AutoBeta(AutoBeta.net)09/28 Report--

China Evergrande announced on the evening of September 28 on the Hong Kong Stock Exchange that the company was informed by the relevant departments that Mr. Xu Jiayin, executive director and chairman of the board of directors, had been taken compulsory measures in accordance with the law on suspicion of breaking the law and committing crimes.

On the morning of September 28, three Evergrande companies, China Evergrande, Evergrande Automobile and Evergrande property, issued an announcement that trading of the company's shares was temporarily suspended at 9: 00 a. M.

According to the information, "trading halt" means that the securities trading of the issuer is suspended for no more than two trading days as required or ordered, pending disclosure in accordance with the listing rules of the Hong Kong Stock Exchange. If the trading is suspended for more than two trading days, it will automatically be suspended.

The day before, the share price of Hong Kong stock "Evergrande" suddenly collapsed. As of yesterday's close, China Evergrande shares fell nearly 19 per cent, rising more than 14 per cent at one point, with a total market capitalization of HK $4.2 billion; Evergrande Motor shares closed down 20 per cent, with a total market capitalization of HK $6.1 billion; and Evergrande property shares fell nearly 14.5 per cent, with a total market capitalization of HK $6.4 billion. The total market capitalization of the three platforms is just HK $16.7 billion, less than 1 per cent in their heyday.

In fact, prior to this, the above three "Evergrande departments" are in a state of long-term suspension. It was not until July-August this year that trading resumed successively, that is to say, all three Evergrande companies resumed trading soon. On August 28, China Evergrande, which had been suspended for 17 months, resumed trading on the Hong Kong Stock Exchange. on that day, Evergrande closed at HK $0.35, down 78.79% from its closing price of HK $1.65 in March 2022. Evergrande property resumed trading on August 3, and its shares also plummeted on the first day of trading.

Earlier, Evergrande announced its resumption of trading on July 29, 323 days after the suspension, becoming the first "Evergrande" listed company to resume trading, but its share price plummeted on the first day of trading, closing down 61.25%. It is understood that Evergrande once overtook BYD to become the largest car company in China, with a highest share price of 72.45 Hong Kong dollars. Evergrande was thundered by Evergrande's real estate business. Evergrande, which had not yet spun off its real estate business at that time, was also affected, and its market value has lost 98% since its peak.

From the time line of resumption to suspension, China Evergrande resumed trading for only one month before the temporary suspension, while Evergrande property and Evergrande cars resumed trading for less than two months.

Although we do not know the specific reason for the temporary suspension of trading in Evergrande, China Evergrande is currently saddled with huge debts.

Data show that by the end of 2022, China Evergrande had total liabilities of 2.437412 trillion yuan and total assets of 1.838338 trillion yuan.

According to the latest financial report of China Evergrande, in the first half of this year, China Evergrande's income was about 128.18 billion yuan, gross profit was about 9.8 billion yuan, gross profit was 7.64%, operating loss during the period was 17.38 billion yuan, non-operating loss was 15.03 billion yuan, income tax expenses was 6.84 billion yuan, net loss totaled 39.25 billion yuan. China Evergrande has cash and cash equivalents of about 4.047 billion yuan, of which about 9.334 billion yuan is restricted.

Although Evergrande has less debt than China, it is not optimistic either. The financial report shows that Evergrande has made huge losses for two consecutive years, with a cumulative loss of 84.008 billion yuan, including a net loss of 56.344 billion yuan in 2021 and a net loss of 27.664 billion yuan in 2022. As of December 31, 2022, Evergrande had a cumulative loss of 98.906 billion yuan. In addition, as of the end of 2022, Evergrande's total debt was 183.872 billion yuan, excluding 3.314 billion yuan in advance, the debt was 180.558 billion yuan, while Evergrande's total assets were 115.22 billion yuan. In other words, Evergrande is seriously insolvent.

The latest financial report shows that Evergrande's auto revenue in the first half of this year was 155 million yuan, gross profit loss was 61 million yuan, and net loss was 6.873 billion yuan. Of these, the divestiture of real estate projects lost 1.061 billion yuan, asset disposal, asset impairment and other non-operating losses of 3.716 billion yuan, automobile operating losses of 2.096 billion yuan.

It is unclear whether the temporary suspension will have an impact on Evergrande's car business.

On August 14, China Evergrande announced that Evergrande Motor won the first strategic investment of US $500 million (about RMB 3.6 billion) from Newton Group, which is owned by the United Arab Emirates National Sovereign Fund. Newton Group will subscribe for about 27.5% of Evergrande Motor. China's Evergrande holding proportion will be diluted to about 46.86%, Evergrande will no longer be a non-wholly-owned subsidiary of Evergrande. Its financial results will no longer be consolidated in the performance of Evergrande Group.

According to the plan, all the war investment funds received by Evergrande will be used in Evergrande's Tianjin factory to ensure the normal production of Hengchi 5 and the continuous mass production of Hengchi 6 and 7, and to assist Evergrande in opening up overseas markets. realize the annual export of 30,000 to 50,000 Hengchi vehicles to the Middle East market. At present, Evergrande has only one production model of Hengchi 5, and the data show that Evergrande delivered more than 760 vehicles in the first half of the year.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat