Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Evergrande Property Services / Event-Driven

The plight of <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande (3333 HK)</a>, the "world's most indebted property developer" has been exhaustively covered and picked apart both here at Smartkarma and in the media. (Although I highly recommend <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a>'s Bloomberg <a href="https://www.bloomberg.com/news/articles/2021-09-20/understanding-evergrande-the-chinese-real-estate-conglomerate-that-s-nearing-collapse?sref=frV97TwV" target="_blank" rel="noopener">podcast</a> for his bird's eye synopsis).
Concerns for the embattled real estate play are leading to formerly friendly and close shareholders exiting at massive losses, such as recently suspended <a href="https://www.smartkarma.com/entities/chinese-estates-holdings-limited" target="_blank" data-smartkarma-citation="entities:20954:1" rel="noopener">Chinese Estates Holdings (127 HK)</a> (as discussed in <a href="https://skr.ma/1HQM2" target="_blank" rel="noopener">Chinese Estates (127 HK): Potential Privatisation?</a>); and spreading to smaller investors such as <a href="https://www.smartkarma.com/entities/blue-river-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20130:1" rel="noopener">Blue River Holdings (498 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1004/2021100403346.pdf" target="_blank" rel="noopener">dumping</a> <a href="https://www.smartkarma.com/entities/china-evergrande-new-energy-vehicle-group-ltd" target="_blank" data-smartkarma-citation="entities:713:1" rel="noopener">Evergrande Vehicle (708 HK)</a> (reportedly missed its last payroll payment) at a material loss - Blue River also sold stakes in Evergrande and <a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> (EPS). <a href="https://www.smartkarma.com/entities/china-strategic-hldgs-ltd" target="_blank" data-smartkarma-citation="entities:20588:1" rel="noopener">China Strategic Hldgs (235 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0921/2021092101057.pdf" target="_blank" rel="noopener">announced</a> on the 21 September it proposes to sell its 1.37% stake in Evergrande Vehicle. 
Evergrande has also been selling off assets, most recently a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0929/2021092900039.pdf" target="_blank" rel="noopener">19.93% stake</a> in <a href="https://www.smartkarma.com/entities/shengjing-bank-co-ltd-h" target="_blank" data-smartkarma-citation="entities:96:1" rel="noopener">Shengjing Bank Co Ltd H (2066 HK)</a> for ~RMB10bn. 
Now we have Evergrande <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1004/2021100400771.pdf" target="_blank" rel="noopener">suspended</a> due to a material transaction; EPS due to a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1004/2021100400799.pdf" target="_blank" rel="noopener">possible general Offer</a>; and the intriguing part, <a href="https://www.smartkarma.com/entities/hopson-development-holdings" target="_blank" data-smartkarma-citation="entities:8108:1" rel="noopener">Hopson Development (754 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1004/2021100400101.pdf" target="_blank" rel="noopener">suspended</a> due the acquisition of a company "and the relevant possible mandatory offer to acquire the shares of the" company.
China's state-backed Global Times <a href="https://www.globaltimes.cn/page/202110/1235627.shtml" target="_blank" rel="noopener">said</a> Hopson will buy a 51% stake in EPS "and the deal could be valued at more than 40 billion HKD" ($5.1bn). One of those media sources appears to be <a href="https://www.cls.cn/detail/846513" target="_blank" rel="noopener">Cailian Press</a>, which also has SOE affiliation. Jiemian.com, Cailian's sister publication - the two merged in <a href="https://www.chinamoneynetwork.com/2018/02/28/chinese-media-firms-jiemian-cailian-press-merge-creating-financial-information-giant" target="_blank" rel="noopener">February 2018</a> - <a href="https://www.jiemian.com/article/6667341.html" target="_blank" rel="noopener">reckons</a> the fine print on a deal won't be known for a few days.<a href="https://www.jiemian.com/article/6667341.html" target="_blank" rel="noopener"></a>
All three companies remain suspended at the time of writing. Given this transaction could come out any old way, this insight touches on some of the permutations Hopson may take to gain majority control in EPS, if that is the end-game.

