(Yicai Global) July 5 -- The operator of the Hong Kong bourse has warned several Chinese property developers, including Sunac China Holdings and China Evergrande Group, about delisting risk if they fail to publish their 2021 earnings reports.

Hong Kong Exchanges and Clearing also sent a notice to Fantasia Holdings Group to warn the Shenzhen-based developer about an imminent delisting if the trading suspension lasts for more than 18 months, Yicai Global learned.

At least 18 Hong Kong-listed property developers or property management firms have begun trading pauses this year because of the lack of audited 2021 earnings reports.

There are no signs of easing. Property developers will have increasing difficulties once risks such as debt defaults become more evident, Huang Lichong, co-founder of financial advisor Synergy Solution Management Group, said to Yicai Global.

Shares of Beijing-based Sunac have been suspended since April 1 as the company was unable to publish its financial data by March 31.

Sunac said then it has not finished compiling its financial statements because of uncertainties regarding offshore loans and fundraisings caused by the downgrading of the company’s credit rating by international rating agencies, as well as the uncertain impacts of its onshore bond renewal.

According to the rules of the Hong Kong Stock Exchange, firms can apply for an extension but the reasons must be good to continue stock trading after 18 months of suspension, Huang said. Sunac's 18 months are up on Sept. 30, 2023.

When debts are not repaid on time, things often start spiraling out of control. Companies' assets are seized and their units are sued, which makes it hard to disclose data about losses as that requires professional opinions and predictions by experts, including legal ones, according to Huang.

Accountants have become particularly cautious regarding real estate firms amid their debt troubles, per Huang. They are likely to apply stricter standards and if irregularities occur, they are not willing to accept and sign the documents so in that case, the developer must change the service provider, Huang explained.

Editors: Tang Shihua, Emmi Laine, Xiao Yi