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Evergrande resumed its license, plummeting by 60%.

2024-03-04 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)07/30 Report--

After 323 days of suspension, Evergrande finally announced the resumption of trading, becoming the first "Evergrande" company to resume trading, and it "lived up to expectations", as the market expected, its share price plummeted on the first day, closing down 61.25% to close at HK $1.24 per share, with a total market capitalization of only HK $13.44 billion.

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In August 2020, Evergrande launched six new cars in Shanghai and Guangzhou, namely, Hengchi 1, Hengchi 2, Hengchi 3, Hengchi 4, Hengchi 5, Hengchi 6, with great fanfare. Since then, Evergrande's share price has soared, from HK $10.80 in July 2020 to HK $72.25 in February 2021, with a maximum market capitalization of HK $785.6 billion, surpassing BYD to become the largest carmaker in China. Evergrande had not yet had a single model on the market.

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In April 2021, Evergrande took part in the Shanghai auto show for the first time, with nine models on display at the same time. The scene of the auto show was jammed with heat comparable to that of Tesla, who was then activist. However, Evergrande's highlight moment also stayed at this moment forever, and then accompanied by the thunderstorm of Evergrande's real estate business, Evergrande, which had not yet been spun off at the time, was also affected, and its market capitalization has lost 98% from its peak.

Before the suspension, Evergrande's share price was HK $3.20 per share, with a total market capitalization of HK $34.7 billion. Evergrande began to suspend trading indefinitely on April 1, 2022, and has been suspended for a total of 323 days when trading resumed on July 28, 2023. According to HKEx regulations, listed companies will be delisted if their trading has been suspended for more than 18 months, that is, Evergrande will be forced to delist if it does not resume trading in September this year.

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Evergrande did go through a lot during the suspension. In July 2022, Hengchi 5, the first volume production car under New Energy, officially opened its pre-sale, and the group president directly shouted the slogan "Hengchi 5 only sells 179000, and big sales have become a foregone conclusion." The following month, Evergrande may have been acquired by another car company, but was quickly denied by the group. Since then, Evergrande layoffs, dissolution and other news emerge one after another. In December 2022, Evergrande revealed that the Hengchi 5 delivered a total of 324 vehicles in the two months after its launch.

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A few days ago, Evergrande released its two-year report card, and the future development is worrying. The financial report shows that Evergrande has an annual net loss of 56.34 billion yuan in 2021 and a net loss of 27.66 billion yuan in 2022, with a cumulative loss of 84.01 billion yuan in two years. In fact, since Evergrande announced the construction of the car, it has lost a total of 98.91 billion yuan, including 1.43 billion yuan, 4.43 billion yuan and 7.39 billion yuan respectively from 2018 to 2020.

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Evergrande Automobile

Since the announcement of car construction, Evergrande has planned a total of nine models, including Hengchi 1 and Hengchi 2, etc., but in fact, only Hengchi 5 has really achieved mass production and listing, and so far the cumulative delivery has only exceeded 1000, which is equivalent to a loss of almost 100 million on the sale of a car, and Evergrande's car-building path is also a record in the industry.

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Previously, Evergrande had given "three major goals". The scale goal is to build Evergrande into the largest and strongest new energy vehicle group in the world, with annual production and sales of more than 1 million vehicles by 2025 and more than 5 million by 2035. Of course, there is a good chance that this goal will fail.

According to the financial report, Evergrande's total debt in 2022 is 183.87 billion, while the total assets are only 115.22 billion, which is properly insolvent. At present, Evergrande has little money left, leaving only 220 million yuan in cash and cash equivalents by the end of 2022, compared with 2.453 billion in 2021.

Evergrande said it "has a viable and sustainable business and has valuable assets to support its operations", allowing the company to remain listed. Industry insiders said that the resumption of Evergrande's license is crucial to the implementation of Evergrande's debt restructuring, as Evergrande's stake has been part of Evergrande's overall offshore debt restructuring plan.

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