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Indebted China Evergrande expects H1 profit to plunge as much as 39%; shares slip By Reuters 

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HONG KONG (Reuters) – China Evergrande Group, the country’s most indebted property developer, said late on Wednesday it expected its six-month net profit to slump as much as 39% from a year earlier, dragged by a drop in selling prices and higher expenses.

The expected drop, to between 9 billion yuan ($1.39 billion) and 10.5 billion yuan in the six months ended June, is also partly due to losses of 4 billion yuan and 4.8 billion yuan in the company’s property and electric car businesses, respectively, Evergrande said in a filing.

Evergrande shares fell as much as 5% in early trade after markets opened on Thursday, while Evergrande New Energy Vehicle stocks fell over 12% to the lowest since March 31, 2020. Shares of the car business have shed 80% this year.

The developer, however, said an 18.5 billion yuan gain from the sale of some shares and marked-to-market holding in internet unit Hengten Networks had helped offset some losses.

Hengten shares fell more than 6%, while the broader marker eased 0.4%.

Evergrande has been scrambling to raise funds it needs to pay its many lenders and suppliers, while regulators and financial markets are worried that any crisis at Evergrande could ripple through China’s banking system.

The company is due to report its interim results on Tuesday.

($1 = 6.4736 )

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