China Fund News, Chenxi
On Friday evening, Hengda had another big news!
The first is that China Evergrande announced on the Hong Kong Stock Exchange that it has fulfilled various resumption guidelines, including the publication of all unpublished financial results required by the listing rules and the resolution of any audit qualified opinions. The company has applied to the Stock Exchange to resume trading in the company’s shares from 9:00 am on August 28, 2023.
Before China Evergrande, Hengda Automobile and Hengda Property have resumed trading successively. Hengda Automobile resumed trading by nearly 70% on the day, and Hengda Property resumed trading by nearly 50%. Before the suspension, China Evergrande’s share price had fallen to HK $1.65 per share, with a total market value of 21.80 billion Hong Kong dollars. The performance of China Evergrande’s share price next Monday will attract great attention from the market.
In addition, tonight Hengda Automobile also announced the performance of the first half of 2023: the first half of the group’s revenue was 155 million yuan, net loss 6.873 billion yuan, a year-on-year loss of 48.6%. As of June 30, the company’s net debt fell to 32.84 billion yuan.
So here it is.
China Evergrande officially announced the resumption of trading
Trading will resume next Monday
After Hengda Property and Hengda Automobile, China Hengda will finally resume trading.
On the evening of August 25, China Evergrande announced on the Hong Kong Stock Exchange that the company has fulfilled various resumption guidelines and has applied to the Stock Exchange to resume trading of the company’s shares from 9:00 am on August 28, 2023.
In order to resume trading, China Evergrande issued a one-time reissue of its financial results for 2021, the first half of 2022 and the full year of 2022 on July 17.
Among them, in 2021, China Evergrande’s annual revenue was 2500.1 billion yuan, with a net loss of 686.22 billion yuan. In 2022, the loss was reduced. The revenue recorded in that year was 2300.7 billion yuan, and the net loss was 125.81 billion yuan. That is, China Evergrande’s total net loss for two years reached 812 billion yuan. In terms of liabilities, as of the end of 2022, China Evergrande’s total liabilities were 2.43741 trillion yuan, and 1.71639 trillion yuan after excluding 721.02 billion yuan of contractual liabilities.
In January this year, China Evergrande replaced its auditor: PricewaterhouseCoopers (PricewaterhouseCoopers) resigned and appointed Shanghai Parkson PricewaterhouseCoopers Co., Ltd. as the new auditor. In the resumption guidelines, the new auditor gave solutions/solutions to all 9 matters raised by the predecessor. The board of directors of China Evergrande believes that the matters raised by Luo PricewaterhouseCoopers in his resignation letter have been fully resolved and believes that the company has fully fulfilled the resumption guidelines.
In addition, regarding the situation that Hengda’s 13.40 billion yuan pledge guarantee was enforced by the relevant banks, China Evergrande gave further investigation results: among the directors during the relevant period, Xu Jiayin, Xia Haijun and Pan Darong were able to contact and hold relevant documents. Some documents related to the pledge guarantee arrangement were signed by Xu Jiayin, but Xu Jiayin said that the signing was only a process and denied any knowledge of the pledge guarantee arrangement.
In July last year, China Hengda had announced that due to Hengda property 13.40 billion yuan deposit pledge was the relevant bank enforcement matters, the company’s executive director and chief executive officer Xia Haijun, executive director and chief financial officer Pan Darong, subsidiary Hengda Group Co., Ltd. executive president Ke Peng, has been asked to resign the relevant positions.
According to the independent investigation results, both Xia Haijun and Ke Peng have left, and Pan Darong has been transferred to a company under Evergrande as an ordinary employee. Therefore, the board of directors believes that there are no regulatory concerns about the integrity of the company’s management and has fulfilled the requirements of the resumption of trading guidelines.
732 construction projects resumed
Total assets 1.74 trillion yuan
In order to demonstrate that the company has sufficient business operations, China Evergrande has also released a number of business data.
China Evergrande said that the company takes stable operation and risk as the first priority, and actively promotes the work of the protection building with the greatest strength. It has obtained the understanding and support of various parties, including local governments, upstream and downstream enterprises, owners, etc., and has realized the full resumption of 732 protection building projects. A total of 301,000 sets of buildings will be handed over in 2022. The cultural tourism project on Haihua Island in Hainan, China has been operating steadily and has received more than 7.60 million tourists.
