Redsun Properties' parent company, Hong Yang Group, is set to face a winding-up petition in a Hong Kong court, adding to the growing list of heavily indebted Chinese property developers facing legal proceedings in the city.
Winding-Up Petition Hearing
The High Court of Hong Kong has scheduled a hearing for the winding-up petition against Hong Yang Group on March 27. Serica Agency is the other party involved in this case, according to a judiciary record.
Despite being one of the prominent property developers based in Nanjing, Redsun Properties has encountered difficulties. The company reported annual contracted sales of 21.83 billion yuan ($3.04 billion) in 2022, representing a significant decline of 38%. Furthermore, in the first half of 2023, the company's revenue dropped by 52% to CNY6.10 billion.
As of June, Redsun Properties had a debt-to-asset ratio of approximately 78.7%, compared to around 76.6% at the end of 2022.
In response to the news, Redsun Properties shares experienced a sharp decline of 8.5% to 8 Hong Kong cents (1 U.S. cent) on Monday. This decline was part of a broader weakness seen in the property sector.
Chinese Property Developers Index
The Hang Seng Mainland Properties Index, which tracks Chinese property developers, has recently fallen by 6.3%, accumulating losses of 24% since the beginning of this year.
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