Country Garden Holdings, a Chinese property developer, has expressed uncertainty regarding its ability to continue operating as a going concern. The company reported a net loss of 48.93 billion Chinese yuan ($6.72 billion) for the first half of 2023. This loss can be attributed to the write-down of property projects in response to the current slump in the Chinese real estate market.
Despite a 39% increase in revenue, reaching CNY226.31 billion, Country Garden faced a significant net write-down of properties totaling approximately CNY40.34 billion. This decline was primarily influenced by the weakness in the real estate market.
To address liquidity pressure and protect stakeholder interests, Country Garden is actively seeking solutions and considering debt-management strategies. The company’s ability to continue as a going concern relies on the successful implementation and completion of debt management measures, as well as timely refinancing of existing borrowings upon maturity.
Country Garden’s directors remain optimistic about meeting financial obligations in the coming year. They have reviewed the company’s future liquidity and performance, leading them to believe in their ability to fulfill financial responsibilities.
At the end of June, the net gearing ratio, indicating net debt over total equity, rose to 50.1% from December’s 40.0%. Additionally, cash and cash equivalents declined from CNY128.28 billion at the end of 2022 to CNY101.115 billion at the end of June.