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Chinese Property Developer Fantasia Holdings Group Sees Stock Plummet Amid Liquidity Crisis

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Andrew R. Michaud

August 12, 2023

Shares of Fantasia Holdings Group, a Chinese property developer, experienced a significant decline in Hong Kong on Friday as trading resumed following a year-long suspension caused by the company's liquidity crisis.

The stock has plummeted by as much as 60%, with the latest figures showing a 57% drop to HK$0.086.

This sharp decline follows Fantasia's announcement on Thursday, revealing heavy losses for both 2021 and 2022. The company reported a loss of 6.07 billion yuan (US$841.0 million) in 2022 and an additional loss of CNY10.47 billion in 2021, primarily due to significantly lower property sales.

Earlier, the company had faced obstacles in releasing these earnings as it struggled to restructure its debts amidst a broader liquidity crisis faced by China's real estate sector. Trading of Fantasia shares had been suspended for over a year since early 2022.

The decline in Fantasia's stock value is not an isolated incident, as other Chinese developers also witnessed significant drops in their stocks. Country Garden Holdings, one such developer, experienced a 9.6% slump. This decline followed Country Garden's warning that it expects to report a loss in the first half of the year due to decreased real estate business margins, property-project impairments, and declining sales.

"Since 2021, the industry has entered an unprecedented difficult period with multiple unfavorable factors, resulting in severe difficulties and challenges for industry sales and open market financing," stated Country Garden in a stock exchange filing on Thursday.

The situation faced by Fantasia Holdings Group and other Chinese developers highlights the ongoing challenges and hardships faced by the real estate industry in the country.