AutoBeta(AutoBeta.net)10/05 Report--

According to an announcement issued by IMA on the Hong Kong Stock Exchange, 3 million Evergrande shares were sold on the open market at an average price of about HK $3.84 per Evergrande (00708) shares on October 4, 2021, cashing out a total of about HK $11.52 million. After the completion of the sale, the company did not hold any shares in Evergrande. It is understood that the sale of 3 million Evergrande shares is equivalent to about 0.03 per cent of Evergrande's issued shares on the date of this announcement.

In the morning yesterday, China Evergrande, Evergrande property at the same time announced a temporary suspension, has not yet announced the reasons for the suspension. Subsequently, the media quoted people familiar with the matter as saying that Hesheng Chuangzhan intends to acquire about 51 per cent of Evergrande property and acquire a controlling stake in Evergrande property, with a transaction value of more than HK $40 billion. However, Hesheng Creative Exhibition said, "everything is subject to the announcement, there is no more information to disclose"; so far, Evergrande property and China Evergrande have not responded. It is worth noting that yesterday, the real estate giant 0754.HK also announced that it would stop trading from this morning, pending a major deal to acquire shares in a company listed on the Stock Exchange. It is understood that behind the Hesheng Innovation Exhibition is the Zhu Mengyi family, which helped Wang Jianlin out of difficulties in 2017 and spent a lot of money to acquire five Wanda Plaza assets. By the end of June this year, the cash and cash equivalents in the Hesheng Innovation account controlled by the Zhu Mengyi family reached 39.76 billion Hong Kong dollars. Or affected by the news, Evergrande, which was not suspended yesterday, drove low and went high. Evergrande closed at HK $3.9 per share, up 15.9 per cent.

Recently, Evergrande has also been deeply affected by the debt crisis of the Evergrande Group. As early as September 21, Evergrande issued an announcement on the Hong Kong Stock Exchange that the company has granted share options to some independent non-executive directors of the company and some scientific and technical employees of the group in accordance with the share option plan it adopted on June 6, 2018. After the grantee accepts the share option, the share option will give the grantee the right. The subscription company has a total of 323.72 million new shares, equivalent to about 3.31% of all issued shares of the company as at the date of this announcement, involving 3 directors and 3180 employees. On September 24, Evergrande issued an announcement saying, "in view of the group's liquidity problems, there are delays in the payment of suppliers and project payments in the living space of Evergrande Health Valley and new energy vehicles, resulting in the suspension of some related projects." As of the announcement, the Group has not made significant progress in striving for the resumption of work for some projects. On the evening of September 26, Evergrande announced that after careful consideration, both the company and Haitong Securities Co., Ltd. agreed to terminate the listing counseling agreement and will report to the Shenzhen Regulatory Bureau of the China Securities Regulatory Commission. Therefore, the proposed issuance of RMB shares will not continue. On September 30, according to several media reports, many employees of Evergrande will take a paid rotation after the National Day. From a market point of view, Evergrande's series of operations did not get it out of trouble, and its share price is now trading at more than 600 billion Hong Kong dollars from its peak of 72.45 Hong Kong dollars per share in February.

It is worth noting that under the influence of a series of news from Evergrande Group, a number of companies have announced that they will sell Evergrande shares on the open market. Yesterday, Blue River Holdings announced that a total of 18.29 million Evergrande (00708) shares were sold on the open market on October 4, 2021, for a total consideration of about HK $59.1 million, equivalent to about HK $3.23 per Evergrande share. In addition, China Strategic Group recently announced that Jiazhi, an indirect wholly-owned subsidiary of the company, sold a total of 70 million Evergrande shares to the buyer through block transactions on the Stock Exchange on September 29, 2021 for a total consideration of HK $159.6 million (excluding transaction costs). The selling price of each of the sold shares (excluding transaction costs) is HK $2.28.

It is not difficult to see that Evergrande is in deep financial difficulties and is trying to solve the liquidity problem by introducing strategic investors and asset sales. But the capital market does not seem to be optimistic about the future of Evergrande, and even though its share price is rising, a large number of Evergrande shares have been sold.

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