Even before China Evergrande Group's debt crisis sent the country's property sector into a tailspin, Chinese property firms were struggling to earn enough to make interest payments on their debt, data showed.
"The risk that China allows some of these firms to declare bankruptcy is significant."
The country's real estate firms did try to accelerate efforts to cut debt last year after regulators introduced caps on three debt ratios. The median debt-to-equity ratio for these 21 firms fell to 1.8 at the end of June - the lowest since 2017 - from 1.9 in December, the calculations showed. "Currently, under the 'Three Red Lines,', Guangzhou R&F and Evergrande are among our tracked developers that are categorised beyond the 'yellow' group, indicating weaker-than- peers' financial positions," said Cynthia Chan, analyst at Daiwa Capital Markets.
Malaysia Latest News, Malaysia Headlines
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