© Reuters.
Investing.com – Chinese real estate giant, Evergrande Group (), posted a combined loss of $81 billion in its long-awaited earnings report released late Monday.
The world’s most indebted real estate developer defaulted in 2021 and announced an external debt restructuring program in March, after it struggled to finish projects and repay debts to suppliers and lenders.
The company said that the net losses of Evergrande for the years 2021 and 2022 amounted to 476 billion (66.36 billion dollars) and 105.9 billion yuan (14.76 billion dollars), respectively, as a result of writing off real estate, returning lands, losses in financial assets and financing costs.
In its last normal year of operation, 2020, Evergreen had recorded a net profit of 8.1 billion yuan.
Evergrande’s massive debt in recent years has become a serious concern about China’s real estate sector, a cornerstone of the Chinese economy, with defaults and abandoned real estate projects across the country. The proposed restructuring of the company is scheduled to be heard by the Supreme Court on July 24.
JPMorgan (NYSE:): $100 billion unpaid
JPMorgan estimates that about 50 real estate developers have defaulted on $100 billion in offshore bonds over the past two years, while dozens have been suspended from trading on the Hong Kong Stock Exchange.
There will be consolidation in the Chinese real estate market, which is becoming an “increasingly fragmented sector,” Sandra Zhao, associate head of Asia Pacific research at Credit Sites, told CNBC’s “Squawkbox Asia” on Tuesday.
Creditsights tracks the monthly contracted sales figures of more than 30 developers.
Only those are succeeding now
Zhao said only eight reported increases in their sales figures.
“No wonder all of these are state-linked developers or the stronger developers, so we are seeing this growing bifurcation where the strong developers are state-linked, and the big and small players are kind of left behind, and the sector is going to be increasingly consolidated,” Zhao said.
“It is understood that when you buy a house, you will not buy a house from a poor developer also because there is a risk that the developer will not be able to complete your house on time, and then that responsibility will pass to you, so it is very difficult to see how small developers will regain the confidence of a buyer.” Homes and then they get the money to change their business.”
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2023-07-18 15:01:00
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