Xu Jiayin and Evergrande
Can Xu Jiayin and Evergrande survive this time?
Influenced by a civil ruling issued by Wuxi intermediate people’s Court on July 7, which spread on July 19, the market value of Evergrande system evaporated by HK $74 billion on July 19, and the value of Xu Jiayin shrank by US $2.1 billion.
According to the ruling, the Yixing branch of China Guangfa bank applied to the court for pre litigation property preservation on the ground that it would cause irreparable damage to its legitimate rights and interests if it did not apply for preservation immediately in an urgent situation, and requested to freeze the bank deposits of RMB 132.01 million of Yixing Hengyu real estate and Evergrande real estate group, or to seal up or detain other equivalent property.
This news immediately triggered the sharp decline of Evergrande. Evergrande real estate group urgently issued a “solemn statement”, saying that the project loan of Yixing Hengyu Real Estate Co., Ltd. and Yixing sub branch of Guangdong Development Bank, a subsidiary of the company in Jiangsu Province, was 132 million, and the maturity date was March 27, 2022. He also said that he would “sue in accordance with the law” for the abuse of pre litigation preservation by Yixing branch of Guangfa bank. However, according to the report of “one real estate”, Evergrande returned the money yesterday.
According to the statistics of China Securities Company, Evergrande’s market value fell by 74 billion in one day. By the close of the 19th, China Evergrande (03333. HK) had fallen by more than 16%, and its market value had fallen to HK $108.8 billion, which was more than HK $20.9 billion higher than that of the previous trading day; Evergrande motor (00708. HK) fell nearly 20%, and its market value evaporated HK $37.1 billion; Hengteng network fell nearly 12%, and Evergrande property (06666. HK) fell 13.38%. In addition, the bonds of Evergrande group also fell sharply, with 15 Evergrande 03 down nearly 13%, 19 Evergrande 02 down more than 11% and 19 Evergrande 01 down more than 11%.
Today, the decline continued. By the end of the 20th, the market value of China Evergrande had dropped by 10.23%, once more than 15% during the day. The market value of China Evergrande had fallen below the 100 billion mark, with a corresponding market value of HK $97.6 billion, half of the market value when it released its 2020 results on March 31; Evergrande motor declined by 11.18%, with a market value of HK $139.7 billion, three-quarters lower than that of HK $554.1 billion on March 31. In addition, Evergrande’s property appraisal rose slightly by 0.15% compared with yesterday’s, Evergrande’s network rose slightly by 1.73%, and the decline of Evergrande’s bonds narrowed compared with the previous day, with “15 Evergrande 03” down 2.09%, “19 Evergrande 02” down 3.48% and “19 Evergrande 01” down 6.07%.
It is only three months since Evergrande released its 2020 results on March 31. The market value of China Evergrande has evaporated by half, and the market value of Evergrande automobile has evaporated by more than 400 billion Hong Kong dollars. This may also explain why a 130 million pre litigation property preservation has made Evergrande a dog with a turnover of more than 500 billion last year?
This is just like ants will move wildly before the rainstorm. Banks with risk awareness and safety management awareness may also be the first to sense the danger. Perhaps the market is more worried that the behavior of Guangfa bank will trigger domino effect, leading other banks to follow suit.
In fact, Evergrande’s debt problem has been an indefinite time bomb since 2020. Every time, it will cause market sentiment instability. It seems that every time, Xu Jiayin can spare no effort to avoid danger, even if it is only temporary.
On September 24, 2020, a document entitled “report of Evergrande Group Co., Ltd. on pleading for support for major asset restructuring projects” caused all kinds of speculation. Evergrande had to quickly refute the rumor, saying that “the relevant documents and screenshots are fabricated out of thin air and are pure slander, causing serious damage to our company’s goodwill. Our company strongly condemns, has reported the case to the public security organ, and resolutely uses legal weapons to safeguard the legitimate rights and interests of the company. “.
At the previous Evergrande investor meeting on September 18, Suning said that if Evergrande real estate could not be reorganized and listed in China as scheduled in January 2021, Suning planned to exercise the relevant terms and demand the return of 20 billion yuan of war investment. You know, at this time, Suning is also in debt crisis.
However, Xu Jiayin always has a way. On the evening of September 29 last year, Evergrande announced that Evergrande had signed a supplementary agreement with 86.3 billion of the 130 billion war investment, and the war investment agreed to change to ordinary equity for a long time, and the equity ratio remained unchanged; For the remaining 43.7 billion war investment, Evergrande has completed the negotiation with 15.5 billion war investment and is going through the formalities. 28.2 billion war investment is under negotiation. In a group photo, Xu Jiayin, chairman of the board of directors of Evergrande group, Zhang Jindong, chairman of Suning holdings, Wang Wenyin, chairman of the board of directors of Zhengwei international, ye Yuanxi, chairman of Guangtian holdings, Shao Mingan, chairman of Anxin trust, Tian Jiayu, chairman of Jiayu group and other 130 billion strategic investors attended the signing ceremony, which was a happy scene.