[Epoch Times, September 1, 2021](Epoch Times reporter Lai Yiqing reported from Taipei, Taiwan) China’s Evergrande Group’s huge debt has increased market concerns about the company. According to its latest semi-annual report, Evergrande’s Liabilities amounted to 240 billion yuan (about NT$1 trillion). Evergrande admitted on Tuesday (August 31) that if the company fails to attract new investors to inject capital, it is likely to default on debt; at the same time, those wealthy investors who support Evergrande have also paid a heavy price.
Evergrande Group, which is in financial crisis, released its semi-annual report for this year on Tuesday, showing that its net profit in the first half of this year was RMB 10.5 billion, a year-on-year decrease of 28.9%. Among them, the sale of the shares of Hengteng Networks and Jiakaicheng Group under its subsidiary companies effectively increased the net income.
However, this does not change the situation of Evergrande’s funding shortage. Bloomberg reported that Evergrande is selling the equity and assets of listed electric vehicles and property management departments, and is actively seeking new investors to inject capital. In addition, Hengda continued to delay payment to suppliers and contractors, and some of the group’s real estate projects were suspended, indicating that financial problems have affected business operations.
Evergrande also warned in its financial report, “If the relevant project fails to resume work, there may be risks of impairment of the project and impact on the liquidity of the group.” Evergrande’s share price has fallen by about 70% since the beginning of this year; those who have supported Evergrande for a long time The wealthy investors of Evergrande also sold Evergrande shares to stop the bleeding due to the heavy losses in the stock prices of Evergrande Group and its subsidiaries.
Among them, the Chinese Real Estate Group held about 6.5% of Hengda’s equity in recent years, accounting for nearly 40% of the group’s total assets. However, due to the continuous shrinking of Hengda’s stock price in the first half of the year, the estimated book loss was 4.893 billion Hong Kong dollars. In order to stop the loss, even as a cardholder of Xu Jiayin, chairman of Evergrande Group, Chen Kaiyun, wife of Huazhi CEO Liu Luanxiong, recently reduced its shareholding ratio from 9.01% to 8.96%.
In addition, the Chinese Communist Party’s financial supervision department recently interviewed senior executives of Evergrande Group, asking them to resolve debt risks. Investors worry that under pressure from the Chinese Communist Party authorities, the debt-laden Evergrande Group may sell assets at low prices.
Editor in charge: Lumeiqi#
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