Evergrande: A Glimmer of Hope Amidst the Real Estate Crisis?
The conglomerate recorded a halving of its losses in the first half of the year

The Chinese real estate giant Evergrande, known as the world's most indebted property company, reported a remarkable halving of its losses in the first half of the year. According to recent reports, the company posted a loss of 4.2 billion euros for the first half of the year, compared to a loss twice as large in the same period the previous year. Despite financial challenges, Evergrande managed to increase its revenue by an impressive 44% in the first six months of the year. This surge is attributed to the successful capitalization on the brief real estate boom at the beginning of the year.
After a trading halt of more than a year, Evergrande shares will be traded again on the Hong Kong Stock Exchange starting Monday. The conglomerate stated that all guidelines required by the exchange have been met and all outstanding financial results have been published. The trading halt was imposed, among other reasons, due to numerous ongoing investigations.
However, Evergrande's financial situation remains tense. The company estimates its debts at around 303.6 billion euros. Of concern is also the drastic decline in liquidity: Evergrande currently has cash reserves of only about 515 million euros, compared to 1.85 billion euros the previous year. As early as 2021, the conglomerate had difficulty paying interest on its loans, and insolvency was declared in the US in August.
Evergrande is symbolic of the ongoing crisis in the Chinese construction sector. Since the late 1990s, the industry experienced a boom, but over time, many companies accumulated debt. Despite regulatory measures introduced in 2020 to combat over-indebtedness, many large developers could not complete their projects – with Evergrande being the most prominent example.
The future of the conglomerate remains uncertain. A court in Hong Kong will decide in October on a possible breakup of Evergrande. In March, the company presented a restructuring plan that proposes offering creditors shares in subsidiaries, such as the electric car subsidiary Evergrande NEV. In an attempt to stabilize the beleaguered real estate industry, the Chinese government has taken support measures in recent weeks by granting more loans to property developers and easing certain regulations. It remains to be seen whether these measures will be sufficient to get the industry back on track.
