There’s Not-So-Good News Buried in China Developers' Fabulous Earnings
- Cash-to-short-term debt levels are the least since 2015
- Buffer is becoming narrower just as record maturity wall looms
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The financial results of Chinese developers this earnings season have been roundly impressive, but there is one metric that should give investors pause: Firms’ ability to service their debt is the weakest in three years.
Cash-to-short-term debt levels at more than 80 publicly traded real estate companies tracked by Bloomberg were 133 percent on average in the first half, the worst since the first six months of 2015 and down from 297 percent a year earlier. Almost a quarter of developers sport a ratio below 50 percent.