By Jiahui Huang

Chinese property stocks fell in Hong Kong on subdued investor sentiment with companies reporting weaker contracted sales for December and the full year of 2023 as the property sector downturn continues.

The Hang Seng Mainland Properties Index, which tracks Chinese property developers, was 3.2% lower at the midday break on Tuesday, taking losses for this week to 4.5%. Longfor declined 7.1% and Yuexiu Property fell 6.6%, while Country Garden Holdings and Country Garden Services were 5.6% and 5.0% lower, respectively. Sunac China, Sino-Ocean Group, Kaisa Group and Greenland Hong Kong were each more than 6.5% lower.

The property stocks weighed on the benchmark Hang Seng Index, which was 1.9% lower at the midday break.

Last week, Seazen Group said its contracted sales fell 35% in 2023 while Guangzhou R&F Properties reported a 48% decline for the year.

Daiwa recently downgraded its rating on Longfor to outperform from buy on concerns that large amounts of low-margin inventory could weigh on its earnings in the short term.

China's property sector has had a weak start in 2024, Nomura analysts said in a recent note. Over the past week, new home sales volume growth weakened sharply on year, especially in tier-2 and low-tier cities, the analysts said.

China's new home sales in 30 major cities have declined 41% year-to-date in 2024, likely reflecting that the challenges may be larger than what the market expects, Gary Ng, senior economist at Natixis said, quoting data provided by Wind.

"Together with the slow restructuring progress and policy support, investors are losing patience for the long-waiting recovery," he said.

Write to Jiahui Huang at

(END) Dow Jones Newswires

01-16-24 0047ET