Evergrande is in an eventful autumn, sending positive signals to appease the market

Evergrande Group is in the midst of an eventful autumn, and the debt crisis is gradually evolving into a crisis of trust. After the stock price suffered repeated heavy setbacks, Evergrande conveyed confidence to the inside and outside through the full letter and stock options.

Xu Jiayin expressed his determination

On September 21, mid-autumn festival, Xu Jiayin, chairman of the board of directors of Evergrande Group, sent a letter to all employees, thanking employees for their hard work and paying tribute to their families. Xu Jiayin said in the letter that he firmly believes that Evergrande will be able to get out of the darkest moment as soon as possible, will be able to accelerate the full resumption of work and production, and will certainly be able to achieve the major goal of "guaranteeing the delivery of the building", and hand over a bold and responsible answer sheet to home buyers, investors, partners and financial institutions.

On the same day, Evergrande Automobile (00708. HK) announced that it will grant 324 million options to the company's scientific and technical employees, equivalent to 3.31% of the company's current issued share capital, with an exercise price of HK$3.9. The option plan will be exercised in four installments, starting as early as March 20, 2022.

The object of the option is preferential to the researcher. According to the announcement, three directors, Zhou Chengyan, Guo Jianwen and Xie Wu, were granted 300,000 options each, and about 3,180 employees were granted a total of 323 million options. The Company stated that any non-scientific research technicians who belonged to the group vice president level or above would not be granted any equity.

It is worth noting that Evergrande Automobile has no mass production models and is still losing money. In the first half of this year, Evergrande Automobile's overall loss was 4.822 billion yuan, an increase of 96.25% year-on-year, and it reached 27.1 billion yuan in the acquisition of core technologies and research and development expenses.

Evergrande Automobile reminded in its semi-annual report that the mass production of Hengchi Automobile is entering the final sprint stage, but the group is still facing cash flow challenges. If there is a lack of further capital investment in the short term, the timetable for mass production of new energy vehicles may need to be postponed.

In addition, in order to cope with the overall liquidity crisis of Evergrande Group, Evergrande Automobile's equity has also been put on the shelves as a sale object, and Evergrande Group said that it is actively engaging with investors, but there is no substantial progress in the sale at present.

Evergrande stocks suffered a major setback during the Mid-Autumn Festival. On September 20, China Evergrande fell more than 17% at one point, closing down 10.24% on the day; Evergrande Automobile fell 2.68%, Evergrande Property (6666. HK) fell more than 11%. On September 21, Evergrande's stock price stabilized slightly, with China Evergrande closing at HK$2.27 per share, down 0.44%; Evergrande Automobile closing at HK$2.9 per share, unchanged from the opening price; and Evergrande Property closing at HK$4.2 per share, up 2.94%.

Evergrande Wealth launched the redemption of physical assets

How the Evergrande wealth redemption crisis ended has attracted much market attention, but the relevant rumors are also mixed, triggering frequent rumors.

On September 20, the Futian Branch of the Shenzhen Municipal Public Security Bureau issued a circular saying that after verification by the Bureau and the Shenzhen Municipal Market Supervision and Administration Bureau, the picture was untrue and was a forgery, and the bureau had filed a case to investigate.

Shenzhen police also reported that the "Notice on Compensation matters for evergrande financial services cycle" previously circulated online is also false information, and the police have arrested 5 people suspected of committing fraud.

On the evening of September 19, Evergrande Group also issued an announcement that the "Notice on Convening the National Evergrande Wealth Investor Conference" circulated on the Internet was forged and not officially issued by Evergrande Finance, a subsidiary of the group.

Before the holiday, evergrande wealth physical asset redemption work has been started. Evergrande Wealth announced on September 18 that according to the "Evergrande Wealth Investment Product Redemption Plan" formulated by Evergrande Group on September 13, the redemption of physical assets has been started. If investors have the need to redeem physical assets, they can contact the investment consultant or bring their ID card and investment contract to the reception location in various places for consultation. In the plan, Evergrande Wealth announced the office addresses of the special work of physical asset redemption in 27 provincial-level administrative regions.

According to the previously announced redemption plan, Evergrande Wealth will provide three schemes: cash instalment payment, redemption of physical assets, and redemption of the balance of the purchase of housing. Investors can choose one of three options, or a combination of any two and three options.

Physical assets include residences, apartments, shops and parking spaces, which are 2.2%, 5.4% and 4.8% off according to the current selling price basis, respectively. If the discounted price of the asset is lower than the filing price of the local government, the operation shall be carried out according to the filing price required by the local government. Evergrande will handle the payment of physical assets at the end of each month, and adopt the method of centralized registration and online centralized housing selection.

Previously, some Evergrande executives paid out wealth management products in advance, which caused investor dissatisfaction. On September 18, Evergrande Group also responded to this, requiring all the funds redeemed by the 6 managers in advance to be returned within a time limit and severely punished.

According to the announcement, as of May 1, 2021, the senior executives above the then headquarters of Evergrande Group, the assistant to the presidents of various industrial groups, the chairman and general manager of the provincial companies of the real estate group, and the management personnel of Evergrande Wealth at the time, a total of 44 people held 58 investment products of Evergrande Wealth; from May 1 to September 7, 9 of the above-mentioned management personnel, 9 of the investment products of 8 people were due and paid normally, 9 people subscribed to 13 investment products, and 6 people redeemed 12 investment products in advance As of September 8, 39 people still held 50 investment products of Evergrande Wealth.

Xu Jiayin promised at the special meeting on September 10 that Evergrande Wealth's investors "can't be less than a penny", stressed that no one should be allowed to engage in specialization, and said that the company has encountered unprecedented difficulties, but the company's fundamentals have not changed.