AutoBeta(AutoBeta.net)06/21 Report--

On the evening of June 20, China Evergrande announced that the company is actively promoting the restructuring work, and the company is expected to announce the preliminary restructuring plan before the end of July. The announcement said that the Evergrande property pledge guarantee independent investigation is actively under way, at this stage has not yet determined the expected completion of the independent investigation time. The audit work of the Group is being carried out in an orderly manner, and due to the impact of the epidemic and the independent investigation of Evergrande property pledge guarantee, the company has not yet been able to determine the release time of the 2021 results.

At the same time, China Evergrande, Evergrande property, Evergrande Automobile all issued a notice of guidelines for the resumption of licensing. According to the resumption of trading guidelines, the resumption of trading of Evergrande and Evergrande properties in China need to meet the following four requirements, including the disclosure of all unpublished financial results under the ① listing rules and the resolution of any audit reservations; the pledge guarantee of 13.4 billion yuan of ② Evergrande property is enforced by the relevant banks to conduct an independent investigation, publish the investigation results and take appropriate remedial measures; ③ certifies that the company complies with the relevant provisions of the listing rules. ④ informs the market of all important information so that shareholders and other investors can assess the company's situation. Among them, Evergrande needs to meet the requirements of ①③④ before it can resume its license.

China Evergrande, Evergrande property and Evergrande Automobile all mentioned in the announcement of the resumption guidelines that, according to the listing rules, any stock whose ownership has been suspended for 18 months will be delisted, as far as the company is concerned, the 18-month period will expire on September 30, 2023 (China Evergrande and Evergrande property expire on September 20, 2023) If the company fails to satisfactorily resolve the matters leading to the suspension of trading by the Stock Exchange, meets all the requirements of the resumption guidelines and fully complies with the listing rules, and resumes trading in the shares on or before 30 September 2023 (20 September 2023), the listing Department of the Stock Exchange will recommend that the listing Committee commence the process of delisting the company.

On March 21, China Evergrande, Evergrande property and Evergrande Motor briefly suspended trading on the grounds that "insider information announcements have yet to be published". On March 22nd, China Evergrande, Evergrande property and Evergrande Automobile also disclosed that Evergrande property found that in the course of reviewing the 2021 annual report, the company had about 13.4 billion yuan in deposits that had been forcibly deducted by the relevant banks as the pledge deposit provided by the company.

At the same time, the three Evergrande companies have postponed the publication of their 2021 results reports. Due to the major changes in the operation of Evergrande in China, which is the main real estate sector, since the second half of last year, auditors have added a large number of additional audit procedures this year. Coupled with the impact of COVID-19 's epidemic, according to the information currently available to the company, the audit procedures cannot be completed on schedule. In addition, Evergrande said that with the current operational and financial challenges, especially debt pressure, the company's risk resolution committee is actively studying solutions and communicating with creditors. It is proposed to hire more Jindu law firms as legal advisers to assist the company in debt risk resolution, follow up creditors' demands, and deal with debt problems fairly in accordance with the law.

Since the second half of 2021, a number of Evergrande projects have been taken over by state-owned enterprises, including trust companies such as Minmetals Trust and AVIC Trust, as well as state-owned assets in Shandong, Jiangsu, Zhejiang and Guangzhou. China Railway Construction Investment Group Co., Ltd. listed to transfer 49 percent of its stake in Evergrande Real Estate (Shenzhen) Co., Ltd., with a base price of 2.66 billion yuan, according to the Beijing property Exchange. The remaining 51 per cent is owned by Evergrande real estate group. On June 20, Jiakai City announced that Guangzhou Kailong intends to transfer 2.11% of its shares in Jiakai City to Cao Sheng by way of agreement, with a transfer price of 2.043 yuan per share, with a total consideration of 77.9 million yuan. Upon completion of the deal, Guangzhou Kailong's shareholding will be reduced from 7.58 per cent to 5.46 per cent, while Cao Sheng's shareholding will be 2.11 per cent.

At present, for the heavily indebted Evergrande Group, new energy vehicles have become the last straw, which is an important reason why Evergrande continues to show that it can ensure the mass production of Evergrande cars.

Evergrande car-building, Xu Jiayin can be called a "RMB player", "there is no shortage of money" incisively and vividly. Xu Jiayin summed up Evergrande's car-building philosophy in 15 words: buy, cooperate, circle, big, good. In other words, problems that can be solved with money are not a problem in Xu Jiayin's view. In December 2019, at the signing ceremony of Evergrande Automotive Global Strategic Cooperation, Xu Jiayin called in 206automobile industry leaders and more than 1100 executives of the automobile industry chain. When the dozens of meters long cooperation document table was moved onto the stage, the real estate industry and the auto circle were shocked.

In August 2020, Evergrande ushered in a historic moment, with six cars: Hengchi 1, Hengchi 2, Hengchi 3, Hengchi 4, Hengchi 5 and Hengchi 6, covering A to D classes, as well as passenger cars such as cars, sedan cars, SUV, MPV and crossover cars. The first model will be put into production and launch next year. Evergrande President Liu Yongzhao said at the meeting that Hengchi will start trial production in the first half of next year, mass production will be achieved in the second half of the year, and is confident that Hengchi will quickly seize the market after listing. At that time, Evergrande was in high spirits and Xu Jiayin was full of confidence. According to Xu Jiayin, Evergrande has invested 45 billion yuan in three years, with a sales target of 1 million vehicles in 2025 and 5 million vehicles in 2035, making it the largest and most powerful new energy vehicle group in the world.

The ideal is very full, the reality is very bony, with the Evergrande Group debt crisis, Evergrande not only failed to complete the mass production plan on schedule, and even the new energy vehicle business can be sold. On August 10, 2021, China Evergrande announced that "the company is 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 part of the interests of the company's listed subsidiaries, China Evergrande New Energy Automobile Group Co., Ltd. And Evergrande property Group Co., Ltd. "

Of course, there is still no news about whether the car business will be sold, and Evergrande's mass production cannot tolerate the slightest difference when the Evergrande Group is mired in a debt crisis. Now, Evergrande's biggest goal is to ensure the mass production of Hengchi 5. According to Xu Jiayin's requirements, "the Automobile Group must work hard day and night, work hard for three months, and achieve Hengchi 5 production on June 22, so as to lay a solid foundation for the healthy and sustainable development of Evergrande." However, this goal has been postponed again. On May 18, Hengchi's official Wechat official account issued a "statement": affected by the epidemic, the original mass production time of Hengchi 5 was adjusted to September 20, 2022, and the pre-sale work is in progress.

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