BREAKING NEWS: China's Evergrande has officially defaulted

[patero]

Evergrande makes the third payment at the last hour avoiding a default. They are far from out of the woods, they have principal payments on US$3.5 billion dollar denominated bonds due in the first quarter of next year. But their real problem is the US$91 billion in trade payables and wages outstanding, and $31 billion in short term borrowings due next year. It's becoming apparent that a restructuring is going to happen, my guess is the central government is ensuring these interest payments are made to facillitate an orderly dismantling of Evergrande rather than a collapse.

 

[MH.Yang]

whats the relation between nuclear fusion and vertical development ?

Solving the energy problem will lead to the great development of vertical agriculture.

China only problem is low population growth and gender mis match
It would need alot of innovation to tackle this problem

Yes, this is the most serious problem in China. In fact, the Chinese government's crackdown on extracurricular counseling and real estate companies is also partly to stimulate fertility.

 

[ziaulislam]

Solving the energy problem will lead to the great development of vertical agriculture.


Yes, this is the most serious problem in China. In fact, the Chinese government's crackdown on extracurricular counseling and real estate companies is also partly to stimulate fertility.

Easiest way will be to give more freedom to minority groups in the west aand center of country where feritility has been traditonally higher ..also govt has to provide child support

This may be far fetched but musk/ jack moa(even if they are chrismatic idiots otherwise) stated that population collapse(not decline) is the biggest threat to europe and china..

 

[MH.Yang]

Easiest way will be to give more freedom to minority groups in the west aand center of country where feritility has been traditonally higher ..also govt has to provide child support

This may be far fetched but musk/ jack moa(even if they are chrismatic idiots otherwise) stated that population collapse(not decline) is the biggest threat to europe and china..

The western and central minority areas have never implemented the family planning policy, which is also the reason for their higher fertility rate before. However, with the economic development of the central and western regions, their fertility rate is also declining rapidly. Now China has abolished family planning, but everyone is unwilling to have children. This is a very serious problem. If China goes into recession one day, it must be because of the population problem.

 

[lcloo]

No headline news on this piece of news from big time anti-China BBC, CNN and Bloomberg. DO you know why???

 

[MH.Yang]

No headline news on this piece of news from big time anti-China BBC, CNN and Bloomberg. DO you know why???

The BBC is helping some losers masturbate. If they don't hear the news that China will collapse, they will be impotence because of fear. We don't have to disturb their orgasm, because in a few months, they will see the truth.

 

[nang2]

The BBC is helping some losers masturbate. If they don't hear the news that China will collapse, they will be impotence because of fear. We don't have to disturb their orgasm, because in a few months, they will see the truth.

That is a very strange idea. If I open a business and sell you my bond, you buy my bond and my business goes south, you are the loser and I am NOT?

 

[MH.Yang]

That is a very strange idea. If I open a business and sell you my bond, you buy my bond and my business goes south, you are the loser and I am NOT?

To be honest, if Evergrande goes bankrupt, both China and the USA will lose. Wall Street lost money and China lost credit. This is also why Wall Street still believes that the Chinese govt may save Evergrande.

 

[Shotgunner51]

To be honest, if Evergrande goes bankrupt, both China and the USA will lose. Wall Street lost money and China lost credit. This is also why Wall Street still believes that the Chinese govt may save Evergrande.

It's the China government cracking down Evergrande, a private sector listed company, how come the story get spinned into saving Evergrande?

Media like to hype about "debt" as if there's nothing else on a balance sheet, all spotlight on the US$19B bonds to attractive illiterate readers, how about take a look at their last financial report? Total assets ¥2,377B, total liabilities ¥1,966B (US$ bonds included), equity/net assets ¥411B, what bankruptcy? The problem is over-leveraging, lack of liquidity (in their case is low cash, high inventories), perhaps even political (hoarding). If China government or any creditor force a liquidation now, all creditors/suppliers/staff will get paid, only the stock holders get burnt, note market cap as of yesterday already sunk to only ¥36B anyway. Besides its peanut size in financial system (market cap of HKSE roughly HK$50 trillion), the biggest looser is only Xu Jiayin himself, how come the state of China and the USA will lose?

China government is forcing them to monetize their ultra-high inventories aka the unsold real estates (¥1,423.8B), no more hoarding or any cartel trick, and deleverage.

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[patero]

It's the China government cracking down Evergrande, a private sector listed company, how come the story get spinned into saving Evergrande?

Media like to hype about "debt" as if there's nothing else on a balance sheet, all eyes are on the US$19B bonds, how about take a look at their last financial report? Total assets ¥2,377B, total liabilities ¥1,966B (US$ bonds included), equity/net assets ¥411B, what bankruptcy? The problem is over-leveraging, lack of liquidity (in their case is low cash, high inventories), perhaps even political. If China government or any creditor force a liquidation now, all creditors/suppliers/staff will get paid, only the stock holders get burnt, note market cap as of yesterday already sunk to only ¥36B anyway. Despite its peanut size in financial system, the biggest looser is only Xu Jiayin himself, how come the state of China and the USA will lose?

China government is forcing them to monetize their ultra-high inventories aka the unsold real estates, no more hoarding, and deleverage.

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There is probably a great deal of politics going on in the background, isn't Xu Jiayin connected to the Jhang Zhemen faction? I'm not going to pretend to understand the political machinations at play, but based on Evergrandes filings to the HKSE they are most definitely in a perilous situation, the markets have priced that in. Evergrande has crossed the three red lines; liability to asset ratio (excluding advance receipts) of less than 70%, net gearing ratio of less than 100%, and cash to short-term debt ratios of more than 1x. This restricts their access to additional financing.

