Sunac shares plunge on trading resumption
Mainland property developer Sunac China Holdings Ltd's shares fell 45 percent on Thursday morning after resuming trade following a suspension of more than a year as it looks to restructure its debt after a default. The share slump came a day after the company said in a statement to the Hong Kong stock exchange that it was to resume trading and was implementing a debt restructuring plan. Sunac's shares were down by nearly 60 percent in pre-market trading but trimmed losses after the market opened. "The stock was catching up with the decline in the property sector during the year of suspension," said Steven Leung, a sales director at UOB Kay Hian. "It's a good sign that the company could resume trading as it suggested that the company is able to meet the required criteria for a trading resumption," he added. Sunac is among the many Chinese developers that defaulted last year as the property sector reeled under a debt crisis. Over the last two years, property firms on the mainland have struggled to sell new houses or have sold them at lower prices than expected. Beijing began rolling out supportive policies late last year as a result. Sunac said in late March that it had reached agreements with a group of offshore creditors to convert its debt into new notes and convertible bonds backed by its Hong Kong-listed shares and shares in its property management unit Sunac Services . Sunac published its overdue 2022 interim results last month, showing a core loss of 11.06 billion yuan (US$1.6 billion). The property industry faces an uneven recovery, with some developers like Sunac and China Evergrande Group striking debt restructuring deals, while others face delisting, said Yan Yuejin, an analyst at the E-house China Research and Development Institution in Shanghai. Earlier this month, the Hong Kong stock exchange cancelled the listing of Chinese developer Cinic Holdings after it failed to meet trading resumption requirements in the time allotted. (Reuters)