AutoBeta(AutoBeta.net)06/22 Report--

Evergrande announced on the Hong Kong Stock Exchange on June 20 that Hengchi 5 had resumed production in May and had delivered more than 1000 vehicles by the end of May. At present, the management of the company is continuing to promote cost-saving measures, actively open up financing channels, and try their best to maintain the sustainable operation of the group.

Hengchi is a new energy car-building project owned by Evergrande Group, dominated by Xu Jiayin, a real estate tycoon who once became the richest man in China. Xu Jiayin also spends a lot of money on car building, and under the car-building mode of "buying", "cooperation", "circle", "big" and "good", the cumulative investment has reached nearly 50 billion yuan. According to Xu Jiayin's previous plan, Evergrande hopes to achieve annual production and sales of more than 1 million vehicles by 2025 and more than 5 million by 2035, and strive to become the largest and most powerful new energy vehicle group in the world. "

In August 2020, Evergrande simultaneously released six pure electric models in Shanghai and Guangzhou, covering all levels from A to D, covering cars, sedan cars, SUV, MPV, crossover and other categories. Evergrande made its debut at the Shanghai Auto Show in April 2021, when Evergrande was not yet in mass production, but immediately following the car-building boom, it once overtook BYD to become the most valuable car company in China. In July 2022, the first production car Hengchi 5 was officially pre-sold, and the deluxe version was pre-sold for 179000 yuan. At the press conference, Liu Yongzhao, president of Hengchi New Energy Automobile Group, praised that "Hengchi 5 is the best pure electric SUV within 300000, and Hengchi's big sale has become a foregone conclusion."

After the delivery of the Hengchi 5, officials had said that within 15 days after the pre-sale of the new car, the order had exceeded 37000, and the first batch of 10, 000 would be delivered by the first quarter of 2023.

On December 30, 2022, Evergrande's announcement on the Hong Kong Stock Exchange burst the dream bubble. Evergrande said the Hengchi 5 was in mass production and had delivered 324 units to users. In addition, in order to save costs, the Group is implementing a series of cost-saving measures, including reducing the overall number of employees, arranging some employees to take a break, reducing the wages of some employees, and so on. The Group will continue to create favorable conditions for the mass production of Hengchi 5 with maximum efforts.

On March 23, 2023, China Evergrande announced on the Hong Kong Stock Exchange that Evergrande New Energy vehicles had taken measures to cut costs in order to maintain basic business operations due to tight liquidity. In the absence of additional liquidity, Evergrande New Energy vehicles will face the risk of stopping production, 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 hopes to achieve mass production.

Although Hengchi has delivered in mass production, it has delivered only more than 1000 vehicles since October 29th. Compared with the announced 37000 orders, it will take 230 months to deliver the orders received within half a month of pre-sale, which is definitely not possible. For Evergrande, it can only increase production capacity to speed up the delivery process, but because of its own situation, even if production capacity is raised, Evergrande still has to consider, who should Evergrande sell its products to?

At present, the competition in the new energy vehicle industry is extremely fierce, and many multinational joint venture brands are struggling, not to mention the heavily indebted real estate cross-border car companies, while returning to the product itself, Hengchi 5 positioning compact pure electric SUV is not expensive compared with the same class of models, and the product configuration is not very poor, not to mention well-known supply chain manufacturers such as Bosch, mainland, Ambofo and Ningde era to participate in the production. However, Hengchi has not formed its own advantages. Hengchi 5's power, range, and auxiliary driving can only be regarded as regular, but it does not have many unique bright spots. Compared with BYD, Tesla and other brand products, it is difficult to show enough competitiveness. In addition, the most important thing is that China Evergrande is heavily in debt, and how to persuade consumers to buy the products of such a company is another big problem that Evergrande needs to face.

At present, Evergrande Automobile and China Evergrande are still suspended from trading, and the company is expected to release its 2021, 2022 and 2022 results report before July 31.

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