Shares of Sunac China Holdings Ltd. (01918) plummeted by nearly 28% on Wednesday, October 17, as the Chinese property developer announced plans to raise around HK$1.2 billion through a discounted share placement and subscription. The sharp decline in the company's stock price reflects investor concerns over the dilutive impact of the share offering and the broader challenges facing the real estate sector in China.

Sunac China revealed that it would issue up to 489 million new shares at a price of HK$2.465 per share, representing a 20% discount to the previous closing price. The proceeds from the share offering will be used to support the company's debt management efforts and address its onshore corporate bonds.

The move to raise additional capital through an equity offering is a rare one among Chinese developers, as the industry grapples with tightening regulations and a sluggish property market. Sunac China, once China's fourth-largest developer by sales, has faced significant headwinds, reporting a net loss of 14.96 billion yuan ($2.1 billion) for the first half of 2024 and a 41% decline in revenue.