By LAN Liqi
China’s biggest privately-owned property group, Country Garden, is facing a tough future. The company expects to lose at least 45 billion (US$6.2 billion) in the first half of the year, dwarfing the 1.9 billion yuan profit recorded in the same period last year.
The company issued a statement on August 11 in which Country Garden apologized for the loss and said it would spare no effort to deliver homes on time.
Further exacerbating concerns is a report that two US dollar bond coupons due on August 7 by have yet to be paid.
The primary reason behind Country Garden's crisis lies in the state of the real-estate market as a whole, with sales disappearing off the radar all over. The company admitted that its heavy investment in the lower-tier cities has not paid off but dragged the company down, as home prices and demands in smaller cities continue to be low.
The company expressed "confidence in the future prospects of the Chinese economy," and expects a stable trajectory for the real estate sector. To turn the situation around, Country Garden claims to have four priorities: to deliver houses, address liquidity pressures, maintain operational stability, and reform the decision-making process.
