China Evergrande officially resumed trading, and actually "salted fish turned over"

◎ Source | Real estate agent (ID: real-estate-spy)

"Good thing! This is encouraging news. ”

On August 28, China Evergrande (03333, HK) officially resumed trading, which has lasted more than 500 days, but it coincides with a new round of "bailout" key window, many people on the Internet lamented, "How can Xu Jiayin be so lucky."

Since the end of last month, the "Evergrande series" of Evergrande Automobile, Evergrande Property and China Evergrande have resumed trading one after another, looking back, it is too unexpected by the market, in response to the old saying "self-helper, people always save".

This means that the Evergrande lineage, which was recognized by public opinion as "certain death" after the explosion of huge debts two years ago, is now "salted fish turned over".

Why China Evergrande can resume trading on the eve of approaching the red line of Hong Kong stock "delisting" is belated, but it is finally one step closer to the final "landing".

One is the concentrated reissuance of 2021, 2022 and their interim financial reports in mid-August, and as of the end of last year, Evergrande's total assets were about 1.84 trillion yuan and total liabilities were about 2.44 trillion yuan.

In other words, Evergrande has long been "insolvent".

On August 27, China Evergrande released its 2023 interim results, achieving revenue of 128.18 billion yuan, gross profit of 9.8 billion yuan, operating loss of 17.38 billion yuan, non-operating loss (including litigation, land recovery, equity disposal and asset impairment, etc.) of 15.03 billion yuan in the first half of the year, with a total net loss of 39.25 billion yuan.

As of the end of June this year, China Evergrande had total assets of 1.744 trillion yuan, total liabilities of 2.39 trillion yuan, interest-bearing liabilities due within one year of 581.81 billion yuan, 6.7 billion yuan less than the end of last year, and interest-bearing liabilities of more than one year of 42.95 billion yuan, an increase of 17.7 billion yuan over the end of last year.

At the end of the same period, China Evergrande's contract liabilities on the account were 603.98 billion yuan, while payables and other payables were 1.057 trillion yuan, which continued to increase from 1 trillion yuan at the end of last year.

In addition, China Evergrande had cash and cash equivalents of RMB4.05 billion, restricted funds of RMB9.33 billion, completed properties for sale of RMB98.39 billion, properties under development RMB1.086 trillion and inventory of nearly RMB900 million.

As of the end of June 2023, China Evergrande has a land reserve of 190 million square meters and has also participated in 78 old renovation projects, including 55 in the Greater Bay Area (34 in Shenzhen) and 23 in other cities.

China Evergrande said that at present, the company's working capital mainly comes from relief fund borrowings, project disposal income, stock supervision funds and daily operating sales income provided by local governments.

In the first half of 2023, China Evergrande achieved contracted sales of 33.41 billion yuan, a contracted sales area of 5.115 million square meters, an average sales price of 6,532 yuan/㎡, and a cumulative sales return of 27.1 billion yuan.

Next, the key to whether China Evergrande can continue to operate is still whether the US$19 billion offshore debt restructuring will be successfully implemented, "The company has reached a support agreement with the company's overseas creditor panel on the proposal of overseas debt restructuring, and is currently advancing the restructuring agreement to arrange court proceedings. ”

It is worth mentioning that the best assets under China Evergrande should be Evergrande Property and Evergrande Automobile, which have also become the key to attracting investors and promoting the "debt-to-equity swap" in this overseas debt restructuring.

Among them, the revenue of "cash cow" Evergrande Property in the first half of this year was about 6.15 billion yuan, a year-on-year increase of about 6.2%; The gross profit margin was about 24.4%, an increase of about 2.2 percentage points year-on-year; the net profit margin was about 12.9%, an increase of about 3.0 percentage points year-on-year; and the net profit attributable to the parent was about 780 million yuan, an increase of about 43.1% year-on-year.

In the first half of the year, Evergrande Auto achieved revenue of 155 million yuan, a net loss of 6.873 billion yuan, a year-on-year decrease of 48.6%, and as of the end of June 2023, its total assets were 42.85 billion yuan, and its total liabilities were 75.692 billion yuan, including 27 billion yuan in borrowings, 42.27 billion yuan in trade and other payables, and 6.422 billion yuan in other liabilities.

In mid-August this year, Evergrande Automobile introduced the "war investment" Newton Group, which spent US$500 million to subscribe for more than 6.177 billion shares of Evergrande Automobile, accounting for 27.5% of the total issued share capital of Evergrande Automobile after expansion.

According to Evergrande Automobile, the 600 million yuan transition fund from Newton has been received, and all the investment funds will be used for Evergrande Automobile's Tianjin plant to ensure the normal production of Hengchi 5 and the successive mass production of Hengchi 6 and 7.

The outside world still admires Xu Jiayin, under the high pressure of huge debts, Evergrande still insists on ensuring large-scale delivery, and also promotes key actions such as overseas debt restructuring and the introduction of war investment in the automobile sector.