Zhenro’s Communication Has Hurt Investor Confidence: Lucror

Published 17 February 2022, 07:46:30.444 GMT

(Bloomberg) -- Poor investor communications this week “resulted in an evaporation of confidence” in Chinese builder Zhenro, said Leonard Law of Lucror Analytics.

* “Management failed to dispel last Friday’s rumors” about it possibly not proceeding with an announced $200m perpetual-bond redemption with a “very generic announcement that did not clarify if it will” do so: Law

* “The company could be assessing the situation internally and exploring its options about whether to call its perp as planned” Law

* He said that given the property sector’s ongoing struggles, “it would be understandable if Zhenro wishes to conserve its cash”

* As it’s uncommon for firms to not follow through on an announcement to redeem a bond, Zhenro failing to do so could have contagion effects and potentially undermine investor trust in weak developers: Law

By Wei Zhou