Evergrande returns to trading in Hong Kong: Plunging to -78.79%

Evergrande, the world’s most indebted Chinese property developer, returned to trading on the Hong Kong Stock Exchange after a 17-month hiatus to close the session down 78.79% at HK$0.35.

Yesterday, the Shenzhen conglomerate, which is struggling with a difficult restructuring, announced that it ended the first half of 2023 with a net loss of 33 billion yuan (about $4.5 billion), halving the loss of 66.4 Billions in the same period from January to June means 2022 due to increased revenue.

The company also made a last-minute decision to extend the deadline for voting on its offshore debt restructuring plan, which was scheduled for today but will take place on September 25-26 instead.

In a statement, the Chinese company justified its decision with the hope that creditors would “reconsider, understand and assess” the terms of the plans and give Evergrande additional time to assess the group’s recent developments, including the resumption of negotiations.

On August 18, Evergrande filed for protection under Chapter 15 of the US Bankruptcy Act to protect the company’s assets in the United States while the company’s restructuring talks in Hong Kong and the Cayman Islands continue. Evergrande unveiled a plan to restructure the bulk of its offshore debt last March and decided in mid-August to postpone the vote until today.

The Chinese group shared the results of the first half of the year to the market yesterday, in which it posted a net loss of 33.012 million yuan ($4.77 million), half of what it lost in the same period in 2022. On the other hand, it rose in the six-month period 128,067 million yuan (16,256 million euros), up 43% year on year. At the end of the first half of 2023, Evergrande’s liabilities exceeded 2.380 billion yuan, down 2% from the end of 2022. Evergrande released the financial statements for 2021 and 2022, in which the company recorded losses totaling 581.2 billion yuan (73.8 billion euros at current exchange rates).

Specifically, the Chinese real estate giant suffered losses of 476,095 million yuan in fiscal 2021, a loss that declined to 105,116 million yuan in 2022. In the 2020 fiscal year, the Chinese group posted a net profit of 8,076 million yuan (1,027 million euros).

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