Evergrande collapse could have a 'domino effect' on China's property sector, AllianceBernstein says - CNBC

China's "highly distressed" real estate companies are at risk of collapse as the country's highly indebted developer Evergrande is on the brink of default, warns AllianceBernstein's Jenny Zeng.

"In the offshore dollar market, there is a considerable large portion of developers (who) are implied to be highly distressed," Zeng said.

While the struggling developers are tiny individually, compared to Evergrande, they make up about 10%-15% of the total market on aggregate, Zeng said.

Some economists have warned that the collapse of Evergrande could become China's "Lehman moment" – a reference to the bankruptcy of Lehman Brothers as a result of the subprime mortgage crisis, which triggered the 2008 global financial crisis.

"On its own, a managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence," MacAdam, a senior global economist at the firm, said in a Thursday note