As of June 30, 2023, China Evergrande Group has a land bank of 190 million square meters. In addition, the Group is also involved in 78 old renovation projects, including 55 in the Greater Bay Area (34 in Shenzhen) and 23 in other cities.
China Evergrande said that the company’s current sources of Working Funds are mainly rescue fund loans provided by local governments, project disposal income, existing regulatory funds and daily operating sales income. In the first half of 2023, the group realized the contract sales amount of RMB 33.413 billion yuan, the contract sales area was 5.115 million square meters, and the cumulative sales refund in the first half of the year was RMB 27.10 billion yuan.
As of June 30, 2023, the total assets of China Evergrande Group were approximately 1.743997 trillion yuan. The board of directors believes that the group has sufficient business operations and has assets of sufficient value to support operations.
It has been 17 months since China Evergrande suspended trading on the morning of March 21, 2022. According to the "18-month delisting" system arrangement of the Hong Kong Stock Exchange, China Evergrande applied to resume trading in time at the deadline, ushering in a turnaround. After China Evergrande resumes trading, China Evergrande, Evergrande Property and Evergrande Automobile, the three listed companies of Evergrande, will fully resume trading.
The resumption of trading is not easy, and the share price is even more worrying. Before the suspension, China Evergrande’s share price had fallen to 1.65 Hong Kong dollars per share, and the total market value was 21.80 billion Hong Kong dollars. The performance of China Evergrande’s share price next Monday will attract great attention from the market.
In contrast, Hengda Motor resumed trading on July 28, the day plummeted nearly 70%. Hengda Property resumed trading on August 3, the day fell nearly 50%, the continuous decline has been reduced to penny stock, the latest total market value 7.50 billion Hong Kong dollars.
Hengda Automobile reduced losses by 48.6% in the first half of the year.
Net debt fell to 32.80 billion
On August 25, Hengda Automobile announced in the Hong Kong Stock Exchange that the group’s revenue in the first half of the year was 155 million yuan, and the net loss was 6.873 billion yuan, a year-on-year reduction of 48.6%.
In the 6.87 billion loss, Hengda Automobile said that the discontinued business (i.e. divested real estate projects) held for sale lost 1.061 billion yuan, non-operating losses such as asset disposal and asset impairment 3.716 billion yuan, and operating losses 2.096 billion yuan.
The announcement shows that the Group’s discontinued business (i.e. divestment of real estate projects) held for sale was completed on May 12, resulting in a decrease of 43.139 billion yuan in net liabilities in the financial statements. As of June 30, the company’s net liabilities fell to 32.84 billion yuan.
The announcement shows that for the six months ended June 30, 2023 (the reporting period), Evergrande continued to focus on the high-quality production and delivery of the Hengchi 5, improving and streamlining the production management system. Of all the pre-orders for the Hengchi 5, more than 760 units were delivered during the reporting period. In terms of research and development results, Evergrande has applied for 3,512 patents in similar research fields worldwide, of which 2,715 have been granted patents.
Evergrande Motor said that it will fully promote the mass production and delivery of Hengchi 5 in the future. The Group will continue to lay a solid foundation for research and development. While accelerating the research and development of core technologies to lead the research and development of smart electric vehicle technology, it will continue to focus on the research and development of new models. Evergrande Motor will strive to improve the manufacturing level of the Tianjin manufacturing base, improve the quality system, and ensure high-quality production and delivery. In terms of sales, it will further expand sales channels, create overseas markets, and continue to improve sales and after-sales services.
Prior to this, on the evening of August 14th, Hengda Automobile announced that it had received the first strategic investment of US $500 million from the US-listed company Newton Group (NWTN), which is held by the UAE sovereign fund, and another 600 million RMB transition funds will arrive one after another within 5 working days after the announcement. All the war investment funds will be used for Hengda Automobile’s Tianjin factory to ensure the normal production of Hengchi 5 and the mass production of Hengchi 6 and 7.
On August 25, Hengda Motor closed at HK $1.29/share, down 3.01% on the day, and the total market value 14 billion HK $.
Editor: Joey
Review: Wood Fish
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Original title: "Sudden! Evergrande Late Night Announcement"
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