The thunder storm in Country Garden has aroused widespread concern. In fact, Country Garden, like Evergrande, is a real estate giant that has risen rapidly through crazy leverage in the past few years. However, when the current real estate market tends to be calm, this leveraged model is no longer applicable. Country Garden must face the problems of declining sales and high asset-liability ratio while ensuring that it does not default.
On the other hand, from the sales situation, from 2022 to 2023, the national average price of Country Garden continued to decline, but the sales volume dropped sharply, and its sales were not as good as expected. Moreover, up to 69% of Country Garden projects are located in third-tier cities. With the liberalization of purchase restrictions in first-and second-tier cities, the demand of third-and fourth-tier cities may be diverted, which will further increase the difficulty of Country Garden.
Under the above background, Country Garden announced the restructuring of overseas debts, exchanging time for space. This means that the company can’t cover the interest-bearing liabilities and needs to solve the capital problem through debt restructuring. However, public default is bound to be accompanied by a series of chain reactions, including the sharp drop in sales, the cessation of cooperation among suppliers, the slow progress of the project, and the shrinking of assets. Country Garden can improve sales to solve the financial problem, but the price reduction is no longer possible. Can this road still work?
Judging from the management of housing enterprises, Country Garden executives attempted to imitate Evergrande and isolate and reduce their assets, which caused widespread concern in the market. However, the incident that Xu Jiayin was forced to take measures undoubtedly had a great deterrent effect on Country Garden. Yang Guoqiang doesn’t want to be the second Xu Jiayin. Country Garden actively guarantees the delivery of buildings, which is also a good thing for property buyers.
In a word, Country Garden must adjust its business strategy in time in order to be in an invincible position in the future market.
Country Garden Enterprise is one of the real estate developers in China, established in 1997, with rapid development and huge scale. Judging from the market performance and development strength, Country Garden enjoys a high reputation in the real estate field and is famous for its excellent residential projects.
However, just like any large enterprise, Country Garden also faces some problems. First of all, due to the large-scale development of Country Garden in many places in China, some local governments have raised concerns about over-reliance on the real estate industry and land finance. Secondly, Country Garden, as an enterprise, needs to pay more attention to social responsibility and sustainable development, such as strengthening investment in environmental protection and social welfare undertakings.
Recently, Country Garden’s reorganization of funds has aroused widespread concern. It is reported that Country Garden plans to solve its debt problem by raising funds and internal restructuring. This reorganization may have an impact on Country Garden’s shareholders, employees and suppliers. If the reorganization plan is successfully implemented, it may stabilize the financial situation of Country Garden and bring positive impact on the sustainable development of the enterprise.
However, there are also potential risks and uncertainties in the process of reorganization. For the investors and creditors of Country Garden, they may face some losses. In addition, the reorganization may lead to a chain reaction in the whole real estate industry, which will have an impact on related industrial chains and the job market. Therefore, the government and regulatory agencies should pay close attention to this incident and take appropriate measures to protect the interests of all parties and maintain market stability.
Generally speaking, as an important real estate enterprise, Country Garden plays an important role in China’s social economy. We need to keep an eye on its operation and restructuring plan, and hope that Country Garden can properly solve its problems and make positive contributions to society.
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