AutoBeta(AutoBeta.net)10/23 Report--

Xu Jiayin, chairman of Evergrande, said at a special meeting on the resumption of work and production of Evergrande Group on October 22 that in principle Evergrande will not buy land for 10 years and cannot sell land cheaply now. In addition, Xu Jiayin also announced three major strategic decisions for Evergrande to resolve risks and save itself: first, to unswervingly and spare no effort to realize the resumption of production and guaranteed delivery of buildings; second, to comprehensively implement existing building sales and greatly reduce the scale of real estate development and construction; and third, to realize the transformation from the real estate industry to the new energy automobile industry within 10 years. The announcement of this strategic decision also means that Evergrande will be dominated by new energy vehicles and supplemented by real estate in the future. It is worth noting that on October 22nd, according to the Shenzhen Stock Exchange, Evergrande Real Estate Group issued an announcement saying that except for the agreement signed by China Evergrande on September 28, 2021 to sell 1753157895 of the illiquid domestic shares of Shengjing Bank Co., Ltd., no significant progress has been made in the sale of China Evergrande assets.

There were earlier media reports that Guoneng Electric vehicle Sweden Co., Ltd., a subsidiary of China Evergrande Group, is in talks with venture capital firms and industry partners in the United States and Europe, including the sale of its Swedish parent company. Subsequently, Evergrande Automotive Group insiders confirmed the authenticity of the report. Some analysts say Evergrande sold Guoneng to reduce debt and cash flow pressure. On October 20, according to the Financial Associated Press, according to people familiar with the matter, "Evergrande Automobile President Liu Yongzhao and several core cadres are talking about war voting, but so far there has been no substantial progress." At the Evergrande Automobile Strategic Partnership Conference on October 11, Evergrande President Liu Yongzhao announced the new progress of Evergrande car building, saying that Evergrande Automobile has launched a three-month battle to ensure that the first model, the Hengchi 5, will be offline at the Tianjin factory early next year. In addition, it also said that the company mobilized core R & D teams and technical elites from Shanghai, Guangzhou, Shenzhen and other places to come to support, with the cooperation and strong support of partners. Evergrande vows to ensure the realization of Hengchi production goal with the greatest determination and maximum efforts.

It is understood that Evergrande Automobile is renamed from Evergrande Health, which includes health business and new energy vehicle business. Earlier, Evergrande Group realized the industrial layout of new energy vehicle R & D and manufacturing, power battery, powertrain and so on through a series of acquisitions. The renamed Evergrande once overtook Great Wall Motor, Xilai Motor and BYD to become the most valuable car company in China. On August 3, 2020, Evergrande released six models: Hengchi 1, Hengchi 2, Hengchi 3, Hengchi 4, Hengchi 5 and Hengchi 6. On February 10, 2021, Evergrande released three models: Hengchi 7, Hengchi 8 and Hengchi 9. Evergrande shares peaked at HK $72.45 in February, with a total market capitalization of HK $640 billion, but its shares fell after the Shanghai auto show. Evergrande's share price has plummeted in the past six months. As of today, Evergrande has a market capitalization of only HK $35.07 billion. Now, Evergrande is also affected by its parent company, China Evergrande Group, which is mired in a debt crisis. On August 10, China Evergrande announced that it was in contact with several potential independent third-party investors to discuss the sale of some of its assets, including, but not limited to, the sale of some interests in the company's listed subsidiaries, China Evergrande New Energy Automobile Group Co., Ltd. And Evergrande property Group Co., Ltd. So far, however, there has been no substantial progress in Evergrande's proposed sale of its assets.

It is not difficult to see that nearly five years have passed since Evergrande announced cross-border construction. Xu Jiayin has said that it will take at least four and a half years from research and development to technological maturity for a brand-new new energy vehicle, and if it takes four or five years for Evergrande to build it, it may miss the best time, so he hopes to "change lanes to overtake" by "spending money". In view of the development and positioning of Evergrande's new energy, Xu Jiayin also indicated that he wants to become the largest and strongest new energy vehicle group in the world in 3-5 years. Now, Xu Jiayin has announced that Evergrande will achieve the transformation from the real estate industry to the new energy vehicle industry within 10 years. From the current point of view, whether Hengda Hengchi 5 can be successfully offline has become the key. According to the New York Times, Daniel Anderson, a partner at law firm Ropes & Gray in Hong Kong, said Evergrande needed capital to start its business and that Evergrande was still at risk of default if the company could not find money to pay for future payments. Earlier, the advantage of Evergrande is that it has sufficient funds, but there are also numerous cases to prove that the automobile industry cannot build good cars with money. under the problems of lack of technology accumulation, lack of brand influence, late start and so on, it remains to be seen whether Evergrande can succeed in building a car in the later stage.

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