Why did Evergrande suddenly get into trouble?

Evergrande suddenly got into trouble for five reasons.

1. Although Evergrande started to "slam on the brakes" on 20 17, the historical burden is too heavy.

In 20 17, although the state has started to regulate the real estate industry, most people were optimistic about the real estate industry at that time, and the house prices in most cities were still rising. Therefore, in 20 17, most housing enterprises were expanding by borrowing on a large scale, and Evergrande suddenly started to "slam the brakes", carry out strategic transformation, reduce liabilities, leverage and costs, and start the "three lows and one high" model.

20 17, Evergrande's pressure stems from historical burdens, because before 20 17, Evergrande acquired a large number of projects and assets for large-scale expansion. In order to reduce debt and digest the previously acquired projects, Evergrande started "sudden braking" on 20 17.

However, the high assets and liabilities thus obtained are not so easy to digest. With the deterioration of the property market environment in the next few years, the impact of large-scale acquisition has laid a great hidden danger for Evergrande's future development.

2, underestimated the country's determination to regulate the property market, the strategic direction is wrong.

20 16, 16 February, the state first put forward the concept of "no speculation in housing", making it clear that "houses are for living, not for speculation". The country has shown its determination to regulate the property market, but housing enterprises still do not pay attention to this problem, and still rely on borrowing money to expand on a large scale, completely ignoring "no speculation in houses".

By the end of 20 19, the central bank began to strictly investigate the illegal funds flowing into the property market, and the real estate industry felt the shortage of funds for the first time. Subsequently, at the end of 2020, the China Banking Regulatory Commission issued the Regulations on Centralized Management of Real Estate Loans of Commercial Banks, and the real estate industry began to deleverage.

By 202 1, under the influence of the "three red lines" and the "loan restriction order", not only the financing of housing enterprises became more and more difficult, but also the mortgage of buyers began to be restricted, which was a fatal blow to housing enterprises with high debt and high turnover.

3. Under the influence of regulatory policies and "no real estate speculation", the purchasing power in the market is decreasing.

With the state's increasing regulation of the real estate industry and the "no real estate speculation" gradually taking root in people's hearts, the trend of housing prices of ordinary people in our country has also changed. At present, not only do buyers just need to buy a house to start living as the main purpose, but investors are gradually no longer optimistic about the trend of housing prices.

At present, China's housing prices are at a high level, and most people who can afford housing have housing. And this kind of people not only don't invest in houses, but also start to sell properties, which leads to the continuous surge in the listing of second-hand houses in various places, and the listing price of second-hand houses is also decreasing, which has a great impact on the new housing market.

On the other hand, many people who just need to buy a house have seen that house prices are falling, and the idea of "buying up and not buying down" has made many people who are ready to buy a house hesitate. At present, the market purchasing power is getting lower and lower, which seriously affects the speed of withdrawing funds from housing enterprises, and the high turnover management model of housing enterprises has been unable to move.

4. Evergrande has too many operations, and other operations are basically losses, resulting in a financial black hole.

Many people say that the current situation of Evergrande has a lot to do with its operation. Evergrande is also undergoing transformation, but the transformation of Evergrande is all about deep pockets, that is, just entering an industry with deep pockets, it will invest on a large scale, and it needs to form a scale in a short time, and then occupy the market on a large scale. For example, Evergrande Football, Evergrande Ice Spring, Evergrande Automobile and Hengteng Network.

Evergrande invested heavily in these transformation projects, and soon packaged these companies and listed them for financing, but these companies suffered losses every year without exception. With the current problems of Evergrande, the share prices of Evergrande listed companies such as Evergrande Real Estate, Evergrande Automobile, Evergrande Real Estate and Hengteng Network have been falling all the way, and these companies have gradually lost their financing ability and become one burden after another.

5. Evergrande has too many financial means and the financing cost is too high.

Compared with other real estate enterprises, Evergrande likes dividends very much, because major shareholders hold a large proportion of shares. After the dividend, the operating results of the enterprise did not stay in the enterprise. However, Evergrande also raised funds from ordinary people and all employees through large-scale debt expansion and various financing channels.

At the same time, Evergrande has also introduced strategic investment to many enterprises. However, in 2020, with the help of the government, Evergrande converted 654.38+02.57 billion of the 654.38+03 billion strategic investors into common stock, and now the market value of Evergrande Real Estate is less than 30 billion. When this happens, Evergrande's financing channels are basically cut off. Profits are constantly being carved up and liabilities are increasing, which is unbearable for any enterprise.