China Evergrande Group's m-cap falls $2.4bn as shares tank 87%
China Evergrande Group is back in the equity market after filing for bankruptcy protection in the US. However, its comeback didn't go as planned. The property behemoth's market capitalization plummeted by nearly $2.4 billion as shares fell up to 87% when trading resumed after a 17-month suspension. The company now has a market cap of $369.73 million. This decline follows Evergrande's claim that it met all Hong Kong Stock Exchange guidance. It is currently the world's most indebted property developer.
Evergrande is facing operational and share performance challenges
Evergrande is at the center of China's property sector crisis. The country's property market has been struggling since Evergrande defaulted on its debt two years ago. The embattled property developer faces numerous operational and share performance challenges. Homebuyers' preference for state-owned developers and Evergrande's inability to benefit from stimulus policies hinder its prospects for repaying debt through housing sales. These factors contribute to the company's bleak outlook.
The company posted a combined loss of $81bn in 2021-2022
Evergrande's financial report last month revealed a combined net loss of $81 billion for 2021 and 2022. In its latest earnings report for the first half of this year, the company's net loss narrowed to $4.53 billion. Liabilities also decreased by 2%. However, its auditor has not issued a conclusion on the report due to multiple uncertainties surrounding the company's future. These uncertainties include Evergrande's ability to successfully implement its offshore debt restructuring plan and negotiate repayment extensions with lenders.
