Shares of major Chinese property firms advanced on reports suggesting that regulators will no longer require developers to provide debt metrics, once central to curbing leverage.
As of 4:18 PM (GMT+7), China Vanke’s shares climbed 8.02% to HKD 4.04, Sunac China Holdings surged 29.13% to HKD 1.33, Country Garden Holdings advanced 16.36% to HKD 0.32, China Overseas Land & Investment added 6.09% to HKD 14.63, and Longfor Group Holdings increased 5.78% to HKD 10.44.
The upswing followed a Beijing News report indicating that certain developers have been told they no longer need to submit monthly data for the “three red lines” financial indicators. These metrics, introduced in 2021, were designed to limit developers’ leverage by monitoring liabilities relative to assets, net debt compared to equity, and cash positions against short-term borrowings.
Should the regulatory adjustment be confirmed, it would mark a substantial easing of controls that contributed to a wave of defaults and prolonged financial stress among real estate firms. The shift reflects broader efforts to counter ongoing weakness in China’s property market and is in line with recent initiatives to lower mortgage costs and relax home buying constraints.
In a related development, China Vanke secured bondholder approval to postpone repayment on two yuan-denominated bonds, allowing the heavily indebted firm additional time to manage upcoming obligations. The approval follows Vanke’s improved offer earlier in January, which proposed partial principal repayment and additional collateral after prior terms were rejected by investors.
Vanke, holding approximately $50 billion in debt, has been a focal point of China’s protracted property sector crisis. Any financial distress could further undermine consumer confidence amid broader concerns over weak economic momentum.
