Country Garden Heiress Selling $650M in Property Management Shares as Price Rebounds

Hailed as China’s richest woman, Yang Huiyan has agreed to sell a portion of her controlling stake in Country Garden Services Holdings for about HK$5.06 billion ($650 million) to mark the third major sale of equity in the group within a month.

Yang’s investment vehicle Concrete Win Ltd has agreed to dispose of 237 million shares in Country Garden Services, the listed property management arm of Country Garden Holdings, for HK$21.33 apiece to several independent investors, according to a regulatory filing on Sunday. Selling at an 11 percent discount from the stock’s closing price on Friday, the 41-year-old billionaire is slashing her stake in the company she chairs by nearly a sixth, to 36.12 percent from 43.15 percent currently.

The disposal marks the third major sale of equity in the Country Garden empire arranged by her family in just three weeks, following a pair of new share placements by Country Garden Holdings worth as much as HK$8.6 billion since 22 November.

Country Garden Services assured investors that the disposal will not have “any adverse effect on the financial position or business operations of the group.” By the end of Monday the parent firm’s shares had fallen 5 percent to HK$2.90, while Country Garden Services saw its stock price drop by 16.99 percent in the wake of the announcement. Sought for further comment, Country Garden Services had not responded to Mingtiandi’s queries by the time of publication.

Stock Tumbles

Yang, who ranked as mainland China’s wealthiest woman in a report issued by the Hurun Research Institute on Monday, is selling her shares after Country Garden Service’s stock price managed to more than triple from just HK$7.31 on 1 November to HK$23.95 on 9 December, helped along by fresh policy support for the real estate sector from the mainland government.

The share sale represents a 10.9 percent markdown from the stock’s closing price on Friday, but is still more than triple the share’s record low of HK$6.86 apiece on 31 October. Following the announcement, shares at the company plunged to HK$19.88 by the end of Monday.

Yang will remain as the controlling shareholder even after the disposal of the equivalent of 7.03 percent of Country Garden Services’ total issued share capital. The disclosure did not specify her plans for the proceeds from the share sale, but a report by Bloomberg citing terms of the share sale agreement said that Yang’s investment vehicle has vowed not to divest further shares in the company within 90 days post-sale.

Aside from having the top position in the property management service provider, Yang also co-chairs China’s largest developer Country Garden Holdings alongside her father and company founder, Yang Guoqiang.

Following the share sale, Country Garden Services has a market capitalisation of HK$67 billion, with the share price down 55.4 percent from its HK$44.60 level at the start of 2022.

Hungry For Cash

The equity disposal marks the latest share deal engineered by the Yang family, as Country Garden Holdings faces RMB 524.25 billion ($75.2 billion) in maturing liabilities through mid-year 2023, based on its interim report for the period ending 30 June.

On 7 December, the developer announced plans to issue 1.78 billion new shares for HK$2.70 each that could generate HK$4.74 billion in fresh funding, offering investors a slice of the property giant at a 15 percent discount from the stock’s HK$3.17 price on 5 December.

That stock issue came two weeks after Country Garden Holdings on 22 November had placed 1.46 billion new shares at HK$6.68 each, raising HK$3.87 billion to repay offshore debts and provide general working capital.

With the developer’s sales in the first half of the year having fallen 39 percent from the same period in 2021, the bulk of the company’s outstanding liabilities consist of RMB 435.7 billion in trade balances and other payables, followed by maturing bonds, bank loans and other borrowings of about RMB 85.5 billion.

Despite reporting a drop in profit in the first half, Country Garden Holdings trimmed its overall financial liabilities by 9.7 percent to RMB 769.4 billion at the end of June from RMB 851.8 billion at the same point in 2021.

As of 30 June, Country Garden Services has RMB 14.4 billion ($2 billion) in financial liabilities in maturing by mid-2023, which includes RMB 12.8 billion in trade and other payables and RMB 1.4 billion in total borrowings, according to its latest interim report. Similar to its parent firm, Country Garden Services’ total financial liabilities dipped by 9.8 percent in the first half of 2022 to RMB 16.5 billion from RMB 18.3 billion during the same period a year earlier.

Debt Woes Halve Fortune

While Yang Huiyan will take in some cash from her share sale, the billionaire heiress saw her assets trimmed by an estimated $15.7 billion this year – the largest drop in wealth among China’s female billionaires as tracked by the Hurun Rich List.

Despite her falling fortunes, Yang kept her title as China’s richest woman this year with holdings of $10.7 billion, which are anchored by her stakes in the Country Garden empire.

Country Garden’s Holdings’ profit attributable to owners plummeted 96 percent to RMB 612 million in the first half of 2022 from RMB 15 billion a year ago.