Shares of Jingrui Holdings Ltd. slumped in their first day of trading in more than nine months, coming after the property developer filed long-delayed earnings reflective of a stark downturn in China’s property market.
Shares slid 33% in Tuesday midmorning trading in Hong Kong, taking the company’s 12-month losses to 75%. Shanghai-based Jingrui last traded in May, halting after shares fell by 48% and 18% in two consecutive sessions amid a delay in the release of financial results and the resignation of its auditor.
Jingrui late Monday filed financial results for 2021 and the first six months of 2022. The company posted a loss of 1.46 billion yuan ($213.3 million) in the first half of 2022, compared with profit of CNY295.3 million a year earlier, as revenue halved and the company’s net finance costs more than quadrupled.
Jingrui said it expects China’s real-estate market to “gradually stabilize from the end of 2022, and enter the recovery channel.”
Separately, Jingrui said a team completed an investigation into questions about CNY4.91 billion in deposits held by the company, a matter PricewaterhouseCoopers had raised when it resigned as the company’s auditor last May.
The company said a board committee concluded that there was no misappropriation of the funds, and the questions had stemmed partly from “a lack of communication” between different departments of the group. Jingrui said it had updated internal controls and no further action in the matter is required.
Jingrui is among the first few of more than a dozen cash-strapped developers to resume trading in Hong Kong after failing to release 2021 financial results last year.
Hong Kong-listed Kaisa Group Holdings Ltd. last week resumed trading after an 11-month suspension. Its shares were down 20% early Tuesday, taking three-day losses since the resumption of trade to 54%.
Both companies were among those hard hit by a downturn in the real-estate market amid Covid-19 outbreaks and Beijing’s tightening of financial measures to rein in debt in the sector.
The Hang Seng Mainland Properties Index was last down 2.4%, taking 12-month losses to 39%.