China's Kaisa forecasts bigger H1 net loss on slower property deliveries (updated)

Agile group

22/08/2024 24:46

(Adds background and context in paragraphs 2-3)
       Aug 22 (Reuters) - Chinese property developer Kaisa
Group  1638.HK  said on Thursday it expects to report a bigger
net loss for the first half of the year, hurt by a decline in
property deliveries and higher impairment provisions set aside
for projects.
    China's property sector, a key driver of the economy, has
been in turmoil since 2021, with housing sales plummeting 6.5%
in 2023 from the previous year and 35.9% from its 2021 peak,
following a regulatory crackdown on high leverage among
developers that sparked a liquidity crisis.
    The slowdown in the property market has led to decreased
real-estate project deliveries, which in turn has resulted in
lower recognised revenues for developers like Kaisa.
    At the same time, many developers are struggling with unsold
inventory, delayed projects, and declining property values,
implying a need to recognise higher impairment losses on
property projects.
    Earlier this month, peers including Agile Group  3383.HK ,
Redsun Properties  1996.HK  and Sunac China  1918.HK  all
flagged bigger or similar losses for the half year.
    Kaisa expects a net loss of 8.8 billion yuan to 9.8 billion
yuan ($1.23 billion-$1.37 billion) for the half year ended June
30. It had reported a net loss of 6.6 billion yuan for the
year-earlier period. 

($1 = 7.1344 Chinese yuan)

 (Reporting by Roushni Nair in Bengaluru; Editing by Shilpi
Majumdar and  Subhranshu Sahu)
 ((Roushni.Nair@thomsonreuters.com;))