Jiayuan International Group (2768.HK)

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Chinese developer behind US$1 million nano flats comes under severe selling pressure as shares plunge 80pc in Hong Kong
* Jiayuan International Group, the builder behind the T Plus micro flat project in Tuen Mun, sinks 81 per cent, loses HK$26 billion in market value
* Sunshine 100 China Holdings sheds 65 per cent

Lam Ka-sing
PUBLISHED : Thursday, 17 January, 2019, 6:02pm
UPDATED : Thursday, 17 January, 2019, 7:41pm

Chinese property developers in Hong Kong came under severe selling pressure, with the shares of two builders sinking by as much as 80 per cent in late trading on Thursday afternoon.

Analysts said the stocks may have taken a hit because of banks selling shares used as collateral to borrow money and tightening liquidity conditions on the mainland.

Jiayuan International Group, which is behind the T Plus micro flat project in Tuen Mun, plunged 80.6 per cent to HK$2.52 at the close.

Over 357 million shares were traded on Thursday, 68 times the daily average over the past one year.

The mainland-based developer has been under pressure as sales of units at the project have not picked up owing to the downbeat market sentiment.

The project’s sales launch closed early on December 8 after only two of the 73 units on offer were sold, agents said. Some flats measure 128 square feet, smaller than a standard Hong Kong car-parking space, but are priced at HK$8.25 million (US$1.05 million).

About HK$26 billion of the company’s market value was wiped off on Thursday.

Last week Jiayuan said that contracted sales had plunged 31 per cent to 2.15 billion yuan (US$317.4 million) in December.

In the past year the company has been taking over property projects, land plots in Hong Kong, Guangdong, Guiyang, Urumqi and Cambodia, according to stock filings.

Jiayuan had US$350 million of debt maturing on Thursday. The yield on the bond with a 8.125 per cent coupon surged to 116 per cent from 16 per cent at the beginning of this month as investors dumped the paper.

Jiayuan said in a statement that the bond had been repaid in full.

A source at Jiayuan’s creditor confirmed the company had received the payment last week and that the sell-off may have been caused by a major investor of the company getting detained in China, prompting banks to clear his positions in Jiayuan and other counters including Sunshine 100 China Holdings.

More details in https://www.scmp.com/business/money/stoc...omes-under
Specuvestor: Asset - Business - Structure.
Pricing a 128 sq ft flat at HK$8.23 Mil is OTT when paying the same price can buy a 500 sq ft used flat in most parts of Tuen Mun.

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