Nomura with the note (Tu Ling has been better than most on this):
Despite Beijing’s efforts to alleviate the funding crunch for developers, we expect developers and their construction partners to face some increasing financial challenges in the next couple of months. First, they may need to pay a total of RMB1.1trn in deferred wages to migrant construction workers before 31 January, the end of the Chinese lunar year. Second, local governments have been tightening their grip on presale funds in escrow bank accounts. Third, their maturing offshore dollar bonds will almost double in Q1 and Q2 2022 from Q4 this year. Developers specializing in lower-tier cities will especially
be faced with difficulties, as new home sales there have halved from a year ago. Despite Beijing’s easing measures on the property sector, the PBoC’s RRR cut and the latest 5bp cut of LPR, we believe the worst is yet to come for the economy in general and the property sector in particular.
The lunar calendar and migrant construction workers’ deferred wages
