We believe that the COVID-19
outbreak has had a significant
impact on the cash flow
of some property developers,
increasing their liquidity
risk. In our view, certain
developers with inadequate
inventories will need
to accelerate land acquisitions
once the outbreak comes
to an end. This will likely
lead to greater financing
requirements over the
next few months. Financing
costs in the offshore
bond market for property
developers are rising
due to COVID-19, and financing
conditions for developers
in the onshore market
remain tight. Certain
developers which struggle
to bear higher financing
costs may find it more
challenging to get financing.