Shares and bonds of Chinese developer Zhenro Properties Group slumped amid speculation that the company does not plan to redeem a US$200 million bond next month. The Shanghai-based developer told investors late on Thursday that its plan to call the bond remain unchanged, sources told the Post , refuting rumours which went viral earlier in the day that Zhenro could skip a window to redeem the perpetual bond to keep a comfortable level of liquidity. The company’s reassurance did not stop investors from dumping its shares and bonds. “It is understandable if Zhenro wishes to conserve its cash, as homes sales in February are expected to remain weak across the industry,” said Leonard Law, credit analyst at Lucror. The Hong Kong-listed company’s shares plummeted by as much as 79 per cent on Friday. The shares eventually closed 66.4 per cent lower at HK$1.23. Zhenro’s US$200 million 10.25 per cent perpetual bond dropped to 50 cents on the dollar by midday on Friday from 99 cents two days ago. It later recovered to 63.5 cents. The company did not reply to inquiries from the Post . Founded by Ou Zongrong, a Chinese People’s Political Consultative Conference delegate, the mainland’s top advisory body, Zhenro is well clear of the so-called three red lines – metrics introduced to curb borrowing among highly leveraged developers. “All outstanding securities [of perpetual notes] will be redeemed in full on 5 March 2022,” chairman Huang Xianzhi said in an exchange filing on January 4. Investors shun Chinese developers as bond sales slump 70 per cent with market frozen for many junk-rated borrowers amid defaults Unlike many other property developers who have repeatedly missed their payments, Zhenro continues to service its bonds, making coupon payments for two dollar notes this month. It made an interest payment of US$12.75 million due February 3 on a bond maturing in August and US$9.75 million due February 4 on a 2026 note. Last January, it repurchased a US$310 million 9.15 per cent note ahead of its due date in March 2022. However, the company has US$2.47 billion of bonds due this year, with a US$271.5 million note coming up in April. The company is debating whether it was necessary to buy back all of the perpetual notes at once, considering it has other debts due this year and that other developers were extending their bond repayment schedule, sources told the Post . Zhenro said it sold 7.9 billion yuan (US$1.2 billion) worth of homes in January, down 30 per cent from the same period last year. The collective sales value of China’s top 100 developers fell 41 per cent in January from last year to 526.6 billion yuan, widening the slump from the 38 per cent contraction in December, according to the China Real Estate Information Corporation, which compiles industry data.