The plight of Evergrande (3333 HK), the "world's most indebted property developer" has been exhaustively covered and picked apart both here at Smartkarma and in the media. (Although I highly recommend Travis Lundy's Bloomberg podcast for his bird's eye synopsis).
Concerns for the embattled real estate play are leading to formerly friendly and close shareholders exiting at massive losses, such as recently suspended Chinese Estates Holdings (127 HK) (as discussed in Chinese Estates (127 HK): Potential Privatisation?); and spreading to smaller investors such as Blue River Holdings (498 HK) dumping Evergrande Vehicle (708 HK) (reportedly missed its last payroll payment) at a material loss - Blue River also sold stakes in Evergrande and Evergrande Property Services (6666 HK) (EPS). China Strategic Hldgs (235 HK) announced on the 21 September it proposes to sell its 1.37% stake in Evergrande Vehicle. 
Evergrande has also been selling off assets, most recently a 19.93% stake in Shengjing Bank Co Ltd H (2066 HK) for ~RMB10bn. 
Now we have Evergrande suspended due to a material transaction; EPS due to a possible general Offer; and the intriguing part, Hopson Development (754 HK) suspended due the acquisition of a company "and the relevant possible mandatory offer to acquire the shares of the" company.
China's state-backed Global Times said Hopson will buy a 51% stake in EPS "and the deal could be valued at more than 40 billion HKD" ($5.1bn). One of those media sources appears to be Cailian Press, which also has SOE affiliation. Jiemian.com, Cailian's sister publication - the two merged in February 2018 - reckons the fine print on a deal won't be known for a few days.
All three companies remain suspended at the time of writing. Given this transaction could come out any old way, this insight touches on some of the permutations Hopson may take to gain majority control in EPS, if that is the end-game.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> is a Chinese property management provider. The controlling shareholder is the <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande (3333 HK)</a>, which represents 60.96% of outstanding shares. It floated on 2 December 2020 to raise net proceeds of US$930 million (gross proceeds around US$1.8 billion) at HK$8.80 per share.  Evergrande Property Services entered a trading halt today pursuant to the Hong Kong Code on Takeovers and Mergers. Evergrande is in talks to sell a 51% controlling stake to <a href="https://www.smartkarma.com/entities/hopson-development-holdings" target="_blank" data-smartkarma-citation="entities:8108:1" rel="noopener">Hopson Development (754 HK)</a> for more than HK$40 billion ($5 billion), according to the Chinese financial news platform Cailian. Hopson also entered a trading halt today citing a major transaction to acquire the shares of a company listed on the HKEx and the relevant possible mandatory offer pursuant to the Hong Kong Code on Takeovers and Mergers.The potential stake sale was anticipated as Evergrande flagged on 14 September that it was actively exploring with potential investors the sales of part of its interests in <a href="https://www.smartkarma.com/entities/china-evergrande-new-energy-vehicle-group-ltd" target="_blank" data-smartkarma-citation="entities:713:1" rel="noopener">Evergrande Auto (708 HK)</a> and Evergrande Property Services.The rumoured Evergrande Property Services valuation implies a possible general offer of HK$3.70 per share, a -27.7% discount to the last close price of HK$5.12 per share. The steep discount to the last close is perhaps unsurprisingly as Evergrande is a distressed seller. The potential sale even at a distressed price could help Evergrande buy short-term breathing space to its liquidity issues.    If the potential deal materialises, Evergrande will cease to be the controlling shareholder and hold 9.96% of the outstanding shares. Evergrande Property Services’ shares have sunk 41% YTD due to the liquidity issues plaquing Evergrande. A new controlling shareholder will gradually reduce Evergrande Property Services reliance on Evergrande and also remove a significant share overhang.<div class="content-highlight">
Clearly, there will be limited shareholders who will accept the possible general offer price at a -27.7% discount to the last close. In the short term, Evergrande Property Services shares will likely be under pressure until the deal closes and there are some signs of closure on Evergrande's liquidity issues. 
While this potential transaction represents a sale at a distressed price (below the all-time low share price), the shift to a more stable controlling shareholder along with a market focus on fundamentals/valuation will help in the re-rating of Evergrande Property Services over the medium-term. 
</div>

