Dollar bonds of Central China Real Estate (CCRE) tanked by as much as 12% after the property developer reported its half yearly results which showed a sharp rise in its net debt ratio and a slump in cash. Its net borrowings totaled CNY 11.8bn ($1.8bn) with its net debt ratio soaring to a massive 92.6% in 1H2021 from 13.6% a year ago. Its cash, cash equivalents and restricted bank deposits fell 44% to CNY 16.5bn ($2.5bn). CCRE’s gross profit margins declined to 17.9% in 1H2021 from 23.7% in 1H2020. On the positive front, revenues rose 56.4% YoY to CNY 20.4bn ($3.1bn) and profits for the first half came in at CNY 1.03bn ($160mn), up 30.4% YoY. Impairment losses decreased from CNY 95mn ($14.6mn) in the prior year’s corresponding period to $35mn ($5.4mn) as at end-June 2021. CCRE said that they continue to “implement a prudent approach to acquire land and accelerated the project construction progress so as to shorten the development cycle”.
CCRE’s USD 7.5% 2025s were down 12.3% to 69.73 and its USD 7.25% 2024s were down 11.8% to 71.34 cents on the dollar yesterday after the results came out. The bonds are only marginally higher today.