Debt of 2.44 trillion yuan, loss of more than 800 billion yuan, Evergrande Group issued 3 financial reports late at night
The continuous financial turmoil of Evergrande Group has taken a turn for the worse as the company disclosed its latest financial reports, which reveal staggering liabilities and substantial losses. The reports confirm widespread concerns that the company is insolvent.
According to the reissued 2021 annual report, 2022 semi-annual report, and 2022 annual report, Evergrande Group’s total liabilities amount to a staggering 2.44 trillion yuan. However, after excluding contract liabilities, the remaining liabilities stand at 1.72 trillion yuan. These liabilities include loans, trade accounts payable, and other payables, with a significant portion allocated to construction materials payable.
In terms of assets, the group’s total holdings amount to 1.84 trillion yuan. Although the company holds liquid assets worth 1.67 trillion yuan, including 4.334 billion yuan in cash and cash equivalents, the majority of its assets are tied up in property projects under development. This precarious situation leaves Evergrande with insufficient liquidity for its current assets.
The income statement reveals that Evergrande Group has been experiencing immense losses over the years. In 2021 and 2022, the company suffered cumulative losses of 812 billion yuan. The net loss for 2021 was a staggering 686.22 billion yuan, primarily due to inventory impairment and operating losses. The losses in 2022 amount to 125.81 billion yuan, with operating losses accounting for the majority.
The belated annual reports have raised concerns among external auditors, who have been unable to express their opinions due to the company’s “multiple uncertain factors related to continuous operation” and the inadequate financial information provided by Evergrande.
Looking ahead, Evergrande Group aims to ensure the delivery of buildings, focus on new energy vehicles and property services, explore efficient disposal and revitalization of core assets, and mitigate risks. The group, which consists of China Evergrande, Evergrande Property, and Evergrande Automobile, has already reissued annual reports for China Evergrande and Evergrande Property. The reissue of Evergrande Automotive’s annual report is scheduled for July 26.
Considering the alarming financial state of Evergrande Group, trading in the company’s shares will remain suspended until further notice. This decision follows the halt in trading on the Stock Exchange since March 21, 2022.
The disclosure of Evergrande Group’s financial reports has sent shockwaves through the market, with investors and observers closely monitoring the future developments of the embattled company. The debt of 2.44 trillion yuan and cumulative losses exceeding 800 billion yuan have raised questions about the ability of Evergrande Group to bounce back from its current financial crisis.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are advised to proceed at their own risk. Source: Securities Times. Article author: Zhang Zhibo.