Kaisa sales target at risk amid questions over ban on project sales
Shenzhen developer confirms government action to halt sales at three projects as founding family reduces its stake in company to 49 per cent
Shares of mainland developer Kaisa Group fell the most in three and a half years yesterday after it confirmed the government's ban on selling its three projects in Shenzhen and announced a stake reduction by the founding family.
Analysts are trying to ascertain what prompted the government action and what impact it will have on Kaisa's sales this month. There is also no word on the whereabouts of its chairman, Kwok Ying Shing, who is said to have been detained by mainland authorities.
Experts said yesterday's stock plunge of 12.5 per cent, to HK$2.30, had largely priced in the risks related to the developer.
"In a nutshell, the current depressed pricing reflects some degree of distress and a potential worsening of the situation," said Haitong International credit strategist Alan Kao.
The Shenzhen-based developer denied media reports in October that its chairman had been detained, days after another Guangdong developer, Agile Property, confirmed the house arrest of its chairman, Chen Zhuolin.
Kaisa said in a filing to the Hong Kong Stock Exchange that the three projects - Shenzhen Dapeng Kaisa Peninsula Resort, Shenzhen Kaisa Yuefeng Garden and Shenzhen Kaisa Central Plaza - had been blocked from sale and the local authorities had stopped processing related transactions.
