NANJING, CHINA – AUGUST 18, 2023 – Aerial photo shows a residential area of Evergrande in Nanjing, East China’s Jiangsu province, Aug 18, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
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Shares of China’s highly indebted property developer, China Evergrande Group, plummeted by 87% on its reopening on Monday, marking its first day of trading since March 21, 2022.
The stock dropped to as low as 22 Hong Kong cents, a significant decline from its previous close at 1.65 Hong Kong dollars per share on March 18, 2022.
The resumption of trading follows the company’s announcement of a loss of 39.25 billion yuan ($5.38 billion) for the first half of the year, a smaller loss compared to the 86.17 billion yuan loss during the same period last year.
Despite the losses, Evergrande’s revenue increased to 128.81 billion yuan from 89.28 billion yuan in June 2022.
In July, China Evergrande Group filed for Chapter 15 bankruptcy protection in a U.S. court, safeguarding its U.S. assets from creditors while it pursues a restructuring agreement elsewhere.
In its filing to the Hong Kong exchange, Evergrande disclosed total liabilities of 2.39 trillion yuan as of June this year, slightly lower than the 2.44 trillion yuan reported for the six months ending June 30, 2022.
As of June, Evergrande’s total assets amounted to 1.74 trillion yuan, including 13.4 billion yuan in cash, cash equivalents, and restricted cash.
In 2021, Evergrande defaulted and later announced an offshore debt restructuring program in March due to difficulties in completing projects and repaying suppliers and lenders.
The company’s overdue earnings report for the year indicated a combined loss of $81 billion.
The net losses for 2021 and 2022 were 476 billion and 105.9 billion yuan, respectively, resulting from property writedowns, land returns, losses on financial assets, and financing costs.
In 2020, prior to the default, Evergrande recorded a net profit of 8.1 billion yuan.
— This report includes contributions from CNBC’s Sumathi Bala and Elliot Smith.
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