Evergrande Property Services (6666 HK) is a Chinese property management provider. The controlling shareholder is the Evergrande (3333 HK), which represents 60.96% of outstanding shares. It floated on 2 December 2020 to raise net proceeds of US$930 million (gross proceeds around US$1.8 billion) at HK$8.80 per share.  Evergrande Property Services entered a trading halt today pursuant to the Hong Kong Code on Takeovers and Mergers. Evergrande is in talks to sell a 51% controlling stake to Hopson Development (754 HK) for more than HK$40 billion ($5 billion), according to the Chinese financial news platform Cailian. Hopson also entered a trading halt today citing a major transaction to acquire the shares of a company listed on the HKEx and the relevant possible mandatory offer pursuant to the Hong Kong Code on Takeovers and Mergers.The potential stake sale was anticipated as Evergrande flagged on 14 September that it was actively exploring with potential investors the sales of part of its interests in Evergrande Auto (708 HK) and Evergrande Property Services.The rumoured Evergrande Property Services valuation implies a possible general offer of HK$3.70 per share, a -27.7% discount to the last close price of HK$5.12 per share. The steep discount to the last close is perhaps unsurprisingly as Evergrande is a distressed seller. The potential sale even at a distressed price could help Evergrande buy short-term breathing space to its liquidity issues.    If the potential deal materialises, Evergrande will cease to be the controlling shareholder and hold 9.96% of the outstanding shares. Evergrande Property Services’ shares have sunk 41% YTD due to the liquidity issues plaquing Evergrande. A new controlling shareholder will gradually reduce Evergrande Property Services reliance on Evergrande and also remove a significant share overhang.
Clearly, there will be limited shareholders who will accept the possible general offer price at a -27.7% discount to the last close. In the short term, Evergrande Property Services shares will likely be under pressure until the deal closes and there are some signs of closure on Evergrande's liquidity issues. 
While this potential transaction represents a sale at a distressed price (below the all-time low share price), the shift to a more stable controlling shareholder along with a market focus on fundamentals/valuation will help in the re-rating of Evergrande Property Services over the medium-term. 


Hopson Development’s Potential 51% Stake in Evergrande Property Services

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

It all started with the injury that Chen, the top female badminton player, suffered during China National Games two weeks ago that went viral and fans took it to <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a> . It is unlikely that the injured toe will cause a massive product recall as it is not a life-threatening injury but it definitely warrants some further investigation by the R&amp;D team that may lead to either an increase of R&amp;D cost, an increase in the COGS that will decrease GPM or extra marketing costs as part of giving players more shoes to prevent injuries. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/932/original/image?1632657827" class="editor-image img-responsive" data-smartkarma-image-id="231932"></figure>

It all started with the injury that Chen, the top female badminton player, suffered during China National Games two weeks ago that went viral and fans took it to Weibo Corp (WB US) . It is unlikely that the injured toe will cause a massive product recall as it is not a life-threatening injury but it definitely warrants some further investigation by the R&amp;D team that may lead to either an increase of R&amp;D cost, an increase in the COGS that will decrease GPM or extra marketing costs as part of giving players more shoes to prevent injuries. 


SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

SGX Asia Currencies and Commodities Insights

<div>
I estimate <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">China Evergrande Group (3333 HK)</a> (CEG) is trading at an extraordinary discount to NAV of 93% against a one-year average of 77%. 
</div>
<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/229/889/original/image_37048166931631684887321.png?1631684888" class="editor-image img-responsive" data-smartkarma-image-id="229889"></figure>
</div>
<div style="text-align: left;" class="content-caption">Source: CapIQ, my estimates. According to <a href="https://www.smartkarma.com/entities/shengjing-bank-co-ltd-h" target="_blank" data-smartkarma-citation="entities:96:1" rel="noopener">Shengjing Bank Co Ltd H (2066 HK)</a>'s <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0408/2021040802085.pdf" target="_blank" rel="noopener">2020 annual report</a> (page 63), CEG holds 3.201bn domestic shares. For simplistic sake, I've pegged those shares at the price of Shengjing's H shares. According to <a href="https://www.smartkarma.com/entities/hengten-networks-group-ltd" target="_blank" data-smartkarma-citation="entities:3296:1" rel="noopener">HengTen Ltd (136 HK)</a>'s <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0427/2021042700547.pdf" target="_blank" rel="noopener">2020 annual report</a> (page 13), CEG held 55.64% of shares out. But Evergrande has been selling, and now holds <a href="https://di.hkex.com.hk/di/NSForm2.aspx?fn=CS20210826E00320&amp;sa2=as&amp;sid=223&amp;corpn=HengTen+Networks+Group+Ltd.&amp;sd=15%2f09%2f2020&amp;ed=15%2f09%2f2021&amp;cid=0&amp;sa1=cl&amp;scsd=15%2f09%2f2020&amp;sced=15%2f09%2f2021&amp;sc=136&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">26.55%</a>.  For the stub ops, these are simply priced at book. A basket of peers is trading at ~0.6x, so probably a tad generous.</div>
The problem with the calculation is that it marks the "stub ops" - the consolidated but unlisted portions of the business, predominantly Hengda Real Estate - at 1.0x book. Its competitors trade at 0.6x book on average so if one were to remove 40% of the value of the stub ops, that would eliminate roughly three quarters of the "NAV." That sounds huge but if you eliminate three quarters of the NAV, it means the 93% discount drops to 70% (the magic of compounding, in reverse), which still might be attractive. 
The problem above and beyond that is that when a company is in "unprecedented difficulties" as the company said yesterday, the value of the assets themselves may be in question.
Evergrande's liquidity crunch has been discussed at length here at Smartkarma, most recently by me in <a href="https://skr.ma/jrXuN" target="_blank" rel="noopener">StubWorld: What To Do With Evergrande?</a>; and in greater depth by <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a>, in which he said in his latest insight <a href="https://skr.ma/KkUHL" target="_blank" rel="noopener">Evergrande as a Study of Quantum Mechanics Theory</a>: 
<blockquote>
Outside observers are looking at the situation and wondering whether Schrödinger's Cat is dead or alive.
Any process which requires a time-constrained liquidation of assets usually ends up with the asset owner suffering from "fire sale prices." Given the leverage inherent in Evergrande, this should not come out well for shareholders. 
</blockquote>
<ul style="list-style-type: disc;">
<li>It need not be said, the general consensus is bearish.</li>
</ul>
<hr>
<div>
<h3>The New News</h3>
<ul>
<li>Early yesterday morning, Evergrande <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0914/2021091400059.pdf" target="_blank" rel="noopener">announced</a> it expects significant declines in contract sales in September.</li>
<li>Contract sales in June, July, and August 2021 were to RMB71.63bn, RMB43.78bn, and RMB38.08bn.</li>
<li>Often the month of September is when real estate companies in China record higher contract sales of properties. Evergrande said: "ongoing negative media reports concerning the Group have dampened the confidence of potential property purchasers in the Group."</li>
<li>Evergrande added it is actively exploring with potential investors the sales of part of its interests in <a href="https://www.smartkarma.com/entities/china-evergrande-new-energy-vehicle-group-ltd" target="_blank" data-smartkarma-citation="entities:713:1" rel="noopener">Evergrande Auto (708 HK)</a> and <a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> - though no material progress has been made -  plus bringing in new investors to the company and its other subsidiaries.</li>
</ul>
<blockquote>
In view of the difficulties, challenges and uncertainties in improving its liquidity .... there is no guarantee that the Group will be able to meet its financial obligations under the relevant financing documents and other contracts.
</blockquote>
<ul>
<li>Evergrande has now engaged Houlihan Lokey (China) Limited and Admiralty Harbour Capital Limited to assess the company's capital structure.</li>
</ul>
Separately ...
<ul>
<li>Chinese media has lit up recently as property buyers raise concerns their apartments may not ever be completed; and concerns have also been voiced from (mainly ) retail investors (many of whom are Evergrande employees) who invested in wealth management products in which the proceeds were used to fund Evergande's property projects. </li>
<li>This culminated in scores of people protesting outside Evergrande's headquarters in Shenzhen earlier this week according to news reports from Reuters, <a href="https://www.thestandard.com.hk/section-news/section/2/234150/Evergrande-tries-to-calm-investors" target="_blank" rel="noopener">The Standard</a>, and others. </li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/229/892/original/image?1631686617" class="editor-image img-responsive" data-smartkarma-image-id="229892"></figure>
Not the ideal welcoming party when you arrive at work in the morning  - police outside one of Evergrande's offices. (photo source: <a href="https://www.mingtiandi.com/real-estate/finance-real-estate/china-evergrande-hires-houlihan-lokey-as-financial-advisor/" target="_blank" rel="noopener">Mingtiandi</a>)
</div>
<div>
<ul>
<li>Reportedly Evergrande is offering three repayment options for wealth management buyers:  via cash installments, starting with 10% of their principal and interest of their matured products, with the remainder through 10% installments per annum; repayment via property assets; or investors can apply the outstanding product value to offset the balance of any Evergrande residential unit purchased. The fine print has yet to be ironed out. </li>
<li>Media sources are reporting what has been speculated upon for days... that Evergrande will not pay its loan interest payments due on 20th September. Apparently the Ministry of Housing and Urban-Rural Development notified banks today (Bloomberg). </li>
</ul>
</div>
The fact Evergrande's liquidity issue has now gone fully public makes one question how it can reverse this negative trend.


