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Country Garden Sales Slump Abates After China Property Stimulus

(Bloomberg)

(Bloomberg) -- Chinese builder Country Garden Holdings Co.’s sales slump moderated in October, a sign of improving industry prospects following China’s stimulus blitz that include measures for property developers. 

Contracted sales for October declined 31% from a year earlier to 4.3 billion yuan ($610 million), according to corporate filings. That narrowed from a 41% on-year drop in September. Its October sales also gained 20% from the September total.

In September, China began introducing a series of measures to jumpstart the economy and property sector, including cutting borrowing costs and relaxing buying curbs in big cities and downpayment requirements. Improving sales at the distressed company — once China’s largest builder by contracted sales — may temporarily soothe investor concerns over its liquidity given that it’s counting on more transactions to fight off liquidation.

A creditor filed a petition against Country Garden in February after the builder defaulted on dollar debt a year ago. The company is in talks with creditors for a debt overhaul. But it has already missed a self-imposed target date for getting key creditor support for terms of its restructuring plan, Bloomberg reported last month. 

Its wind-up hearing in Hong Kong has been adjourned until late January. 

The Foshan-based developer still lags peers in sales. The value of new-home sales from the 100 biggest real estate companies in October rose 7.1% from a year earlier to 435.5 billion yuan, reversing from a 37.7% slump in September, according to preliminary data from China Real Estate Information Corp. 

©2024 Bloomberg L.P.