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Evergrande encountered new trouble again. Evergrande New Energy Automobile Investment holding Group Co., Ltd. (hereinafter referred to as "Evergrande New Energy") and its subsidiary Evergrande New Energy vehicle (Jiangsu) Co., Ltd., and the legal representatives of the two companies, Liu Jun and Hao Xinhong, were restricted on consumption. The applicant is Shanxi Hailui Trading Co., Ltd., the cause of the case involves "bill dispute".

The people's Court of Chongchuan District, Nantong City, Jiangsu Province issued a consumption restriction order on April 3, mainly involving Evergrande New Energy Automobile Investment holding Group Co., Ltd. And its subsidiaries, according to Tianyan investigation. According to the court notice, Evergrande New Energy and its subsidiary Evergrande New Energy vehicle (Jiangsu) Co., Ltd. and the legal representatives of the two companies, Liu Jun and Hao Xinhong, have been restricted. According to the announcement, the main reason for the restriction on consumption of the two companies and their legal representatives is the "bill dispute". The trial process of the case shows that the court put the case on file for execution on February 9 this year, and the applicant was Shanxi Hai Rui Trading Co., Ltd., and the two companies were forced to execute 1.05 million yuan as a result of this case. because Evergrande failed to fulfill the payment obligations determined by the effective legal documents within the period specified in the enforcement notice, the court took measures to restrict consumption against Evergrande and its subsidiaries in accordance with relevant laws and regulations. Restrict the company and its legal representatives from high consumption and consumption behaviors that are not necessary for life and work.

Evergrande New Energy Automobile Investment holding Group Co., Ltd.

Evergrande New Energy Automobile (Jiangsu) Co., Ltd.

The court said that if the consumption restriction order is violated and verified to be true, the court will impose a fine or detention in accordance with the relevant provisions of the Civil procedure Law of the people's Republic of China; if the circumstances are serious enough to constitute a crime, he shall be investigated for criminal responsibility according to law.

According to the Tianyang check information of Automotive Industry concern, the major shareholder of Evergrande New Energy is Evergrande New Energy vehicle Holdings (Hong Kong) Co., Ltd., with a shareholding of 99.4%. Evergrande New Energy vehicle Holdings (Hong Kong) Co., Ltd. is a wholly-owned subsidiary of Evergrande Automobile, a listed company in Hong Kong. In other words, Evergrande New Energy, which is restricted this time, is a third-tier subsidiary of Evergrande Automobile.

Evergrande New Energy Automobile Investment holding Group Co., Ltd. is located in Guangzhou, Guangdong Province, established in January 2019, the registered capital is 3.5 billion US dollars, the legal representative is Liu Jun, is an automobile manufacturing enterprise. Tianyan check information shows that as of today, the company has 396 judicial risks, there are a number of equity freezes and information about the person being executed, and the amount of execution is more than 380 million yuan. In detail, among them, 15 cases of the company were executed, with a total amount of 382.929053 million yuan; 112 court announcements; 35 legal proceedings, with a total amount of 7.1046965 million yuan, with the identity of the defendant / appellee of 7.1046965 million yuan; three court announcements; one consumption restriction order for the above events.

As for Evergrande New Energy subsidiary Evergrande New Energy vehicle (Jiangsu) Co., Ltd. is located in Nantong City, Jiangsu Province, established in March 2019, the registered capital is 500 million US dollars, the legal representative is Hao Xinhong, is an enterprise mainly engaged in research and experimental development. According to Tianyan information, as of today, there were 104 judicial risks in the company, of which 8 were executed, with a total amount of 58.747771 million yuan; 5 cases were filed; 1 case was the final case, with a total amount of 16241 yuan; the total amount of non-performance was 16384 yuan, the proportion of non-performance was 100%; there were 4 consumption restriction orders.

Up to now, Evergrande has a total of nine models. On August 3, 2020, Evergrande released six new models: Hengchi 1, Hengchi 2, Hengchi 3, Hengchi 4, Hengchi 5, Hengchi 6, covering not only A-D class models, but also passenger cars, sedan cars, SUV, MPV, crossover cars, etc. On February 10, 2021, Evergrande further released three models: Hengchi 7, Hengchi 8 and Hengchi 9. At this point, nine models have been laid out in the Hengchi product matrix, as a brand of a new car track. Evergrande car layout product speed can be called "amazing", but at present only one model of the Hengchi brand has achieved mass production.

