China’s biggest developer Country Garden warns it lost up to US$1 billion in 2022, despite leading market in sales

The company expects to report loss ranging from US$797 million to US$1.09 billion, it said in a filing on Monday

The developer maintains it is stable and committed to delivering new homes to buyers

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Country Garden Holdings’ Fengming Haishang residential development in Shanghai, pictured on July 12, 2022. Photo: Bloomberg

Published: 5:00pm, 13 Mar 2023

Country Garden Holdings, mainland China’s largest property developer by sales last year, warned it is set to record a loss of as much as US$1 billion for 2022 as conditions in the country’s teetering property market led to the company’s first full-year net loss since its listing in 2007.

The company expects to report a loss attributable to shareholders ranging from 5.5 billion yuan (US$797 million) to 7.5 billion yuan, it said in a filing with the Hong Kong stock exchange on Monday.

The warning, which comes two days after Shanghai-based developer CIFI flagged a 2022 loss of up to US$2 billion, highlights the difficulties mainland Chinese developers face amid the property market’s long-term downturn – despite Beijing’s efforts in recent months to shore up debt-laden developers.

“Despite the severe challenges faced by the industry in 2022, the company is still committed to ensuring delivery, which is evident by the delivery of around 700,000 residential units by the group together with its joint ventures and associates, and the amount of delivery ranks first in the industry,” the filing added.

The logo for Foshan-based Country Garden Holdings is seen at the company’s Fengming Haishang residential development in Shanghai on July 12, 2022. Photo: Bloomberg

Country Garden said core net profit for 2022, which excludes fair-value changes in assets and currency translation effect, is expected to come in between 1 billion yuan and 3 billion yuan – significantly below the 26.93 billion recorded in 2021.

In August, the Foshan-based company apologised after reporting a net profit of 612 million yuan in the January to June period, its worst half-year performance in its history as a listed company.