What happened to Evergrande?

There was Wanda before, and then Evergrande. What happened to Evergrande at present is a concern of many people. The reason why people pay so much attention to the trend of Evergrande is not because of the excitement, but because Evergrande is a "big family" and many products are bought by everyone.

So what happened to Evergrande? According to media reports, two projects of Evergrande Real Estate Group in Kunming have been suspended. In fact, before this, Evergrande has been exposed to the phenomenon of work stoppage in many places, such as the forced work stoppage of Shenzhen Evergrande Metropolitan Plaza, the work stoppage of Lu 'an Evergrande Hu Yujing Manor, and the work stoppage of Taicang Evergrande Cultural Tourism City. So in general, Evergrande did encounter some troubles.

So what happened to Evergrande? In fact, the main reason why Evergrande is facing the current predicament is that the debt ratio of Evergrande Group is too high. Excessive debt ratio makes Evergrande unable to operate normally. In 2020, the relevant departments planned three red lines for housing, namely, "the asset-liability ratio of housing enterprises after deducting advance payment shall not exceed 70%; The net debt ratio of housing enterprises shall not be greater than100%; The "short cash debt rate" of housing enterprises is less than 1. "

For these three red lines, Evergrande is serious about stepping on them. In desperation, Evergrande can only pay its debts by "selling" some products and houses. This approach really took effect in a short time, which made Evergrande's debt ratio fall below 100% for a period of time. However, this is by no means a long-term solution. The practice of "exchanging price for quantity" has caused problems in Evergrande's capital chain, and many projects under construction have to be stopped.

With the break of Evergrande's capital chain and the suspension of several projects, Evergrande's stock also fell again and again, completely falling to "invisible", and investors lost confidence in it. At the same time, there are rumors that Evergrande has started to sell its "Evergrande Auto" and "Evergrande Real Estate", which made people panic for a while and the market completely lost patience with Evergrande.

After the accident of Evergrande, many people are worried that Evergrande will not go bankrupt. In my opinion, this high probability is impossible, because the bankruptcy of Evergrande concerns the interests of many ordinary people. Even if it wants to go bankrupt and liquidate itself, the state will not allow it. So those friends who buy a house in Evergrande don't have to worry too much. The house should be ok, it's only a matter of time.

For Evergrande, it is still necessary to reduce the debt ratio and strive to meet the "three red lines" of regulatory requirements. Evergrande should also actively carry out transformation, just like Wanda, and cannot rely too much on real estate. At the same time, Evergrande can selectively sell some assets and focus on its own areas of expertise.

Today, Evergrande has been "saving itself", and the author also hopes that Evergrande can make a perfect transformation and strive to break through itself while ensuring the relevant interests of the people.