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China Evergrande says contracted sales dropped 38.7% in 2021

An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018.

Bobby Yip | Reuters

BEIJING — Indebted property developer China Evergrande‘s contracted gross sales plunged final 12 months as the true property large struggled to repay collectors.

A submitting Tuesday confirmed the corporate’s contracted gross sales of properties totaled 443.02 billion yuan ($69.22 billion) final 12 months, down 38.7% from the 723.25 billion yuan in contracted gross sales reported for 2020.

Evergrande shares reopened greater in Hong Kong on Tuesday afternoon, with shares attempting to carry positive aspects of about 3%.

Buying and selling was halted as of 9 a.m. Monday, with shares at 1.59 Hong Kong {dollars} (20 cents) every. That is simply above the all-time intraday low of 1.42 Hong Kong {dollars} per share set on Dec. 24, in response to FactSet.

Shares have plunged greater than 88% over the past 250 buying and selling days. The corporate missed funds to collectors in December, Fitch Rankings mentioned, sending the developer into default.

Evergrande, China’s second-biggest developer by gross sales in 2020, is the biggest Chinese language actual property developer by issuance of offshore, U.S. dollar-denominated debt, which stood at $19 billion final 12 months. The developer had a complete of $300 billion in liabilities as of final 12 months.

The corporate mentioned Tuesday it “will proceed to actively preserve communication with collectors, try to resolve dangers and safeguard the reputable rights and pursuits of all events.”

The developer added {that a} demolition order for its Ocean Flower Island venture solely utilized to 39 buildings, in response to Tuesday’s submitting with the Hong Kong inventory alternate.

Evergrande’s public statements have tried to guarantee traders the corporate is finishing and delivering flats to prospects. However demand is drying up for the developer’s future tasks.

The total-year figures point out contracted gross sales of solely 720 million yuan in simply over two months, between Oct. 21 and Dec. 31. In distinction, contracted gross sales in August totaled 38.08 billion yuan, and stood at 3.65 billion yuan between the start of Sept. and Oct. 20.

S&P International Rankings warned in November that an Evergrande default “is highly likely” since the company is no longer able to sell new homes. Like different Chinese language actual property builders, Evergrande’s enterprise mannequin depends closely on gross sales of flats to prospects earlier than the models are accomplished.

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Evergrande’s troubles have raised issues concerning the well being of China’s huge actual property business total.

Chinese language authorities have known as the corporate a “distinctive case.” Analysts have identified that in distinction with different builders, Evergrande made little progress toward complying with new regulations geared toward limiting the business’s reliance on debt.

Nevertheless, a outstanding Chinese language developer that met authorities necessities on debt, has additionally warned of falling gross sales.

Shanghai Shimao advised traders in late December it might be troublesome to hit its full-year contracted gross sales goal of 38 billion yuan since gross sales within the first 11 months of the 12 months have been 28.2 billion yuan, in response to a submitting. Along with inventory declines, the corporate’s bonds have plunged in the previous few months.

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