Zhuhai Huafa Group Co., a major property developer in Guangdong owned by local government, reportedly failed to pay two maturing trust products. Bloomberg reported on Tuesday that the company asked at least three banks to extend loan tenors.
Zhuhai Huafa Properties Co. shares fell 8.9 percent in Shanghai.
Scale of obligations and state ownership
The group had 413 billion yuan of interest-bearing obligations as of March 2026, including bank loans, trust loans and bonds. The local State-owned Assets Supervision and Administration Commission holds about 93.5 percent of the group.
China Lianhe Credit Rating still rates Huafa AAA, citing expected local government guarantees. Analysts note that local fiscal capacity is limited.
Analysts weigh government support
Yao Yu, chief executive and founder of the credit research firm RatingDog, said Huafa faces the same challenges as other Chinese developers. Its role in the local economy is so crucial, he said, that local governments are likely to step in with support.
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Andrew Chan, a credit analyst at Bloomberg Intelligence, said developers backed by local governments are likely to remain under pressure. He pointed to weak homebuyer sentiment, falling property sales and limited fiscal capacity in many localities.
Parallels with Vanke
Huafa’s situation follows China Vanke Co. taking similar steps last year. The source notes that government stimulus for the property market has not yet eased financial pressure on developers.
Huafa helped build Zhuhai Tower, a 330-meter structure in the city.
