Country Garden posts first loss since listing

Country Garden Holdings, China’s largest property developer, reported a first full-year loss since its 2007 listing in Hong Kong, reports Bloomberg. The Foshan-based company posted a net loss of about RMB 6.1 billion ($885 million) in 2022, compared with a profit of RMB 27 billion a year earlier. The developer warned of the loss earlier this month.

The result underscores how a slump in China’s real estate sector is weighing on some of the strongest private builders that have avoided a default so far. Once considered a safer investment among developers, Country Garden has become a proxy for financial contagion in an industry that accounts for about a quarter of the country’s gross domestic product.  

While early signs of a housing-market stabilization have finally emerged, the turnaround remains tenuous. A chunk of Country Garden’s land bank is in low-tier cities, which usually have higher inventory and weaker housing demand.