Evergrande focuses activities on the electric car business
A price rally of the Evergrande Auto share (HK 0708) triggered the announcement by founder Hui Ka Yan that he would like to focus on the auto business in the future. The stock rose nearly 12% today. The transformation should take place over a period of 10 years. Evergrande will gradually reduce its activities in the real estate sector during this period. An announcement that met the goodwill of the media. But which leaves questions unanswered.
Alignment good - problems remain
The focus on the electric car business may be trend-setting. But does not solve the current burning problems. They seem to be cautiously at least slightly defused. Evergrande resumes work on more than 40 projects in Guangdong Province and announces completion. For Tuesday, the state commission for development and reform (NDRC) also cited the most troubled real estate developers to Beijing.
Evergrande is on the invitee list. The issue is the piling up of dollar bond payment deadlines that are not being met. Is there any sign of government intervention here that could lead to a further easing of the situation?
Open questions remain
It remains to be seen how serious Hui Ka Yan is with the announcement. Anyway promised he does not want to buy any land for further real estate speculation during the next 10 years. A promise that is primarily of symbolic value and should not have been difficult for him. Because China Evergrande is sitting on an enormous supply of land reserves, some in a prime location. The company has always refused to raise and sell this treasure.
Two questions remain open. On the one hand, the plans still require a lot of liquidity, the possible origin of which must be clarified. Who will finance the electric car business in the future?
On the other hand, there is now officially a question mark over the Swedish efforts to gain independence. Will Evergrande want to do without NEVS? Or is this more unlikely now than ever?
2 thoughts on "Evergrande focuses activities on the electric car business"
You don't even know in which direction it is going. I am still positive or negative but first have to see facts. We have heard so many words and promises.
It hurts to see that such a beautiful business, what Saab Automotive was one, has to go on like this.
Well, this message supports my thesis that the owners wanted to get out of the property and make one on mobility. Only the real estate crisis came too quickly.
Well maybe the Warming SAAB 😉 will come after all
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