China Vanke's Potential Default Shouldn't Lead to Severe Fallout — Market Talk

Dow Jones Newswires

A potential default by China Vanke could cause irreversible damage to the company's credit profile, but the ripple effects will likely be contained, unlike the systemic shocks in 2021, HSBC Global Research analysts write in a note. The company's market share shrunk to 1.7% last year from 3.4% in 2021. Due to limited land replenishment, the company's aging land bank is struggling to compete with quality state-owned enterprises, they add. Even an aggressive cut in prices would pose limited downside risks to key developers, HSBC says. The bank is less concerned about the impact of Vanke and advocates a bottom-up approach for stock picking. Among property stocks, HSBC likes China Resources Land, C&D Group and Seazen Group. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

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China Vanke's Potential Default Shouldn't Lead to Severe Fallout — Market Talk

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