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Stop trading! A new car-building force suspended its trading briefly again.

2024-06-25 Update From: AutoBeta NAV: AutoBeta > News >


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Evergrande suddenly suspended its license from 10:56 on May 17, according to the website of the Hong Kong Stock Exchange. It is worth mentioning that Evergrande's shares soared 70 per cent in intraday trading before trading was suspended. At the time of the suspension, Evergrande's share price was still soaring, with a market capitalization of HK $4.121 billion and a market capitalization of HK $4.121 billion.

Evergrande has not made any response to the sudden suspension.

Although the authorities have not yet responded, it has still sparked a heated debate in the market. After all, Evergrande also had a sudden temporary suspension earlier, and every suspension was a major event. Last September, Evergrande suddenly suspended its license plate. Subsequently, the official responded to the reason for the suspension: the reason for the suspension was that the company had been informed by the relevant departments that Mr. Xu Jiayin, the company's executive director, had been taken compulsory measures in accordance with the law because he was suspected of breaking the law and committing a crime. On January 8 this year, Evergrande's license was suspended briefly again because its executives were suspected of breaking the law and committing crimes. At that time, Evergrande issued a notice saying: Liu Yongzhao, executive director of Evergrande Automobile, has been criminally detained in accordance with the law on suspicion of breaking the law and committing a crime.

It is understood that "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. For Evergrande's temporary suspension, many netizens said or suspected of hype. Some netizens also pointed out that the stock price is skyrocketing, maybe Evergrande wants to make a big move.

Of course, what is the reason for the temporary suspension has yet to be officially announced. However, judging from the recent situation of Evergrande, it is not very optimistic.

On April 5, Evergrande announced the termination of its strategic investment cooperation with Newton Group, which also means that Evergrande has lost 500 million US dollars of support from big financiers. As we all know, in recent years, the financial situation of Evergrande has been in a shortage.

At the same time, losses are increasing. The data show that as of December 31, 2023, Evergrande's total automobile assets were 34.851 billion yuan and liabilities were 72.543 billion yuan, including 26.484 billion yuan in loans, 43.012 billion yuan in trade and other payables and 3.047 billion yuan in other liabilities. It is not difficult to see that Evergrande is now in an insolvent situation. To this end, Evergrande also announced the suspension of production in March. The official said: the suspension of production is mainly affected by external and internal factors, production and sales are not up to expectations, and the company is facing operational difficulties.

Due to the shortage of funds, while there is no way to produce self-hematopoietic ability, while facing the fierce competition in the domestic new energy vehicle market, it is not easy for Evergrande to turn around. At present, only Hengchi 5 is on sale at Evergrande, which went on sale in August 2022 as a compact pure electric SUV with a price of 179000 yuan. Although the price of the Hengchi 5 is not high compared with the same class of models, and the product configuration is OK, because China Evergrande is heavily in debt, it also makes consumers worry about the future of Evergrande, thus affecting the sales of the Hengchi 5. Data show that as of December 31, 2023, the cumulative sales of Hengchi 5 was 1389 vehicles.

In addition, Evergrande car managers are frequently suspected of breaking the law and committing crimes, which is even worse for Evergrande Automobile. The deadliest blow for Evergrande is the failure of hand-in-hand cooperation with Newton. at this stage, Evergrande wants to continue to walk down, and solving the financial pressure is the key to Evergrande's urgent solution. but there is not much time in front of Evergrande.

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