Country Garden Services Plans to Buy Back Shares

by Warren Seah

Country Garden Services Holdings, a property-management company, saw a significant increase in its stock after announcing plans to repurchase shares from the open market. The Hong Kong-listed stock experienced a surge of 21%, and currently sits 18% higher at 9.93 Hong Kong dollars. This move has helped to minimize year-to-date losses, which now stand at 49%.

The buyback initiative will occur in the open market after the release of first-half earnings. The company intends for this repurchase to demonstrate its confidence in long-term business prospects and to benefit both the company and its shareholders.

This positive development comes amidst concerns regarding Chinese property developer Country Garden Holdings. The economic slowdown in China and dwindling home sales have caused prices of Country Garden’s bonds to decrease to distressed levels.

Country Garden Services also released a separate statement affirming that their unaudited net cash from operating activity amounts to at least 20.0 billion yuan ($2.79 billion).

Citi analysts have attributed the recent volatility in Country Garden Services’ share price to investor concerns about related-party overhang. Nonetheless, they remain optimistic about the company’s prospects due to low valuations and supportive policy measures. Citi has a buy rating on Country Garden Services, commending their consistent efforts to improve cash flow, upgrade project quality, and optimize internal operations.

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