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China Evergrande says contracted gross sales fell 38.7% in 2021

An exterior view of the China Evergrande Heart in Hong Kong, east China, March 26, 2018.

Bobby Yip | Reuters

BEIJING – Debt property developer China Evergrande’s contracted gross sales slumped final yr because the property big struggled to repay collectors.

A submitting on Tuesday confirmed that the corporate’s contracted actual property gross sales final yr totaled 443.02 billion yuan ($ 69.22 billion), a 38.7% lower from reported contract gross sales for 2020 of 723.25 billion yuan equal.

Evergrande shares reopened greater Tuesday afternoon in Hong Kong, with shares attempting to carry positive factors round 3%.

Buying and selling ceased at 9 a.m. on Monday, the shares priced at 1.59 Hong Kong {dollars} (20 cents) every. That is simply above the all-time low of $ 1.42 Hong Kong per share on December 24, in accordance with FactSet.

Shares are down greater than 88% within the final 250 buying and selling days. The corporate missed funds to collectors in December, Fitch Rankings stated, sending the developer into default.

Evergrande, China’s second largest property developer by 2020 gross sales, is the most important Chinese language actual property developer after issuing US greenback offshore bonds, which totaled US $ 19 billion final yr. The developer had liabilities totaling $ 300 billion final yr.

The corporate stated Tuesday it is going to “proceed to actively talk with collectors, search to resolve dangers and safeguard the reputable rights and pursuits of all events.”

The developer added {that a} demolition warrant for its Ocean Flower Island venture is just for 39 buildings, as filed with the Hong Kong Inventory Alternate on Tuesday.

Evergrande’s public statements have sought to reassure traders that the corporate builds properties and provides them to clients. However the demand for the developer’s future initiatives is waning.

The complete yr figures present contract income of simply 720 million yuan in simply over two months between October 21 and December 31. In distinction, contract gross sales for August have been 38.08 billion Sept. and Oct. 20.

S&P International Rankings warned in November that Evergrande’s default was “very seemingly” as the corporate might now not promote new properties. As with different Chinese language actual property builders, Evergrande’s enterprise mannequin depends closely on promoting residences to purchasers earlier than the models are accomplished.

Learn extra about China from CNBC Professional

Evergrande’s troubles have raised issues in regards to the well being of China’s huge actual property trade as an entire.

Chinese language authorities have described the corporate as a “distinctive case”. Analysts have famous that not like different builders, Evergrande has made little headway in complying with new laws designed to cut back the trade’s reliance on debt.

Nevertheless, a widely known Chinese language developer who complied with authorities debt laws additionally warned of falling gross sales.

Shanghai Shimao advised traders in late December that it might be tough to satisfy its contracted income goal of 38 billion yuan for the total yr, as income for the primary eleven months of the yr was 28.2 billion yuan, in accordance with a file. Along with declines in shares, the corporate’s bonds have additionally slumped in current months.

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