China's Evergrande Group shares plunge by over 80% in Hong Kong
real estate developer, Evergrande Group are bleeding in red as the stock plunged 87% in Hong Kong trading as they started trading for the first time in a year and a half. Over 99% of the share value of embattled Chinese developers has been lost in the past three years. On Monday, Evergrande's market value shrank to just HK$4.6 billion ($586 million) from a peak of more than $50 billion in 2017.
On Sunday, the realty firm posted a loss of 33 billion yuan ($4.5 billion) for the first six months of the year. However, that was an improvement on the 77.4 billion yuan loss it posted for the same period last year. On 28 August, China Evergrande Group, the defaulted developer at the heart of the country’s real estate crisis resumed trading after a 17-month halt.
The trading of Evergrande Group was suspended on March 18, 2022, with the company has lost over 95% of its market capitalisation from its peak. The property developer released long-delayed earnings last month for 2021 and 2022 to resume trading in the Hong Kong stock exchange. The Chinese developed claimed that conducted an independent investigation into the enforcement by banks of pledge guarantees for its Evergrande Property Services unit and addressed auditor modifications.
Several real estate developers have been hit in China due to the recent crackdown by the Chinese government on the booming real estate industry to cut risk and make homes more affordable. China’s real estate sector is unraveling and risks are spreading to the country’s $60 trillion financial system. China’s existing policies have failed to sustain a rebound in the property market as price declines extend across the nation, putting the government’s 5% economic growth target at risk.
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