Zhuhai Huafa Misses Debt Payments Amid Property Slump

Zhuhai Huafa Group Co.,Ltd, a conglomerate wholly owned by the Guangdong government, has missed payments on two trust products and requested loan extensions from at least three banks. The company holds approximately 413 billion yuan in interest-bearing liabilities, making it the largest property-reliant firm to struggle with debt payments since China Vanke.

The financial distress follows a 16.9 billion yuan loss last year, driven by the prolonged downturn in China's property market. Market reactions were immediate, with shares of Zhuhai Huafa Properties falling as much as 8.9% in Shanghai and one of the group's offshore yuan-denominated bonds dropping by a record 17%.

Despite the defaults, China Lianhe Credit Rating Co., Ltd. affirmed the firm's AAA rating earlier this year. This rating reflects expectations that the company's role as a critical local economic actor will prompt government intervention to stabilize its finances.