The first substantial default of debt appeared, and Evergrande, which was stuck in the quagmire, fell into the abyss. To make matters worse, Xu Jiayin's last hole card was also lost, and Evergrande was finally going to the end of the road?
1. Evergrande fell into the abyss?
After the outbreak of the crisis, Evergrande actively saved itself by selling assets, and Xu Jiayin also sold and mortgaged assets under his personal name in exchange for more than 7 billion yuan of funds to repay debts. However, for Evergrande's huge debt of nearly two trillion yuan, it is tantamount to a drop in the bucket. Earlier this month, Evergrande announced that it could not fulfill its $260 million debt guarantee obligation, which means that Evergrande has already defaulted on its first debt materially. At the same time, the Guangdong Provincial Government sent a working group to Evergrande, and Evergrande also set up a risk mitigation committee with the help of external forces. All kinds of signs show that Evergrande is unable to save itself at all and is rapidly falling into the abyss.
2. The last hole card is gone?
To make matters worse, the last hole card that Xu Jiayin had high hopes for was basically invalidated in the near future and could not be played. After the Evergrande thunderstorm, Xu Jiayin put forward three major strategies for self-help: first, resume work and production, and resolutely guarantee the delivery of buildings; second, the sales of existing buildings and the scale of real estate; third, the comprehensive transformation to the new energy automobile industry. The first two are to maintain the basic disk of the real estate business, which is the proper meaning of the title, while the third is the real bottom card of Xu Jiayin, hoping to rely on the outlet of new energy vehicles to drag Evergrande out of the mire.
To this end, Evergrande Automobile concentrated manpower, material resources and resources to launch the mass production battle of Hengchi 5 in the Tianjin factory. If the mass production is successful, it will be a long drought and a sweet rain for Evergrande, and it is also possible to flip the market in the future. However, just when everyone was looking forward to the launch of Hengchi 5 at the beginning of next year, Evergrande Automobile underwent major changes. In the product list released by the Ministry of Industry and Information Technology on December 8, the two Evergrande automobile models that were still listed in November have been removed. Reasonable speculation may be because Evergrande Automobile failed to pass the publicity, which means that hengchi 5 mass production listing is hopeless.
3. Xu Jiayin is at the end of his rope?
If Hengchi 5 is really stillborn, then the day when Evergrande Automobile emerges is far away, or there is no future at all. In this way, the bottom card of the new energy vehicle business prepared by Xu Jiayin for Evergrande was completely invalidated, and Xu Jiayin's good wish to save Evergrande in the automobile business was also shattered. As we all know, the real estate business has been unable to support Evergrande,a building that is about to collapse, and the new energy vehicle business, which has high hopes, has suffered a major blow. Evergrande can be said to have gone from the darkness of the mire to the despair of falling into the abyss, and Xu Jiayin is at the end of the road.
If you have to find a reason for the failure, then Evergrande's current crisis is inseparable from Xu Jiayin's two characteristics. First of all, Xu Jiayin is deeply convinced of the "short flat and fast" model in business. In 1997, Evergrande launched the legendary real estate Jinbi Garden, the first phase of the year of land acquisition, the year of construction, the year of construction, the year of completion, the year of sales, the year of sale, the year of occupancy. Xu Jiayin created the "short flat fast" model of high-speed rotation in the real estate industry, and as the only model of firm belief. Later, he replicated this model in other diversified businesses such as automobiles, but all of them failed, without exception.
Second, the development of high-leverage financial greedy gambles. The financial attributes of the real estate industry are very strong, and almost all housing enterprises are adding leverage, but Xu Jiayin is too greedy. Recently, Cao Dewang, founder of Fuyao Glass, said bluntly that Xu Jiayin only has 3.9 billion yuan of his own capital, but through loans and other means, he has achieved 2 trillion yuan. With more than 500 times leverage, this is the extreme use of financial resources. People's hearts are not enough to swallow elephants, xu Jiayin relies on high leverage to pile up Evergrande, sooner or later will thunder. Perhaps for Xu Jiayin, there are no assets to lose. But when all hope is lost, it is not known whether he has reflected on his greed.