HONG KONG, Jul 17 (Reuters) – China Evergrande Group (3333.HK), the world’s largest indebted real estate developer, is expected to post significant losses on Monday in its highly anticipated 2021 and 2022 results – figures the market will look to for updates on the liquidity of the company.
The developer went into default in late 2021 and is struggling to complete projects and pay back its many suppliers and creditors. After announcing an offshore debt restructuring plan in March, it is now receiving support to complete the process.
With about $300 billion in total liabilities, Evergrande’s debt problem has spread throughout China’s real estate industry, a pillar of the world’s second-largest economy, leading to a string of defaults and unfinished homes in the country.
The market will be looking for updates on Evergrande’s liquidity and liabilities, as well as Evergrande’s business and operations, in 2021 and 2022 results, said Sandra Chow, co-head of Asia Pacific Research at CreditSights.
However, a clearer picture will only emerge from the developer’s performance in the first half of 2023, she added.
According to the regulations, companies must publish the results of the first six months of the year at the end of August.
Charles Macgregor, head of Asia at Lucror Analytics, said he was not optimistic about Evergrande’s results. “Results are meaningless if the business model is broken,” he added.
Analysts expect Evergrande to post hefty losses for 2021 and 2022, years in which contracted revenue fell to 443 billion yuan and 31.7 billion yuan, respectively, from 723 billion yuan in 2020.
Creditors said they also looked forward to updates on the company’s offshore debt restructuring plan, as it failed to release the latest figures on creditor support after extending the deadline for receiving stimulus to May.
Evergrande, which needed more than 75% in creditor value in each class of debt to pass the plan, said in April that 77% holders of Class A debt and 30% holders of Class C debt, among others, had submitted their respective support.
Trading in Evergrande’s Hong Kong-listed shares has been halted since March 21 last year, pending financial results and an investigation into a seized deposit of 13.4 billion yuan from a unit. The company risks being delisted if its shares remain suspended for 18 months.
However, it is unclear whether trading in the shares will resume on Tuesday, as the company must also meet other requirements from the exchange, including demonstrating that the company has adequate internal controls and procedures in place to meet its obligations under the listing rules.
($1 = 7.1643 Chinese Yuan)
Reporting by Clare Jim; Edited by Himani Sarkar
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