Shares of Zhenro Properties Group Ltd. fell sharply after the company said it may not fully redeem a US$200 million bond on March 5 as previously promised.
Zhenro shares plunged as much as 17% on Monday morning. The stock was last at HK$0.76, down 80% in the year to date.
Zhenro said it expects “its existing internal resources may be insufficient to address its upcoming debt maturities in March,” according to a filing to the Hong Kong stock exchange late Friday. The company’s “internal funds available for debt services became increasingly limited” against the backdrop of adverse market conditions, it added.
Zhenro is seeking waivers and amendments as part of its consent solicitation from debt holders.
“This latest development suggests that the liquidity crunch in China property sector persists despite recent targeted easing policies measures,” CMC Markets analyst Kelvin Wong said. “China property developers debt woes have resurfaced again.”
Weaknesses in the Chinese property sector also came after official data released on Monday showed new-home prices fell for a fifth straight month in January, albeit at a slower pace.
Among other developers that were sharply sold off, Sunac China Holdings Ltd. skidded 9.8%, China Aoyuan Group Ltd. retreated 5.0%, while Agile Group Holdings Ltd. and Shimao Group Holdings Ltd. each lost more than 4%.