Property wing of world’s most indebted developer posts rare earnings loss

Evergrande’s disclosure of half-year revenue sent stock price tumbling again

National Weekend Edition /
Aug.August 29, 2021 12:00 PM
Evergrande Group CEO Hui Ka Yan (Getty)

Evergrande Group CEO Hui Ka Yan (Getty)

China Evergrande Group warned that its real estate wing recorded a loss in the first half of the year for the first time since at least 2009.

The company’s property business incurred a loss equivalent to about $618 million, according to the Wall Street Journal. The parent company is the world’s most indebted developer with around $300 billion in liabilities and around $7.4 billion in bonds maturing next year.

Evergrande started discounting apartments at its developments last spring, hoping to sell more units. Some were discounted as much as 25 percent.

The wider conglomerate managed to still post a profit of $1.4 billion to $1.6 billion in the first half, thanks to gains from the sale of shares in Hong Kong-listed company HengTen Networks Group, and the value of its remaining interest in the company.

Still, Evergrande’s stock is down about 70 percent since the beginning of the year.

The company’s financial troubles have made it something of a poster child for China’s indebted property sector. The Chinese government has adopted a suite of regulations meant to bring the sector back from the brink of a bubble.

Earlier this month, the government barred private equity funds from investing in real estate, cutting off a major source of funding for builders.

The company’s electric vehicle business, China Evergrande New Energy Vehicle Group, also lost the equivalent of $741 million. The EV company’s valuation was estimated as high as $80 billion earlier this year and now sits at around $6.5 billion.

[WSJ] — Dennis Lynch 





    Related Articles

    arrow_forward_ios
    100 State Street (Google Maps)
    “Out of spite,” Jersey project is mere rubble
    “Out of spite,” Jersey project is mere rubble
    Parkview’s Paul Rahimian with 1800 Avenue at Port Imperial (LinkedIn, Handel Architects)
    Lender plans unusual loan sale on Chinese developer’s troubled NJ project
    Lender plans unusual loan sale on Chinese developer’s troubled NJ project
    Airbnb's Brian Chesky (Getty, iStock)
    China’s internet sanctions drive out Airbnb
    China’s internet sanctions drive out Airbnb
    REBNY president James Whelan (REBNY, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
    Construction pipeline soars 69%: REBNY
    Construction pipeline soars 69%: REBNY
    3 New York Avenue in Jersey City, NJ (Google Maps, iStock)
    Developers land $97M for Jersey City multifamily
    Developers land $97M for Jersey City multifamily
    Hudson Meridian Construction Group founder Bill Cote and a rendering of the Science Park Apartments planned at 201 Munson in New Haven (Hudson Meridian Construction Group)
    Breakthrough for beleaguered New Haven project
    Breakthrough for beleaguered New Haven project
    Photo illustration depicting landlords being outearned by their lenders (iStock)
    More multifamily landlords are making less than their lenders
    More multifamily landlords are making less than their lenders
    A photo illustration of Veyoel Moshe Gardens in Kiryas Joel (LoopNet, iStock)
    Developers seizing on Hasidic suburb’s explosive growth
    Developers seizing on Hasidic suburb’s explosive growth
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...