch Ratings, Country Garden Holdings has been able to access the capital market, but uncertainties are compounded by the difficult funding access and operating environment of the industry.
Country Garden Holdings’ leverage rate is higher than that of most investment-grade counterparts.
Some developers also announced the same pattern as Country Garden Holdings.
Modern Land (China) Co. reported its contracted sales down 86.84% in March, and Gemdale Properties and Investment Corporation saw a decrease of 37.11%. Their contracted sales of floor area dropped 81.94% and 35.84%, respectively.