Topic
Longfor Group is a top 10 real estate developer in China by sales, providing property development, investment and management services. The company focuses on tier-1 and tier-2 cities in China and has developed more than 1,100 property projects since 1998. It also operates the “Paradise Walk” and “Starry Street” malls across China.
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Beijing-based developer’s net profit fell to 12.85 billion yuan (US$1.8 billion) in 2023, from 24.36 billion yuan in 2022. Revenue from property development declined 31.3 per cent year on year to 155.86 billion yuan.
Property sales in mainland China posted another month of declines in February with demand remaining weak due to uncertainties in income expectations and volatility in the market
The credit ratings agency downgraded Longfor from ‘Baa3’ to ‘Ba2’ as it expects the developer’s condition to deteriorate across the board. A ratings upgrade is unlikely.
The company joins Country Garden and Longfor on a list of developers once considered healthy but exhibiting signs of distress this week, as the situation in China’s housing market deteriorates further.
Shares in Longfor Group Holdings fell as much as 44.2 per cent on Monday after Wu Yajun’s announcement, with onshore and offshore bonds also slumping.
Longfor Group will sell an onshore bond of up to US$250 million next week, one of several private developers poised to issue similar notes guaranteed by a state-owned credit enhancement company.
The developer said its core profit last year was 22.44 billion yuan (US$3.52 billion), up by a fifth from 2020, as it avoided the debt crises engulfing several of its peers.
More property buyers are rushing into the market to get ahead of rising prices and potentially higher mortgage rates as the local monetary authority is expected to raise interest rates in lockstep with the US Federal Reserve’s tapering policy.
Profits and sales have largely diminished, and only the government’s cooling measures seem to lie ahead for the 16 trillion yuan (US$2.3 trillion) housing market.
Problems buying her first flat led the economics graduate to launch a property company that is now worth US$8.3 billion
Sunac’s founder Sun Hongbin, Longfor’s Chairwoman Wu Yajun, and the magnates of Dali Foods and Zhou Hei Ya all transferred their wealth to trusts
Shao Mingxiao said life is becoming tougher for builders after a slew of government measures to take the heat out of the market.
Yang Huiyan, 37, of property developer Country Garden is China’s richest woman at US$22 billion.
The Chinese developer saw net profit jump 38 per cent to 12.6 billion yuan in 2017, while total revenue grew 31 per cent to 72.08 billion yuan
Longfor Properties said net attributable profit rose slightly to 3.85 billion yuan, in the first half of this year and was cautiously optimistic about prospects for the sector despite government attempts to rein in property prices.
