JPMorgan Chase’s China developer may see 30% drop in first half earnings

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JPMorgan Chase’s China developer may see 30% drop in first half earnings

According to JPMorgan Chase Co., the Chinese developer may report a 30% decline in first-half earnings due to Bloomberg this month.

Karl Chan wrote in a note on Sunday that no one is immune to the industry turmoil and investors' concerns about the liquidity of most private developers, as they downgraded developers including CIFI Holdings Group Co. and KWG Group Holdings Ltd.

At least 90 billion dollars have been wiped out in China's real-estate stocks and dollar bonds this year, with a bursting housing bubble and an intensifying debt crisis threatening to cause more pain. Pessimism has deepened after Beijing signaled that homeowners, not builders, will be the priority in the authorities efforts to control China's slumping housing market.

China s banking regulator said on Friday that it will meet developers' reasonable financing demands and support their mergers and acquisitions and restructuring of property development projects. In July, home prices fell by 0.1% from June.

The analysts said until there are stronger policy responses and proof of a recovery in sales, the sector's shares are likely to remain lackluster. The brokerage does not expect companies that are still suspended from trading - including China Evergrande Group and Shimao Group Holdings Ltd. - to release first-half results, and there is also a risk of non-publication for others.

There is a chance that there will be a potential short-term rebound in September due to an improvement in month-on-month sales during a traditional peak season, and speculation about strong policy support from the central government after a key party meeting, according to the analysts.

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