I estimate China Evergrande Group (3333 HK) (CEG) is trading at an extraordinary discount to NAV of 93% against a one-year average of 77%. 




Source: CapIQ, my estimates. According to Shengjing Bank Co Ltd H (2066 HK)'s 2020 annual report (page 63), CEG holds 3.201bn domestic shares. For simplistic sake, I've pegged those shares at the price of Shengjing's H shares. According to HengTen Ltd (136 HK)'s 2020 annual report (page 13), CEG held 55.64% of shares out. But Evergrande has been selling, and now holds 26.55%.  For the stub ops, these are simply priced at book. A basket of peers is trading at ~0.6x, so probably a tad generous.
The problem with the calculation is that it marks the "stub ops" - the consolidated but unlisted portions of the business, predominantly Hengda Real Estate - at 1.0x book. Its competitors trade at 0.6x book on average so if one were to remove 40% of the value of the stub ops, that would eliminate roughly three quarters of the "NAV." That sounds huge but if you eliminate three quarters of the NAV, it means the 93% discount drops to 70% (the magic of compounding, in reverse), which still might be attractive. 
The problem above and beyond that is that when a company is in "unprecedented difficulties" as the company said yesterday, the value of the assets themselves may be in question.
Evergrande's liquidity crunch has been discussed at length here at Smartkarma, most recently by me in StubWorld: What To Do With Evergrande?; and in greater depth by Travis Lundy, in which he said in his latest insight Evergrande as a Study of Quantum Mechanics Theory: 

Outside observers are looking at the situation and wondering whether Schrödinger's Cat is dead or alive.
Any process which requires a time-constrained liquidation of assets usually ends up with the asset owner suffering from "fire sale prices." Given the leverage inherent in Evergrande, this should not come out well for shareholders. 


It need not be said, the general consensus is bearish.



The New News

Early yesterday morning, Evergrande announced it expects significant declines in contract sales in September.
Contract sales in June, July, and August 2021 were to RMB71.63bn, RMB43.78bn, and RMB38.08bn.
Often the month of September is when real estate companies in China record higher contract sales of properties. Evergrande said: "ongoing negative media reports concerning the Group have dampened the confidence of potential property purchasers in the Group."
Evergrande added it is actively exploring with potential investors the sales of part of its interests in Evergrande Auto (708 HK) and Evergrande Property Services (6666 HK) - though no material progress has been made -  plus bringing in new investors to the company and its other subsidiaries.


In view of the difficulties, challenges and uncertainties in improving its liquidity .... there is no guarantee that the Group will be able to meet its financial obligations under the relevant financing documents and other contracts.


Evergrande has now engaged Houlihan Lokey (China) Limited and Admiralty Harbour Capital Limited to assess the company's capital structure.

Separately ...

Chinese media has lit up recently as property buyers raise concerns their apartments may not ever be completed; and concerns have also been voiced from (mainly ) retail investors (many of whom are Evergrande employees) who invested in wealth management products in which the proceeds were used to fund Evergande's property projects. 
This culminated in scores of people protesting outside Evergrande's headquarters in Shenzhen earlier this week according to news reports from Reuters, The Standard, and others. 


Not the ideal welcoming party when you arrive at work in the morning  - police outside one of Evergrande's offices. (photo source: Mingtiandi)



Reportedly Evergrande is offering three repayment options for wealth management buyers:  via cash installments, starting with 10% of their principal and interest of their matured products, with the remainder through 10% installments per annum; repayment via property assets; or investors can apply the outstanding product value to offset the balance of any Evergrande residential unit purchased. The fine print has yet to be ironed out. 
Media sources are reporting what has been speculated upon for days... that Evergrande will not pay its loan interest payments due on 20th September. Apparently the Ministry of Housing and Urban-Rural Development notified banks today (Bloomberg). 


The fact Evergrande's liquidity issue has now gone fully public makes one question how it can reverse this negative trend. 

Evergrande (3333 HK): Now Homebuyers And Employees Are Revolting

China

Chengdu B-Ray Media Co., Ltd. provides newspaper publishing, printing, delivery, and advertising services.  The Company also sells newsprints and printing equipment.

Jishi Media Company Limited constructs, manages and maintains cable television networks. The Company's main businesses include basic radio and television transmission services, digital television value-added services, two-way interactive broadband services, and cable-based network services.

