No respite in sight for top Chinese developers as profits continue to slump

Major Chinese developers like China Overseas Land & Investment and Country Garden Holdings continue to report disappointing earnings, as the country’s property sector remains mired in a downturn despite a range of supportive measures.

State-backed China Overseas Land & Investment’s profit for 2024 plunged 40 per cent to 15.6 billion yuan (US$2.2 billion) while its total debt dropped 6 per cent to 241.6 billion yuan, according to a filing to the Hong Kong stock exchange on Monday. Revenue fell 9 per cent from a year earlier to 185.2 billion yuan.

The lower profit led to a reduced dividend payout of HK$0.60 (US$0.07) per share for 2024, compared with HK$0.80 a year earlier.

China’s property sector, which used to account for more than a quarter of the nation’s gross domestic product, has been troubled since authorities in late 2020 unveiled a campaign to deleverage real estate companies, which had relied on aggressive bank borrowings and debt financing to buy land and gain market share.

Prices of new homes fell for the 21st straight month in February, dropping 5.2 per cent on an annual basis, while those of second-hand homes declined 7.5 per cent, according to data from the National Bureau of Statistics. The total value of new homes sold plummeted to 9.7 trillion yuan last year, a 43.6 per cent decrease compared with 2019 levels.

State-backed China Vanke, which has close to US$5 billion in bonds maturing this year, reported a net loss of 49.48 billion yuan for 2024, down from a 12 billion yuan net profit in 2023, according to a stock exchange filing on Monday.