April 20, 2012 / 4:51 AM / 7 years ago

More Chinese developers file for bankruptcy: report

HONG KONG (Reuters) - More Chinese property developers have filed for bankruptcy, the South China Morning Post reported on Friday, as some small real-estate companies struggle after more than two years of measures by Beijing to curb home prices in China.

Guangdeye Property Development, based in Shunde in the southern province of Guangdong, has declared bankruptcy, unable to pay back debt, the newspaper stated, citing the Shunde People’s Court.

Hangzhou Jinxiu Real Estate, developing a luxury serviced apartment project in that city, had also filed for bankruptcy, said the newspaper, citing local media.

News of the two bankruptcy filings follows the widely reported failure of Hangzhou Glory Real Estate, another developer in Hangzhou, the capital of Zhejiang province further north on China’s coast.

With around 60,000 developers in China, analysts expect more failures among unlisted companies, which would benefit big, geographically-diverse listed developers such as China Vanke (000002.SZ) and Evergrande Real Estate (3333.HK).

Jinsong Du, China property analyst at Credit Suisse, told Reuters that bankruptcies are likely to spread to other cities. The court filings show that the companies are trying to stay in business instead of simply exiting the industry.

“Historically, most small developers just took whatever they had and disappeared, rather than filing for bankruptcies,” Du said.

Other developers have been selling off assets to pay down debt. CCB International this week upgraded its rating on the stock of Greentown China Holdings (3900.HK), which has raised 4.8 billion yuan ($761.43 million) in cash by selling out of developments in 2011 and 2012 in a bid to deleverage.

($1 = 6.3039 Chinese yuan)

Reporting by Alex Frew McMillan; Editing by Michael Perry

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