This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

China Housing and Land Goes Private as Property Market Slumps

Stocks in this article: CHLN HGSH

BEIJING (TheStreet) -- As recently as March, the Nasdaq-listed property developer China Housing and Land Development (CHLN) was still boasting in Securities and Exchange Commission filings about great growth potential in "fast-growing tier II and tier III cities in western China."

But at that time China's real estate market -- a pillar of the nation's economy -- had already started a slump that's continuing today. Hardest hit are smaller cities including the tier II city of Xi'an, where China Housing does most of its building.

Read More: 10 Stocks Carl Icahn Loves in 2014

So it may have been no surprise to anyone who watches China and its U.S-listed companies when China Housing announced Monday a plan to go private and leave the Nasdaq Global Market. Trading was suspended in the stock, which listed in 2006 and was down 27% for the year to date.

A company press release said shareholders would be asked to approve a board plan for "a reverse stock split shares of our common stock, whereby every 50,000 shares of our common stock issued and outstanding will be converted into one whole share of our common stock." Smaller stockholders would get $1.75 per share from the company's cash on hand.

China Housing did not give a reason for the move, but the weakening property market may have played into the decision. The company, in its March SEC filing, said that as of March 31, "we had $14,935,316 in cash, compared to $21,320,071 as of December 31, 2013, a decrease of $6,384,755." It gave no further explanation.

China's years-long real estate boom was fueled by speculation, urbanization and support from governments as well as state banks. The bottom started falling out last year when banks tightened lending, mom-and-pop real estate investors pulled back and developers started slashing prices on new homes to maintain cash flow.

Between January and July, according to a National Bureau of Statistics report released last week, sales of residential floor space fell 9.4% nationwide from the same period last year. Commercial floor space sales declined 7.6%. Sales of whole residential buildings dropped 10%, the bureau said, while office building sales declined 14%.

Read More: Galena Fires CEO Ahn, Offers No Parting Gifts

Meanwhile, a research firm survey of 100 cities found the average price of a new home fell in July for the third consecutive month.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,779.78 +1.63 0.01%
S&P 500 2,067.34 +6.11 0.30%
NASDAQ 4,762.2460 +13.85 0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs