On the evening of July 27, China Evergrande New Energy Automobile Group Co., Ltd. (hereinafter referred to as "Evergrande Automobile") issued an announcement on the resumption of trading and the resumption of trading.。According to the announcement, Evergrande Auto has applied to the Hong Kong Stock Exchange of China to resume trading in the company's shares from 9 a.m. on July 28 (Friday).。HKEx confirmed the news on Friday morning。

Evergrande Motor has been suspended from trading since April 1, 2022, and has been suspended for nearly 16 months.。According to the HKEx's guidelines for the company's resumption of trading, Evergrande Motor must meet the following three conditions if it wants to resume trading.

(a) publish all financial results required by the Listing Rules but not yet published and address any audit modifications;

(b) certify that the Company complies with Rule 13 of the Listing Rules.24; and

(c) provide all material information to the market to enable shareholders and other investors of the Company to assess the condition of the Company。

● For condition (a), Evergrande Motor has published all unpublished financial results on July 26, including full-year 2021, mid-2022 and full-year 2022 results announcements.。This is the last time Evergrande cars meet the conditions。

But Evergrande's delay in releasing earnings is understandable, as it's really not ideal。According to the financial report, Evergrande Auto recorded a loss of 84 billion yuan in the two years 2021-2022 (RMB, the same below)。In terms of debt, as of December 31, 2022, the Company had accumulated approximately 116 outstanding maturities..2.6 billion yuan, the company's overdue commercial tickets accumulated about 185.1.2 billion yuan。Cash flow conditions are also shrinking sharply.。Cash and cash equivalents at the end of 2022 were only about 2.200 million, compared with 24 at the end of 2021..500 million yuan, 104 in 2020.800 million yuan。

Regardless of the performance, Evergrande eventually made up for the missing performance report and met the conditions (a) for the resumption of trading.。In the performance report, Evergrande also disclosed the company's operating conditions, which also met condition (b) to some extent.。

● For condition (b), the company needs to prove that it complies with Rule 13 of the Listing Rules..Article 24, certifying that the business operated by the Group has sufficient business operations and has assets of considerable value to support its operations to enable the Company's shares to continue to be listed on the Stock Exchange.。

First, in terms of operations, the Company considers revenue from its main business, the research and development, manufacturing and sales of new energy vehicles (collectively, the "Automotive Business"), to be "viable and sustainable."。Prior to the launch of the car, the company generated revenue by providing technical services to technology companies and institutions, selling lithium batteries it developed and selling spare parts to after-sales service centers.。With the launch of HSI 5 in 2022, the company's revenue has become more viable and sustainable.。At present, Hengchi 5 has delivered more than 1,000 vehicles in total.。Evergrande's next goals will include launching and producing Hengchi 6 and Hengchi 7 based on actual conditions。

In 2022, the Company's automotive business generated approximately 1.3.4 billion yuan, and sales and marketing expenses for the automotive business were 1.9.6 billion yuan, the administrative expenses of the new energy vehicle business (mainly including research and development expenses) were 26..1.7 billion yuan。

Second, in terms of assets, by the end of 2022, the company's total assets were 303.9.5 billion yuan, of which non-current assets were 223.9.7 billion yuan (of which property, plant and equipment were 145.3.7 billion yuan), current assets of 7.9.9.8 billion yuan。

Hengchi 5 had stopped production in April this year due to funding problems and resumed production in May.。According to Evergrande Auto, at present, the capacity utilization rate of the Tianjin plant is affected by the shortage of funds, and there are cases where employees' salaries cannot be paid in a timely manner.。The company said it is planning to raise about $500 million (about 35.800 million yuan) for the production and marketing of Hengchi 5 and the company's normal operation of the capital needs.。To this end, the company has been discussing financing with potential investors, but has not yet entered into any final agreement.。

Prior to this, Evergrande Automobile has conducted a number of external financing。Since September 2020, the Company has conducted four rounds of equity fundraising activities, raising a total of approximately HK $33 billion.。