Beijing HualuBaina Film & TV Company Limited invests in, produces, distributes films and TV dramas, and engages in film derivates businesses. The Company's main products include TV dramas and films, product placements, film advertisements, television and film books, and other related products.

Beijing Hualu Baina Film & Tv (300291 CH)

Shanghai Xinhua Media Co., Ltd. is principally involved  in culture and media industry. The Company offers books, video products, school supplies and stationeries, logistics service, as well as supermarket retailing business.

Shanghai Xinhua Media Co, Ltd. (600825 CH)

Hubei Broadcasting and Television Information Network Co., Ltd. undertakes investment and operational management of the digital cable TV industry; cable TV related product R&D, production and sales; design, production and agency work of advertising, movies, TV and animation; and planning of film and television featured films.

Hubei Radio And Tlvsn Infrn Ntwrk (000665 CH)

Inly Media Co., Ltd. provides strategy consulting and media agency services. The Company engages in content marketing, brand management and advertising services.

Northern United Publishing & Media (Group) Co., Ltd. publishes books, distributes magazines, and prints commercial receipts. The Company produces kid books such as coloring books and reading books, bibliographic, and teen age book. The Company uses single paper-base media.

Northern United Publishing&Md(Grp) (601999 CH)

Songliao Automobile Company, Ltd. manufactures and markets vans and auto body parts. The Company sells its products in northeastern China.

Huayi Brothers Media Corporation produces and distributes movies and dramas. The Company also provides artists management services.

Zhejiang Talent Television & Film Co., Ltd. partakes in the investment, production, promotion, and distribution of both Chinese domestic and imported films.

Hathway Cable and Datacom Limited is a cable television service provider.  The Company offers analog and digital cable television services.  Hathway also provides cable broadband services as well.

Avex Inc. operates entertainment businesses. The Company provides music production, live communication management, artist training, content creation, and other services. Avex offers services in Japan.

oOh!media Ltd is a media company. The Company provides advertising and marketing solutions, campaign production, campaign management, creative and digital solutions.

Prime Focus Ltd. offers motion picture post production and visual effects services.  The Company offers visual effects, digital film lab, telecine, editing, and motion control to high-definition production services.

MPS Ltd. is a publisher of school and college textbooks, reference books, general non-fiction titles and atlases.  The Company also has an online learning division that develops and manages educational portals.  MPS's information processing division supplies typesetting and data digitization services.

SEPTENI Holdings Co., Ltd. is a holding company, which manages operations for its subsidiaries.  Group companies provide Internet advertising services, direct mailing, and catalog advertising.

VGI Public Company Limited operates as an advertising media company. The Company offers out of home advertising, campaign measurement, target advertising campaign, and offline-to-online solutions. VGI serves customers globally.

Gray Television, Inc. operates television stations.  The Company operates in the southern, midwestern, and southwestern United States.

PT Surya Citra Media Tbk has operations in mass media consultation, in house production and other multimedia services.  The Company's subsidiaries, SCTV and Indosiar provides television broadcasting throughout Indonesia.

AMC Networks Inc. operates as a holding company which produces independent films and original programming through its subsidiaries. The Company broadcasts and distributes its content on television, through online streaming services and on mobile platforms.

Evergrande Auto researches, develops, and manufactures new energy vehicles. The Company engages in vehicle manufacturing, electric motor control, power batteries, vehicle sales, smart charging, shared mobility, and more. Evergrande Auto also operates health management businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Evergrande Auto (708 HK)

Hopson Navigates Evergrande's Fire Sale

Indebted Evergrande and Hopson in trading halt over the possible sale of property management unit, the completion of which may trigger a general...

David Blennerhassett

Hopson Development’s Potential 51% Stake in Evergrande Property Services

Evergrande is in talks to sell a 51% stake in Evergrande Services to Hopson Dev for more than HK$40 bn. The shift to a more stable controlling...

Arun George

Li Ning (2331): Toe Injury

The injured toe will lead to either an increase in R&D cost, an increase in the COGS that will decrease GPM or extra marketing costs as part of...

Henry Soediarko

SGX Asia Currencies and Commodities Insights

By Macro Hive SGX Asia Currencies Insights Yuan stability should continue given financial stability risks from Evergrande. We favour being...

Singapore Exchange Ltd (SGX)

Evergrande (3333 HK): Now Homebuyers And Employees Are Revolting

I think we just got a peek at Schrödinger's Cat. And it's dead. Evergrande Group needs government intervention right now.

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)