At least 14 real estate firms listed in Hong Kong and mainland China have a one-year probability of default in excess of 20% as of the end of the first half of 2021, according to a report from S&P Global Market Intelligence.
These 14 Chinese companies whose primary business is either real estate development or diversified real estate activities include:
|Company||Market capitalisation ($M)||1 year PD (%)|
|Tianjin Songjiang Co., Ltd.||404.5||54.482|
|China Mining International Ltd.||5.5||33.422|
|China Infrastructure Investment Ltd.||25.2||30.870|
|Xinming China Holdings Ltd.||8.9||29.688|
|Carnival Group International Holdings Ltd.||17.8||28.474|
|Jinan High-tech Development Co., Ltd.||418.3||28.456|
|Lvjing Holding Co., Ltd.||181.4||27.311|
|HNA Innovation Co., Ltd.||275.1||26.717|
|Tianjin Realty Development (Group) Co., Ltd.||331.9||24.202|
|Zhongtian International Ltd.||13.2||22.881|
|Beijing Zodi Investment Co., Ltd.||202.0||22.105|
|Shenyang Public Utility Holdings Co., Ltd.||27.8||21.596|
|Shahe Industrial Co., Ltd.||221.5||21.525|
|Xiwang Property Holdings Co., Ltd.||21.0||21.235|
The median one-year probability of default for the Chinese real estate sector is currently 0.8%.
Analysts expect Chinese banks to exercise greater caution in the extension of credit to real estate developers in the wake of the Evergrande Group debt debacle, as well a due to weaker profitability in general.
Lending to Chinese developers accounted for 7% of total lending by the Chinese banking system as of 30 September, according to figures from Société Générale.