✨ 3 Jan 2022 | Value Investing Substack NEWS
JPMorgan 1Q22 Guide to the Markets, China Property sector spirals downwards, Turkey inflation soars to 36%, ex-Senate Majority Leader Harry Reid dies, SemiAnalysis & Doug O' Laughlin new joint podcast
SUBSTACKS + BLOGS + TWITTER
In reverse chronological order:
Sunac Services Ends First Service Stake Purchase (5:57 p.m. HK)
Sunac Services’ agreement to buy a stake in First Service has been terminated as no formal deal has been entered into on or before Dec. 31, Sunac Services said in Hong Kong stock exchange filing.
Evergrande December Sales Fell 99% (12:04 p.m. HK)
Evergrande records a 99% decline in sales year on year, the steepest among 31 listed developers tracked by Citigroup analysts, and a 7% drop versus November.
December sales overall were not as bad as feared, Citi analysts including Griffin Chan write in Sunday note, with weighted average for 31 developers down 26% from a year earlier, and up 23% from November.
Evergrande Told to Dismantle Illegal Buildings in Hainan: Report (9:48 a.m. HK)
The government of Danzhou, a prefecture-level city in the southern Chinese province of Hainan, has asked Evergrande to tear down 39 illegal buildings in ten days, Cailian reported on Sunday, citing a document from the local government.
The report cited the document, which was dated Dec. 30, as saying that the Danzhou government said an illegally obtained permit for the buildings had been revoked so the buildings need to be dismantled.
Evergrande didn’t immediately respond to a request seeking comment and calls to Danzhou authorities went unanswered on a public holiday in China on Monday.
Shimao Shares Drop to Lowest Since 2009 Amid Persistent Liquidity Risks (9:50 a.m. HK)
Shares in Shimao Group Holdings dropped 5.9% to the lowest since March 2009 after the property company missed its targets.
“Risks to Shimao’s liquidity could extend into 2022 as a parade of unfavorable media headlines threatens to keep potential buyers at a distance,” Bloomberg Intelligence analyst Kristy Hung wrote in a note on Monday.
The company missed its lowered, 290 billion-yuan sales guidance for 2021 by 7%, with December’s sales tumbling 68% year-over-year and by 25% sequentially, to 12 billion yuan, according to China Real Estate Information Corp.’s preliminary data.
Evergrande Suspends Trading in Hong Kong (8:58 a.m. HK)
The company gave no reason for the trading suspension.
China Evergrande on Friday dialed back payment plans on billions of dollars of overdue wealth management products as its liquidity crisis showed little sign of easing.
Developer Cifi Offers to Purchase Outstanding 5.5% 2022 Bond (7:52 a.m. HK)
Cifi Holdings offered to buy the outstanding notes at $1,000.5 for each $1,000 in principal amount plus accrued and unpaid interest, it said in a statement to the Hong Kong stock exchange.
The Chinese developer will determine the aggregate principal amount of notes that it will accept for purchase. The offer to buy the $505.1 million of notes that remain outstanding will expire at 4pm London time on Jan. 7.
Developers Face $197 Billion Challenge (Jan. 2)
China’s property developers have mounting bills to pay in January and shrinking options to raise necessary funds.
The industry will need to find at least $197 billion to cover maturing bonds, coupons, trust products and deferred wages to millions of migrant workers, according to Bloomberg calculations and analyst estimates. Beijing has urgedbuilders like China Evergrande Group to meet payrolls by month-end in order to avoid the risk of social unrest.
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