On September 18, 2017, Xu Jiayin became The new richest man in China for $39.1 billion, with Ma Huateng and Jack Ma coming in second. That year, Xu Jiayin's personal wealth also ranked among the top in the world's rich list, ranking 15th. The scenery is no different.
It's just, thirty years of Hedong, thirty years of Hexi. Xu Jiayin in 2017 absolutely did not expect that in just 4 years, he and his Evergrande Group would come to the "cliff".
On September 13, hundreds of investors besieged Evergrande's headquarters in Shenzhen, starting from the delay in the payment of Evergrande's wealth management products on September 8, while the outstanding wealth management products were 40 billion yuan.
After the news broke, the news that Evergrande would go bankrupt was on the rise. That night, Evergrande Group urgently refuted the news of bankruptcy and admitted to encountering an unprecedented crisis.
The crisis of Evergrande has begun as early as last year.
In August 2020, the state regulatory authorities set up "three red lines" for the financing of housing enterprises, and the rules showed that "interest-bearing liabilities must not be increased", which means that the debt must be repaid before going to the bank to borrow money.
In the first half of this year, Evergrande's asset-liability ratio was 81.0%, and the cash-to-debt ratio was 0.67, which was in the "orange file". Evergrande, which cannot easily borrow money from the bank, has suffered a huge impact on its capital flow.
In order to quickly withdraw funds, Evergrande quickly adjusted its strategy, first publicly selling its assets, and then began to reduce land acquisition and discount house sales. Although Evergrande is bent on reversing the decline, under the impact of the epidemic and the strict real estate regulation and control policies, the return of funds has always been "a drop in the bucket".
After the break in cash flow, many of Evergrande's industries continued to thunder, and as of now, Evergrande has been in debt of 1.97 trillion yuan.
Evergrande football, which once made the Chinese people proud, is now also in trouble. There are reports that Evergrande Football has turned to the Guangdong provincial government for help and is considering selling players to raise funds.
On September 14, Evergrande issued its latest announcement, saying that it had hired two financial institutions as joint financial advisers to seek the best solution. But what is embarrassing is that among the two institutions hired by Evergrande, Hualian Noji has participated in the bankruptcy case of Lehman Brothers (once one of the four major investment banks in the United States), and another Zhonggang Capital has served as the financial adviser for the development of blue light and Huaxia Happiness.
Once Evergrande, is a leading domestic real estate enterprise, with real estate projects in more than 180 cities across the country, once known as the "world's first housing enterprise". And the person at the helm of the dragon head is Xu Jiayin.
In 2010, Xu Jiayin bought out the equity of Guangzhou Football Club for 100 million yuan, and the club officially changed its name to Guangzhou Evergrande Football Club. In the following ten years, Evergrande has repeatedly introduced foreign aid to build Guangzhou Evergrande into a Chinese football head club.
Of course, investing in football is not only because of the "feelings for Chinese football", but also from a commercial perspective. Xu Jiayin once said that the investment club is "much more cost-effective" than running ads on CCTV for 1 year. As of September 2020, Evergrande had invested 13 billion yuan in the club and lost 7.3 billion yuan. However, the advertising effect brought by Evergrande football has made Evergrande Real Estate open its reputation in the country.
In 2013, China's real estate entered a large cycle of destocking, mortgage interest rates were discounted, it was easy for buyers to apply for housing loans, and it was easy for real estate developers to apply for loans, from the supply side to the demand side are major benefits. With the help of football, Evergrande began to expand its business territory wildly and became a domestic real estate leader.
Evergrande, which has unlimited scenery, then began to "fancy death".
It was in 2013 that Evergrande football rushed into the AFC Champions League, and Xu Jiayin launched Evergrande Ice Spring with great efforts. However, the operating model of real estate companies is not suitable for FMCG, and after Evergrande Ice Spring burned out billions, it has not made a profit so far and has been forced to sell at a low price.
Projects that go hand in hand with Evergrande Ice Spring also include Evergrande Grain and Oil, Evergrande Insurance, Evergrande Financial Services and other companies, all of which are losing money without exception. However, what really brought down Evergrande was Evergrande's investment strategy in automobiles.
Nowadays, when the new domestic car-making forces have not yet emerged, Evergrande has long been making cars. In 2008, Evergrande Automobile completed its IPO on the Hong Kong stock market, and issued two private placements on the main board in 2020 and 2021. However, what makes the outside world wonder is that after more than ten years of construction, Evergrande Automobile has not been on the market, which once caused the outside world to suspect that Evergrande "made a false car".
There was no result in building his own car, and Boss Xu once invested in Jia Yueting's FF Faraday.
In 2018, Evergrande Health had indirectly held 45% of the shares of Jia Yueting FF Company, and as a result, in 2 months, Jia Yueting burned out the 800 million US dollars paid by Evergrande, and then asked for 700 million US dollars in advance, and Evergrande directly refused. The failed investment tore both sides apart for a time, and although the settlement ended, the money was gone.
The car didn't come out, but the money kept burning. According to the public financial report, from 2018 to 2020, Evergrande Automobile's annual losses were 1.428 billion, 4.426 billion and 7.74 billion, respectively. Some time ago, Hengchi Automobile finally went on the road to actually test, once pulled up the market value of Evergrande's automobile sector, but it has been unable to recover the overall rout of Evergrande's entire series.
Real estate once put Xu Jiayin on the throne of China's richest man, and after the bubble burst, he became a trillion-dollar debtor that everyone recovered. Boss Xu said to the outside world, "I can have nothing, but the investors of Evergrande Wealth cannot have nothing!" The words are still in the ears, but many people have found that Evergrande Wealth has long let the "leaders go first".
Evergrande employees revealed that Evergrande executives had many principal and interest arrived in advance before the suspension of payment, including Du Liang, executive director and general manager of Evergrande Wealth, and Ding Yumei, wife of Xu Jiayin.
In this regard, Du Liang, executive director and general manager of Evergrande Wealth, explained to the outside world that he had previously redeemed Evergrande Wealth wealth management products on May 31 because there was an emergency at home.
On the other hand, Qixinbao shows that through the equity penetration chart, Evergrande Financial is ultimately controlled by an overseas offshore company called Anji (BVI) Co., Ltd., and the actual controller behind Anji Company is the Xu Jiayin family. Typical of transferring wealth through offshore trusts, even if Evergrande really falls, the Xu family's money will not be less than a cent.
Looking at Boss Xu's statement, it seems that it is not so reliable.
Many people are concerned, can Evergrande survive this crisis? After all, many people still hold Evergrande real estate and financial products that have not been paid. Judging from Evergrande's overall debt situation, I am afraid that there are more evil and fewer, so many assets are sold, and the cumulative return of funds is 5 billion yuan.
And many executives have stepped down and rushed to redeem assets, even if Xu Jiayin's words are conclusive, it also makes people feel "half in the ground". Once the bankruptcy is liquidated, the upstream and downstream supply chain enterprises will be affected by the shock, and the real injuries are ordinary investors and home buyers.
I don't know Xu Jiayin and Evergrande,
Can you wait for the white knight to save your life.