Property developer Sunac China warned investors that losses in 2024 could triple, a year after reorganising its defaulted debt with creditors, as a housing market slump continued to hurt home sales and erode the value of its assets.
Net loss could widen to about 25.5 billion yuan to 26 billion yuan (US$3.6 billion) for the year ended December 31, according to a Hong Kong stock exchange filing on Monday. The company reported a 7.97 billion yuan loss in 2023, which was mitigated by a 31.5 billion yuan gain from its offshore debt restructuring.
Tianjin-based Sunac said its onshore debt restructuring, which helped trim its debt by 15.4 billion yuan, was expected to generate a smaller gain in 2024. It did not provide a figure. Sunac plans to publish its 2024 results on March 28, according to its filing.
“The company recording a loss for [2024] was mainly due to the significant reduction in the recognised revenue as a result of the market downturn,” it said in the filing. There were also provisions for impairment on assets and contingent liabilities at the same time, it added.
China’s housing market is struggling to overcome a four-year slump, first triggered by Beijing’s “three red lines” policy to curb excessive leverage among the nation’s weakest borrowers and later compounded by the Covid-19 pandemic. Prices of new homes fell for the 21st straight month in February, the statistics bureau said on Monday.