HONG KONG (Reuters) – Shares in Chinese property developer Longfor Group Holdings plunged a fifth on Monday after its chairwoman’s resignation further exacerbated the loss of investor confidence in the sector.
Wu Yajun, 58, has stepped down as chairwoman and executive director due to age and health concerns, but will continue as a strategic development consultant, Longfor said in a filing late Friday.
“Longfor’s business activity remains stable with a clear development direction,” CEO Chen Xuping, 40, said in the filing. He will assume the role of President.
Citi analysts said in a note that investors overreacted and his retirement was in line with Chinese rules. In China, the official retirement age for women in white-collar jobs is 55, compared to 60 for men.
Longfor also said in a separate statement on Monday that its majority shareholder, Charm Talent International Limited, bought 3 million shares of the company at HK$9.53 apiece on the open market during the morning session. He also said the company had repaid HK$5.1 billion ($650 million) that was part of a syndicated loan due next year.
The company said Charm Talent’s stake had increased from 43.36% to 43.41% and that it would continue to increase its holdings of the company’s shares and senior bonds at an appropriate time in the future. .
Investors spooked amid fears that debt problems in the real estate sector had spread to companies previously seen as financially sound – fears which grew after Longfor peer CIFI Holdings (Group) defaulted payment of his debt.
Shares of Longfor fell 19% to HK$10.64 in the early afternoon, having regained ground after falling 40% earlier. The price of one of its onshore bonds also fell, slipping 30% and was temporarily suspended from trading.
The Hang Seng Mainland Properties Index fell 4.7%.
According to a memo from a call between senior executives and analysts at Longfor held on Sunday evening that was seen by Reuters, the company said it expects to have recurring revenue – which is primarily rental income – of approximately 50% of the group total. profit in the future.