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 https://www.reuters.com/world/china/chinas-evergrande-group-says-will-maintain-stability-its-operations-2021-08-20 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 Chinese yuan)
(Reporting by Clare Jim in Hong Kong and Anushka Trivedi in Bengaluru; Editing by Himani Sarkar)
