It will take a LONG TIME for it to RECOVER! Beware !!!!Looking at the monthly chart, we can see that this TOP developer in China with more than 3 decades of experience has finally succumb to its heels with mounting debts and internal management issues that remains unresolved.
We already knew the State Government has said they won't be chipping in this time to help prop up the property sectors (not forgetting the local government themselves are mired in heavy debts as well)
While the chart shows the price action has reached a support level of 6.56, I remain unconvinced to put my money into this stock or any property stocks in China. Deflationary pressure remains high in this country with escalating high unemployment and many existing home owners are unable to service their mortgage debts. They have resigned themselves to fate and let the banks auction their properties of which the latter also received poor response.
Many smaller developers in the 3rd to 4th tier cities have gone belly up and we are not surprised to read news that they are extremely desperate to offload their properties as quickly as possible. I read somewhere that those who owed corporate debts are using these unfinished properties as a way to pay off their loans. So , it is merely passing the baton from one to another. If you are the creditor, you are also in catch 22 position. The debtor has no money but loads of properties awaiting to be constructed - if you accept it and get workers/contractors to build it and sell it , maybe you can collect some money but most likely still at a loss. Will you accept it or sue the debtor and not get a single cent back ?
