Details
💸 Delisting Deadline Missed: Shares have been suspended since January 29, 2024; after 18 months without trading, the Hong Kong Exchange can delist them. A formal notice is pending but considered a mere formality.📉 Value Nearly Vaporized: Before suspension, the stock traded at HK$0.163—an implied market cap of just HK$2.2 billion (about $280 million). In 2017, Evergrande was worth HK$354.9 billion (around $45 billion)—a collapse of roughly 99 %.⚖️ Liquidators Hunt Assets: Since the winding-up order, Alvarez & Marsal has managed global assets and is probing founder Hui Ka-yan’s personal wealth. No viable rescue plan for creditors has emerged.🏘️ Sector Under Strain: New-home prices in 70 Chinese cities fell in June at the fastest pace in eight months. Goldman Sachs forecasts a further 10 % drop by 2027 if Beijing continues to intervene cautiously.
Why It Matters
- Case Study in Debt Crisis: Evergrande’s downfall underscores the fragility of China’s property giants and how challenging an orderly resolution can be.
- Investor Warning: A delisting strands remaining shareholders with no exit, denting Hong Kong’s reputation as the go-to bourse for mainland firms.
- Extended Macro Risk: Ongoing price declines depress consumption and construction investment, tightening Beijing’s room for economic stimulus.
The China Survival Guide for Western Businesses
Entity setup, WeChat strategy, hiring your first local team. 12+ years on the ground in Shanghai.
