Shimao Group Holdings Ltd. shares rose after local media reported that the Chinese developer is seeking to sell its real-estate projects and speed up sales of its assets.
The stock advanced as much as 7.9% early on Monday before it pulled back. It was last 2.1% higher at HK$4.80 and 44% lower from a month ago.
Chinese financial-media outlet Caixin reported over the weekend that Shimao had put its residential and commercial projects on sale and had been seeking buyers since December.
The report came after its subsidiary, Shanghai Shimao Jianshe Co. Ltd., defaulted on a trust loan last week. On Friday it sought to dispel investors’ concerns about its debt, noting that it faced some liquidity pressure but hadn’t defaulted on any public-market debt.
Analysts have turned bearish on Shimao in the short term. U.S. bank Jefferies said last week that the failure to repayment the trust loan may mean it would have to sell core assets, including offices, malls and its stake in Shimao Services Holdings Ltd., to meet its short-term repayment obligations.
That could mean it will have to recognize more disposal losses this year and next, Jefferies added.
“The damage to its brand name may deter potential homebuyers from buying the projects” amid fears projects won’t be delivered, Jefferies said.
Both Jefferies and Daiwa Capital Markets downgraded Shimao to hold from buy. Jefferies lowered its target price to HK$4.92 from HK$9.06 while Daiwa dropped its target price to HK$5.20 from HK$20.00.