China’s Country Garden reduces loss by 82% to $4.5 billion in 2024

Chinese real estate developer, Country Garden Holdings, has made significant strides in reducing its annual loss, showing an 82 percent decrease to USD4.5 billion in 2024 compared to USD24.6 billion in 2023. The company’s annual earnings report, released on March 28, revealed that revenue fell by 37 percent to CNY252.8 billion, with the majority of it stemming from property sales.

The Chinese government implemented various supportive measures last year to stabilize the housing market, which has shown signs of improvement after a three-year decline. These measures have helped increase transaction volumes in core cities. The company acknowledged these positive signs and highlighted that the industry is poised for new development opportunities after undergoing necessary adjustments.

Contracted sales saw a steep decline of 70 percent, totaling CNY47.2 billion in the past year. Despite this, Country Garden successfully delivered more than 380,000 housing units, though this number was lower than previous years. As of December 31, the company held total debt of around CNY253.5 billion, of which CNY226.8 billion was short-term liabilities. Meanwhile, total cash amounted to CNY29.9 billion, including restricted cash of CNY23.5 billion.

While the company’s total assets surpassed CNY1.03 trillion, total liabilities amounted to about CNY984.6 billion, resulting in net assets of approximately CNY51.3 billion. Moving forward, Country Garden aims to protect its cash flow, enhance the performance of under-performing assets, optimize its organizational structure, control expenses, and explore methods to manage debt effectively to alleviate periodic liquidity constraints.

Despite these challenges, the company remains resilient. Its shares [HKG: 2007] traded at 48 Hong Kong cents (6 US cents) in Hong Kong. The company remains focused on overcoming obstacles and navigating the dynamic real estate market to achieve sustainable growth and success in the future.