China Evergrande Electric Car Share Price Falls 91% Since February 2021, Loses $82 Billion in Market Value
27th August 2021 | Hong Kong
China Evergrande Electric Car, the listed electric car company of one of China’s largest property developer China Evergrande, has seen its share price falling 91% since February 2021 and losing $82 billion in market value (Feb 2021: $90.5 billion) to the current market capitalisation of $7.4 billion in the latest announcement of a $740 million net loss for the 1st half of 2021 (Feb 2021: HKD 72.25, 27/8/21: HKD 4.37). China Evergrande, which is one of the largest property developer in China and struggling with a high interest bearing loans totalling $88 billion (CNY 570 billion), has been selling its assets to free up cashflow and increase capital and liquidity for the company. China Evergrande Group has also seen its share price falling 74.6% since February 2021 from a market value of $29.3 billion to the current market capitalisation of $7.43 billion (Feb 2021: HKD 17.26, 27/8/21: HKD 4.37). Read More: China Crackdown | Common Prosperity
“ China Evergrande Electric Car Share Price Falls 91% Since February 2021, Loses $82 Billion in Market Value “
Evergrande Group is a Fortune Global 500 enterprise and owns eight major industries, such as Evergrande Real Estate, Evergrande New Energy Auto, Evergrande Property Services, HengTen Networks, FCB, Evergrande Fairyland, Evergrande Health, Evergrande Spring, providing a full range of services to hundreds of millions of customers. Currently, the total assets of Evergrande Group have reached RMB 2.3 trillion, and annual sales volume exceeded RMB 700 billion, with accumulated taxation of more than RMB 300 billion. It has donated more than RMB 18.5 billion to charity and creates more than 3.8 million jobs each year. It has 200,000 employees and ranks 122nd on the Fortune Global 500 list.
China Common Prosperity
China President Xi Jinping, at the 10th Meeting of China Central Finance and Economics Committee, has announced China’s new goal to promote common prosperity for all, not just for a few and not in the form of equal distribution, but common prosperity through a few stages including encouraging hard work and innovation, improving people’s livelihood, creating more inclusive & fair conditions to improve education level & development ability, and creating more opportunities for people to get rich. With the announcement, market analysts and various media reports are anticipating new policies such as higher taxes on high income earners, property tax, inheritance tax, capital gain tax and incentives for charity, philanthropy and corporate social programs.
Since late 2020, China has increased scrutiny on China technology companies on monopolistic behaviours, security & data privacy, capital-raising practices, cryptocurrencies and operations of financial institutions, strengthening regulations, preventing excessive marketing approaches such as using soft pornography involving children & minor to drive usage of platforms and to tackle anti-competitive behaviours. Read More: China Crackdown | Common Prosperity
In August 2021, China Shanghai tax bureau ordered top china actress Zheng Shuang to pay $46 million in fine for tax evasion (CNY 299 million). Pinduoduo, China’s largest agriculture and interactive commerce platform, is donating all of 2021 2nd quarter profits and future quarterly profits to a CNY 10 billion ($1.54 billion) initiative to improve agriculture and help rural communities.
China Huarong Asset Management, China’s largest distressed debt manager which reported a record $15.9 billion loss in 2020 and with shares suspended since April 2021, will receive bailout from China state-owned investors including Citic Group, China Insurance Investment and China Life Asset Management. In January 2021, former Chairman of China Huarong Asset Management Lai Xiaomin was sentenced to death for corruption and receiving $277 million in bribes.
In July 2021, China crackdown on the economy and companies intensify with new regulations on the education and technology sectors, causing Edtech sectors stocks to drop 40% to 80%. Education companies (New Oriental Education -67%, Gaotu Techedu -78% since 23/7/21) are required to re-register as non-profit for selected programsand stopped from raising capital and going abroad. Technology companies such as Meituan, Alibaba, JD.com and Didi are ordered to raise minimum salary levels and reduce load on delivery timing. Tencent have also been ordered to cancel its exclusive music rights within 30 days and have also suspended its WeChat signup. In recent times, China has increased scrutiny on China technology companies on monopolistic behaviours, security & data privacy, capital-raising practices, cryptocurrencies and operations of financial institutions, strengthening regulations, preventing excessive marketing approaches such as using soft pornography involving children & minor to drive usage of platforms and to tackle anti-competitive behaviours. (Edtech ~ Education Technology companies)
- China Common Prosperity: Pinduoduo Donates $1.5 Billion of Profits to Improve China Agriculture and Help Rural Communities
- China Actress Zheng Shuang to Pay $46 Million for Tax Evasion
- China President Xi Jinping to Promote Common Prosperity, Expects New Taxes & Incentives for Social Programs
- China Distressed Asset Manager China Huarong with $15.9 Billion Losses to Receive State Bailout, Citic Group Becomes Key Shareholder
- China Sentenced Former Head of ICBC Shanghai to Lifetime Imprisonment for Receiving $21 Million in Bribes
- United States SEC Increased Oversight of China Companies IPO on Stock Exchange, Disclosures & Ownership Relationships
- China Crackdown Intensify, Changes to Tech Companies & Education Sector to Non-Profit with Share Prices Dropping 40% to 80%
- China Regulators Fine Tech Giants Alibaba, Tencent, Kuaishou, Weibo, Little Red Book for Content with Soft Pornography Involving Minor
- Didi App Download Suspended in China, Faces Lawsuit for Misleading Investor
- China Increased Scrutiny on Foreign IPOs & Tech Giants, Requires Pre-Approval for Offshore IPOs
- China Authority Crackdown on Virtual Currency, Issue Warning to Financial Institutions & Businesses
- 2020 China Private Equity and Venture Capital AUM at $1.04 Trillion, Southeast Asia at $33 Billion