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In recent years, Yang Huiyan, the chair of Chinese real estate giant Country Garden, has experienced a significant decline in her wealth. Over the past two years, her net worth has plummeted by a staggering $24.8 billion, largely due to the drop in shares of Country Garden, which have reached an all-time low. This turn of events marks a dramatic reversal for Yang, who was once hailed as the world's youngest female billionaire when she made her debut on the wealth rankings in 2007 at the age of 26.[0]
The impact of this decline in wealth has been devastating for Yang Huiyan, once considered China's richest woman.[1] As the chairperson of Country Garden, she has seen her fortunes decrease by more than 80% since June 2021, falling from a peak of $28.6 billion to $5.5 billion.[1] Her father, Yang Guoqiang, who founded Country Garden, had transferred a 70% stake in the company to her in 2007 before its initial public offering.[1] However, due to his age, he has since stepped back from the company.[1]
According to Bloomberg's Billionaire Index, Yang Huiyan has lost 84% of her wealth, making her one of the biggest losers in terms of wealth among billionaires worldwide. The decline in her wealth can be attributed to the economic crisis brought on by the pandemic, which has resulted in a loss of approximately $28.4 billion in revenue.
The situation has become increasingly dire for Yang Huiyan, as her building conglomerate, Country Garden, teeters on the edge of default. The company's shares have fallen 23% in Hong Kong, following news that it has missed interest payments on two U.S. dollar bonds. Although Country Garden still has a grace period of 30 days before a default can be triggered, the decline in the company's shares has contributed to Yang's significant loss of wealth.[0]
Yang's wealth is primarily derived from her 57% stake in Country Garden.[1] The company's shares fell 23% in Hong Kong this week, as it failed to pay $22.5 million that was due on August 6. This decline in shares has directly impacted Yang's net worth, which reached its peak at $29.6 billion in 2021.
The financial troubles faced by Country Garden have also had a wider impact on the Chinese property sector. As one of China's leading developers, the company's missed interest payments and declining shares have caused investor interest in the sector to dwindle.[2] Shares in the construction market in Hong Kong have plunged 16% as a result of these developments.[3]
The decline in Country Garden's shares has been accompanied by a series of other setbacks for the company.[0] Moody's recently downgraded its rating to B1 from Ba3, placing it in junk territory. The company also canceled a $300 million share sale and capital raising, further exacerbating its liquidity concerns.
The challenges faced by Country Garden reflect the larger struggles of the Chinese property market. Contracted sales at the country's top 100 developers have plunged 33% from a year earlier, indicating the impact of the economic crisis on the industry.[4] The decline in gross profit margins, forex fluctuations, and the downward trend in the real estate market have all contributed to Country Garden's financial woes.
The potential default of Country Garden is a cause for concern, as it could have far-reaching effects on China's housing market. With four times as many projects as Evergrande, another troubled developer, a debt crisis at Country Garden could significantly weaken buyer confidence in solvent private developers. The company is currently seeking funds to resolve its debt crunch while aiming to protect the rights of its creditors.
Overall, the decline in Yang Huiyan's wealth and the financial troubles faced by Country Garden highlight the challenges in the Chinese real estate market. As the company fights to overcome its liquidity concerns and the wider economic crisis, the future remains uncertain for Yang and the once-prominent real estate giant.
0. “World's Onetime Youngest Female Billionaire Sees Wealth Plunge 82% As Default Risks Grow” Forbes, 10 Aug. 2023, https://www.forbes.com/sites/ywang/2023/08/10/worlds-onetime-youngest-female-billionaire-sees-wealth-plunge-82-as-default-risks-grow/
1. “China's Largest Developer on Precipice of Default” RealMoney, 10 Aug. 2023, https://realmoney.thestreet.com/investing/global-equity/china-s-largest-developer-on-precipice-of-default-16130720
2. “Top Chinese Real Estate Developer Yang Huiyan Loses 84% of Her Wealth” Market Realist, 10 Aug. 2023, https://marketrealist.com/how-much-money-did-country-gardens-yang-huiyan-recently-lost/
3. “She lost more money than anyone on Bloomberg's billionaires list since Covid. China's property crisis is to blame” KAKE, 9 Aug. 2023, https://www.kake.com/story/49385740/she-lost-more-money-than-anyone-on-bloombergs-billionaires-list-since-covid-chinas-property-crisis-is-to-blame
4. “Bonds of China's Largest Property Developer Crash to 25 Percent of Notional Value – MishTalk” Mish Talk, 10 Aug. 2023, https://mishtalk.com/economics/bonds-of-chinas-largest-property-developer-crash-to-25-percent-of-notional-value
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