Shimao Group’s Stocks and Bonds Both Heavily Plunged Again

On Dec 13, after the collapse of Evergrande Real Estate, Shimao Group, another real estate giant of the Chinese Communist Party (CCP), once again saw its stocks and bonds plummet by more than 10% because its inability to repay its debts remains an issue despite its recent various kinds of liquidation mortgages. 

Shimao Group, whose market had plunged 12% in November after being revealed its negotiation with Lujiazui Trust to postpone payment of its debts, saw its shares plunge 13% again on Dec 13 in response to news that the company is experiencing liquidity difficulties. Meanwhile, its AAA-rated bond also plunged 54%.Recently, Shimao Group has been known to raise funds for debt repayment by mortgaging its headquarters building, selling its corporate divisions, and selling its property management-related companies. However, news exposed that the company sold its long-mortgaged apartments in a community of Shanghai to customers who were not informed of the fact, turning the people who are supposed to be the owners of the community to activists to demand their rights.

 Shimao Group’s total debt has now exceeded US$10.1 billion, and many have expressed concern about when a default similar to Evergrande’s will emerge. In fact, Miles Guo visualized CCP real estate’s collapse as an iceberg breaking in his live broadcast a long time ago, and Evergrande and Shimao are only the tips of the iceberg.