Redsun Properties Facing Winding-Up Petition in Hong Kong Court

Introduction

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.

Financial Performance

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.

Debt-to-Asset Ratio

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.

Market Reaction

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.