On July 6, 2022, Hengchi brand's first model, "Hengchi 5", officially opened for pre-sale. Only one model of the new car was launched, and the deluxe version was priced at 179000 yuan. Orders for new cars have exceeded 37000 after only 15 days of pre-sale. Liu Yongzhao, president of Hengchi New Energy Automobile Group, has also created momentum for new cars many times, saying that "Hengchi 5 market response is very good, even better than expected. From now on, Hengchi big sales have become a foregone conclusion."

Reviewing the process of Evergrande car-making, it can be said that Evergrande car-building is different from the way of appearance. Evergrande car maker is known as "RMB player", "there is no shortage of money", and even when there is no car, Xu Jiayin is confident that he will become the largest and strongest new energy automobile group in the world in the next three to five years. It also announced the goal of producing and selling 1 million vehicles in 2025 and 5 million in 2035. In November of the second year, Xu Jiayin announced that he would invest 45 billion yuan in car building in the future, including 20 billion yuan in 2019, 15 billion yuan in 2020, and 10 billion yuan in 2021. In the following time, nine products were put out directly, with an "amazing" speed.

Although Xu Jiayin is rich and powerful, he can not escape the fate of "lack of money". Evergrande had previously said that the sales of Hengchi 5 fell short of market expectations, so Evergrande had to start a series of cost cuts to increase efficiency, including reducing the overall number of employees, arranging rest for some employees, wage cuts for some employees and layoffs. Evergrande Automobile Annual report data show that Evergrande Automobile lost 1.429 billion yuan, 4.426 billion yuan and 7.394 billion yuan respectively from 2018 to 2020, that is to say, Evergrande has accumulated 13.249 billion yuan over the past three years. According to the latest financial report, as of December 31, 2021, Evergrande had total assets of 59.521 billion yuan and total liabilities of 58.83 billion yuan, with an asset-liability ratio of 98.84%, which is almost insolvent.

At the end of last month, Evergrande issued an announcement revealing that it had delivered more than 900 Hengchi 5 as of March 23, while informing the outside world that Evergrande would face the risk of shutting down production without access to new liquidity. Evergrande said in an announcement on the same day that in order to concentrate financial resources to support the mass production of Hengchi 5, the company continued to promote cost-saving measures and took the initiative to take downsizing measures to optimize the staff structure of National Electric Vehicle Sweden AB, a Swedish subsidiary of the group. Evergrande New Energy had 2795 employees as of March, compared with 3742 as of June 30, 2022. Evergrande New Energy vehicles will face the risk of stopping production without access to new liquidity, but if the group can seek financing of more than 29 billion yuan in the future, it plans to launch a number of flagship models and is expected to achieve mass production. Under this plan, the cumulative unleveraged cash flow from 2023 to 2026 is expected to reach between minus 7 billion yuan and minus 5 billion yuan.

It is simply understood that if Evergrande does not have access to the new liquidity, it will face a shutdown, and this incident may also have an impact on whether Evergrande can successfully obtain the new liquidity in the future.

So far, Evergrande Automobile shares have been suspended for a year. Evergrande Automobile shares were suspended in April 2022 and have not yet resumed trading so far. At the same time, Tianyan check information shows that, including Evergrande New Energy vehicle Investment holding Group Co., Ltd., Evergrande Hengchi New Energy vehicle (Shanghai) Co., Ltd., Evergrande Fengchi Power Technology (Shenzhen) Co., Ltd., Evergrande Group Co., Ltd., and other related companies have been enforced hundreds of millions of yuan.

New car insurance data show that a total of 975 new cars have been delivered since they were launched, including 519 in 2022 and 456 in the first two months of 2023. At present, Evergrande 5 is in continuous mass production, but judging from the current situation of Evergrande, Evergrande wants to continue to operate normally and mass produce more new cars, which means that Evergrande still needs a lot of "blood transfusion". This also means that if Evergrande does not have access to new liquidity, it will face shutdown, as to whether this incident will have any impact on Evergrande's new liquidity.

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