It is worth noting that Evergrande also specifically clarified the need for 29 billion yuan of financing as stated in the March 22 announcement this year.。This value has been widely discussed by the outside world.。Evergrande said that the amount of 29 billion yuan mentioned at the time of the announcement was the estimated amount required to launch multiple flagship models and achieve production at multiple plants, and that the amount required for the Hengchi 5 plant in Tianjin was only part of the above amount.。

In summary, for condition (b), Evergrande Automotive believes that the Group has a viable and sustainable business and has assets of considerable value to support its operations to comply with Rule 13 of the Listing Rules..Provisions under Article 24。

● For condition (c), Evergrande Auto stated that since the suspension of trading, the Company has continuously and promptly issued announcements to provide important information to the Company's shareholders and other investors, and therefore also meets condition (c)。

When trading was suspended on April 1, 2022, Evergrande's share price was 3.2 Hong Kong dollars。After the resumption of trading in Evergrande today, the first plunge of nearly 70%, after the decline quickly narrowed to 48%。As of press time, Evergrande Auto's decline widened to 61.25%, reported 1.HK $24。

Evergrande Auto Cheng Hengda is the first company to resume trading.

In any case, Evergrande Automobile, as the first company in the Evergrande family to resume listing transactions, is of great significance to the entire Evergrande Group.。

One is to boost market confidence。Like Evergrande, the other two listed companies in the Evergrande system, China Evergrande and Evergrande Properties, have been suspended for 16 months.。Under the Listing Rules, HKEx has the right to delist any securities that have been suspended for 18 consecutive months.。Evergrande faces delisting with only two months left。And Evergrande's resumption of trading indicates that Evergrande Group is taking action, which helps reduce the market's pessimism about the delisting of the remaining two companies。

Second, Evergrande Auto resumed trading to avoid being "delisted" by the Hong Kong Stock Exchange, which has an important impact on China Evergrande's foreign debt restructuring.。One option mentioned in the restructuring of China Evergrande's foreign debt is that creditors may choose to convert their bond holdings into a combination of five equity-linked notes linked to Evergrande Property, Evergrande Auto or China Evergrande's listed stocks, in a manner that includes their guaranteed, linked, compulsorily exchangeable or compulsorily convertible counterparts.。

As you can see from the above terms, the equity-linked notes involve not only Evergrande Auto, but also China Evergrande and Evergrande Properties, so the resumption of trading between these two is also important.。

In addition, it is worth noting that China Evergrande and Evergrande Properties had already disclosed their performance reports before Evergrande Motor disclosed their performance reports, but why was Evergrande Motor the first to resume trading?？This may be related to the enforcement of China Evergrande's pledge guarantee of 13.4 billion yuan for Evergrande Property by the relevant banks.。

According to the HKEx's guidelines, in addition to publishing its financial results, China Evergrande is required to conduct an independent investigation into the enforcement of Evergrande's $13.4 billion pledge guarantee by the relevant banks, publish the results of the investigation and take appropriate remedial measures.。

On February 15 this year, Evergrande Property announced the results of an independent investigation and remedial measures.。Evergrande Property said that according to the relevant laws and regulations, for the 13.4 billion yuan of deposit slips that have been deducted / transferred, they can recover from the guarantor in accordance with the relevant laws and regulations and the agreement of the pledge guarantee contract, or from the actual inflow or user of the funds in accordance with the credit and debt relationship.。At the same time, the company said that it was discussing with China Evergrande a plan to repay the amount involved in the pledge, which was mainly offset by the transfer of assets by Evergrande Group to the Group.。

Evergrande Property will issue a further announcement after the implementation of the relevant repayment plan.。China Evergrande and Evergrande Properties may need to announce the implementation of the final plan before they can resume trading.。

So it is foreseeable that, in order not to let the foreign debt restructuring program "make waves again," but also to avoid being "delisted," the remaining two Evergrande departments will then go all out to fight for the delisting deadline to resume trading, let us wait and see.。