Cranes operate at a residential construction site in the Qinghe district of Beijing,... Read More
Agile, based in Guangdong province, dropped 7.2 percent to HK$5.39 after saying it will offer one rights share for every five held at HK$4 apiece, a discount of 31 percent to Sept. 19 closing price. The stock’s decline today is the biggest since January 2012, while the benchmark Hang Seng Index dropped 1.4 percent.
The developer follows Country Garden Holdings Co. (2007) and Yuexiu Property Co. (123) in tapping shareholders for funds as tighter credit and an economic slowdown cut demand for real estate. China’s new-home prices fell in August from the previous month in all but two cities monitored by the government, and some builders are trailing their annual sales targets.
“There’s a possibility that more Chinese developers will do a rights issue,” said Alan Jin, an analyst at Mizuho Securities Co., declining to
name specific companies. “Those with the highest gearing are the most likely.”
Agile said in a statement today it plans to raise HK$2.75 billion ($355 million) to refinance debt and use as working capital. HSBC Holdings Plc, Standard Chartered Plc and BNP Paribas SA are underwriting the offer.
Agile has a net debt-to-equity ratio of 99 percent, compared with the average of 61 percent among its peers, according to data compiled by Bloomberg. Its total debt rose to 44.7 billion yuan ($7.3 billion) as of June 30, from 39.5 billion yuan at the end of last year, Bloomberg data shows.
The proceeds from the rights issue are unlikely to solve Agile’s “current problems” such as exposure to low-tier cities and mismatching of products and segments, Oscar Choi, an analyst at Citigroup Inc., said in a note today.
“Without a ’top-down’ overall strategy to rectify the situation, we believe any efforts on problem-solving may just be superficial with a short-lived impact,” he said, maintaining a sell recommendation on the stock.
No comments:
Post a Comment