China developers to miss earnings deadlines

Hong Kong

CHINA Evergrande Group became the latest Chinese developer to warn that it would probably miss deadlines for reporting audited 2021 results due this month. Sunac China Holdings and Shimao Group Holdings also announced delays, with both firms blaming the latest Covid-19 wave in China.

The nation's Hong Kong-listed property firms face a Mar 31 deadline to file annual results, and their shares would likely be halted if they are unable to release audited figures 3 months after their fiscal year ends.

Evergrande's shares currently remain suspended. The company will hold a global investor call this week to brief investors on its restructuring framework, REDD reported on Monday (Mar 21).

Evergrande and its two Hong Kong-listed units expect to delay publishing the results by Mar 31 because audit work has not been completed, a stock exchange filing showed on Tuesday.

Sunac and Shimao issued similar statements Monday night.

Evergrande said "drastic changes" in the operating environment added to audit procedures. Shimao and Sunac plan to release unaudited 2021 results on Mar 31.

Evergrande said it will publish audited results "as soon as practicable" after audit procedures are completed.

Chinese property firms listed in Hong Kong face a Mar 31 deadline to file annual results, their first audited financial statements since the industry's liquidity crisis spread.

Transparency and governance concerns have cropped up alongside worries about developers' ability to repay debt after a record number of defaults last year.

Evergrande Property Services Group has found that deposits of about 13.4 billion yuan (S$2.9 billion) as security for third-party pledge guarantees had been enforced by the relevant banks, it said in a filing to the Hong Kong stock exchange.

The company will establish an independent investigation committee and arrange for experts to be appointed to investigate the pledge guarantees, it said.

Sunac and its subsidiaries said they see a decrease in profit attributable to owners of the company of approximately 85 per cent year on year and a core net profit decline of 50 per cent compared with a year earlier. BLOOMBERG