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
    Conlon & Co's Sean Conlon with 206 Clematis Street (Loopnet, Conlon) 18 Million, West Palm
    Sean Conlon pays $18M for historic apartment and retail building in downtown West Palm
    Sean Conlon pays $18M for historic apartment and retail building in downtown West Palm
    MG Developer's Alirio Torrealba and rendering of Merrick Parc (MG Developer)
    MG plans $204M luxury apartment project near Coconut Grove
    MG plans $204M luxury apartment project near Coconut Grove
     Clearline Real Estate's Jenny Bernell with Block E at 1550 (Smith Aerials)
    Ex-Kushner exec Jenny Bernell picks up A&E District development site in Miami for $20M
    Ex-Kushner exec Jenny Bernell picks up A&E District development site in Miami for $20M
    Dacar Management's Alberto Micha-Buzali with Residences and Shoppes (LinkedIn, Dacar Management)
    Dacar scores $81M loan for Publix-anchored mixed-use project in Hialeah
    Dacar scores $81M loan for Publix-anchored mixed-use project in Hialeah
    184 Sunset Avenue in Palm Beach with Benchmark's Jordan Vogel and Aaron Feldman (Apartments, LinkedIn, Getty)
    Benchmark drops $17M for historic Palm Beach apartment building
    Benchmark drops $17M for historic Palm Beach apartment building
    David Barry, principal, Ironstate Development along with a rendering of the proposed eight-story building between Northeast 26th and 27th Streets in Wynwood (Ironstate, 5G Studio Collaborative)
    Developer proposes Urby-branded apartments on former Art by God site in Wynwood
    Developer proposes Urby-branded apartments on former Art by God site in Wynwood
    the Church of God Evangelical at 12830 Northeast Sixth Avenue in North Miami with Daniel Jaramillo and Tomas Sinisterra of Strategic Properties based in Miami (Google Maps, LinkedIn)
    Praying for a profit? Developers plan multifamily project on North Miami church site, adjacent property
    Praying for a profit? Developers plan multifamily project on North Miami church site, adjacent property
    Blue Road’s Marcelo Tenenbaum and Jorge Savloff with Emblem Tower (Northmiamifl, Blue Road, iStock)
    Blue Road plans 20-story, 139-unit multifamily project in North Miami
    Blue Road plans 20-story, 139-unit multifamily project in North Miami
    arrow_forward_ios

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

    Loading...