Look at their share price and the heavy discounting on their bonds, and their credit ratings, all have tanked.

 

[khansaheeb]

What were the regulators doing when these companies were getting in debt up to their eyeballs ?

encouraging it.

 

[MH.Yang]

It's the China government cracking down Evergrande, a private sector listed company, how come the story get spinned into saving Evergrande?

Media like to hype about "debt" as if there's nothing else on a balance sheet, all spotlight on the US$19B bonds to attractive illiterate readers, how about take a look at their last financial report? Total assets ¥2,377B, total liabilities ¥1,966B (US$ bonds included), equity/net assets ¥411B, what bankruptcy? The problem is over-leveraging, lack of liquidity (in their case is low cash, high inventories), perhaps even political (hoarding). If China government or any creditor force a liquidation now, all creditors/suppliers/staff will get paid, only the stock holders get burnt, note market cap as of yesterday already sunk to only ¥36B anyway. Despite its peanut size in financial system, the biggest looser is only Xu Jiayin himself, how come the state of China and the USA will lose?

China government is forcing them to monetize their ultra-high inventories aka the unsold real estates (¥1,423.8B), no more hoarding or try any cartel trick, and deleverage.

HK Stock Free Real-time Quote

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If the trade war still now, the Chinese govt can destroy Evergrande. It will be seen as the Chinese govt's counterattack against American capital. If China and the USA cease war, American capital should not bear huge losses because of the executive order of the Chinese govt. This will lead other foreign investors to question the security of China's investment field.


BTW: We are not India. We still welcome investment from the United States, Japan and other countries. Our economic strategy is to support global economic integration. We should not hurt our economic strategy to vent our anger at the USA.

 

[Shotgunner51]

There is probably a great deal of politics going on in the background, isn't Xu Jiayin connected to the Jhang Zhemen faction? I'm not going to pretend to understand the political machinations at play, but based on Evergrandes filings to the HKSE they are most definitely in a perilous situation, the markets have priced that in. Evergrande has crossed the three red lines; liability to asset ratio (excluding advance receipts) of less than 70%, net gearing ratio of less than 100%, and cash to short-term debt ratios of more than 1x. This restricts their access to additional financing.

Look at their share price and the heavy discounting on their bonds, and their credit ratings, all have tanked.

Yes, market always respond to media headlines more than financial report/analysis, perhaps someone sees an opportunity to make a hit, perhaps just pure propaganda crap, I won't know. Xu Jiayin is considered a friend of Jack Ma, but most importantly he "stepped over the line" on hoarding/cartel & leveraging, sure he will be fixed sooner or later. I guess there are more like him in the pipeline.

P.S.: Cash to short-term debt ratio (Current Assets minus Inventories / Current Liabilities) of LESS than 1x, I estimate at about 0.3.

American capital

foreign investors to question the security of China's investment field

We should not hurt our economic strategy to vent our anger at the USA.

 

[nang2]

To be honest, if Evergrande goes bankrupt, both China and the USA will lose. Wall Street lost money and China lost credit. This is also why Wall Street still believes that the Chinese govt may save Evergrande.

Now that makes sense.

It's the China government cracking down Evergrande, a private sector listed company, how come the story get spinned into saving Evergrande?

Media like to hype about "debt" as if there's nothing else on a balance sheet, all spotlight on the US$19B bonds to attractive illiterate readers, how about take a look at their last financial report? Total assets ¥2,377B, total liabilities ¥1,966B (US$ bonds included), equity/net assets ¥411B, what bankruptcy? The problem is over-leveraging, lack of liquidity (in their case is low cash, high inventories), perhaps even political (hoarding). If China government or any creditor force a liquidation now, all creditors/suppliers/staff will get paid, only the stock holders get burnt, note market cap as of yesterday already sunk to only ¥36B anyway. Besides its peanut size in financial system (market cap of HKSE roughly HK$50 trillion), the biggest looser is only Xu Jiayin himself, how come the state of China and the USA will lose?

China government is forcing them to monetize their ultra-high inventories aka the unsold real estates (¥1,423.8B), no more hoarding or any cartel trick, and deleverage.

HK Stock Free Real-time Quote

HK Stock Quick Quote provides information including Free HK shares Real-time Quote, HK Shares Technical Chart, Related A Shares Quote, ADR, HK Shares PE Ratio, HK Shares Yield, HK Shares Earnings Per Share, News, HK Shares Recent Dividend Info, HK Shares Earnings Summary, Outstanding Quantity...

www.aastocks.com

http://stockpage.10jqka.com.cn/HK3333/finance/

Because debt has the highest claim on assets. Defaulting your debt, your creditors can sue you for insolvency that leads to bankrupt legally.

 

[Shotgunner51]

Because debt has the highest claim on assets. Defaulting your debt, your creditors can sue you for insolvency that leads to bankrupt legally.

Yes it is, financial/legal 101. Evergrande is just another day in the business world, just a tiny ¥36B market cap listco owned/controlled by some wannabe cartel guy, creditors/staff/supplier can claim the company assets (¥2.377 trillion lying there) if situation calls for it, and media/people talk about "China collapse"? Sino-US trade war? The lack of basic knowledge like sixth grader kids, even common sense, is baffling.