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Yesterday, in the 353rd batch of "Road Motor vehicle production Enterprises and Product announcement" vehicle new product publicity list released on the official website of the Ministry of Industry and Information Technology, "Hengchi 5", which completed the first car off the line not long ago, appeared again in the list. Again, it is because of the 350 vehicle product announcements of the Ministry of Industry and Information Technology in 2021, Hengchi 5 once appeared in the publicity list, but in the end, it was unexpected that it did not pass the publicity, and there was no Hengchi model information in the final official product announcement of the Ministry of Industry and Information Technology, which meant that Hengchi 5 was not selected in the current product list, Evergrande did not announce the reasons for the absence of the official list, and the expectations of the outside world failed.

According to external analysis, product publicity is a necessary audit procedure before automobile products are put on the market. Mature products will soon be put into the market after entering this procedure, and it is unusual to enter the publicity and fail to pass. This may be closely related to the situation of China Evergrande itself at that time.

China Evergrande is the largest real estate developer in China, but in the past two years, the state has made a clear definition on the development of real estate: "Housing is for living, not for speculation." and began to strictly control the way real estate enterprises use leveraged large loans to develop, drawing three red lines for real estate enterprises: excluding advance payments, the asset-liability ratio is not more than 70%; the net debt ratio is not more than 100%; and the cash-to-short debt ratio is not less than one. Regulators stipulate that if all the above three indicators "step on the line", interest-bearing liabilities shall not increase; if two of the indicators "step on the line", the annual growth rate of interest-bearing liabilities shall not exceed 5%. As we all know, it is through the use of financial leverage that real estate enterprises achieve rapid development and bear huge responsibilities.

The month after drawing three red lines, Evergrande has already shown some signs of problems. In September 2020, Evergrande began selling houses at reduced prices, and the Bank of China, Agricultural Bank of China, China Construction Bank and Industrial and Commercial Bank of China reviewed their exposure to Evergrande to measure their impact. In the four months after September 2020 alone, Evergrande used its own funds to repay debt in advance four times, with a cumulative debt repayment of more than HK $47.7 billion, which is obviously not enough to get Evergrande out of trouble. On October 13, 2020, Evergrande announced that it would raise at least 4.3 billion Hong Kong dollars (US $555 million) through a rights issue and 2.1 billion yuan through domestic bills; on November 1, 2020, Evergrande Group sold its 40.984% stake in Guanghui Group to Shenneng Group, cashing out 14.85 billion yuan; on June 25, 2021, Evergrande Group sold its 100%-owned Evergrande Culture. On Aug. 2, 2021, Evergrande said it planned to sell 120 billion yuan of assets, including its old renovation project in Shenzhen. But it is a drop in the bucket. In the first half of 2021, China Evergrande achieved revenue of 224.066 billion yuan, down 16.69% from a year earlier. In 2020, operating income increased by only 6.45% compared with the same period last year. The financial report shows that as of June 30, 2021, China Evergrande has current liabilities of 1.57 trillion yuan and non-current liabilities of 390 billion yuan, totaling nearly 2 trillion yuan.

At the same time, Evergrande is also promoting the listing of Evergrande property and Evergrande Automobile, which was renamed from Evergrande Health. Grand Health and new energy vehicles are hot industries in recent years, but Evergrande is obviously more optimistic about the development of new energy vehicle industry, or the industry built by Evergrande Automobile will look more ambitious in terms of volume. On September 1, 2021, the name of Evergrande Health Stock was officially changed to Evergrande Automobile. The simple renaming operation really made Evergrande Motor catch the theme in that half a year, and its share price soared from a few Hong Kong dollars to about HK $60, with a market capitalization of 400 billion.

Of course, Evergrande has repeatedly stressed that it will take 10 years to fully transform into a new energy vehicle source, and it has indeed acquired a system of technology and factories needed by automobile companies through "buying and selling". This model is very different from the natural deposition of most car companies, or at least developed from the same industry, so it has also attracted a lot of questions. Shen Hui, CEO of Weimar, said: Evergrande is short of cars. According to the financial report at that time, Evergrande's health management income accounted for 98.82%, while the revenue of new energy vehicles accounted for only 1.18%. Shen Hui's evaluation is not excessive.

On June 30, 2021, Evergrande announced that it had successfully reduced its total debt to US $88.2 billion and its net debt ratio to less than 100%. But at this time, Evergrande's share price has been prototype, on the one hand, Evergrande itself is in a debt crisis, on the other hand, there is no news of Evergrande's products. Until October and November 2011, Evergrande began to cheer up and decided to work hard for three months to realize its initial promise to realize the model off the line by the end of 2021, which is a back-to-back battle of Evergrande. In order to achieve this meaningful product off-line, Evergrande concentrated all its core resources into the prototype product research and development of Hengchi 5 in Tianjin factory in the case of most factories and some employees. It is against this background that Hengchi 5 appeared in the public catalogue of 350 batches.

On the evening of December 3, 2021, China Evergrande announced that it was unable to fulfill an overseas guarantee obligation of US $260 million, which was not worth mentioning in Evergrande's huge debt, but it meant that Evergrande formally admitted to default on its debt. two hours after the announcement, the Guangdong provincial government interviewed Xu Jiayin and decided to send a working group to Evergrande. Evergrande shares fell nearly 20 per cent the following trading day. During the same period of time, Hengchi 5 did not pass the public announcement, but obviously, Evergrande will not give up. In the last few days of 2021, Hengchi used several pieces of final assembly workshop to run through, and the offline of Hengchi 5 hinted to the outside world its progress. But we in the automobile industry, in a short time to see the scenery of an enterprise unlimited to the bottom of the valley, it is rare.

In early 2022, the Central Bank and the Bancassurance Regulatory Commission jointly issued a notice on mergers and acquisitions of financial services for key real estate enterprise risk management projects. The market believes that although the general direction of "housing speculation" and the "three red lines" will not change, the pressure on the real estate market has been alleviated. At this time, Evergrande also announced that it would put forward a preliminary restructuring plan within six months, indicating that a plan to deal with Evergrande's debt problems will be put in place. Although Evergrande's debt problem has begun to be far from over, people have begun to get used to the difficulties Evergrande faces. Evergrande's share price has also climbed slowly from the trough. Hengchi 5 has re-entered the catalogue announced by the Ministry of Industry and Information Technology. Hengchi 5 will successfully enter the market through publicity, and how it sells is another story.

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