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<HK Home>Jefferies: HK High-Debt Developers Show No Major Debt Reduction; Small Firms May Face Default Risk
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Sam Wong, Senior Vice President of China Financial Securities Research at Jefferies, commented that the overall debt levels of highly leveraged Hong Kong property developers remain largely unchanged from previous levels, with no considerable reduction; however, a decrease in short-term debt indicated that local banks are more willing to negotiate. Wong noted that large local developers are facing profit pressures. For smaller and medium-sized developers, factors such as less diversified businesses, limited project scales and higher financing costs suggested their situation is likely worse. He did not rule out the possibility of debt defaults among some smaller firms. Wong highlighted that the risk of debt defaults among major Hong Kong developers is low. Despite cash flow pressures, their reduced overall asset values still enable them to cover short-term debts, supported by income from non-residential businesses during the property market downturn. AAStocks Financial News |
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