What happened to Evergrande Real Estate?

When Evergrande Group was mired in debt, great personnel changes took place in the company.

On August 17, the national enterprise credit information publicity system showed that Evergrande Real Estate Group completed the relevant industrial and commercial registration change procedures on the same day, the chairman of Evergrande Real Estate Group was changed from Xu Jiayin to Zhao Changlong, and the general manager and legal person were changed from Ke Peng to Zhao Changlong.

According to the data, he is well-known within Evergrande Group, and this person is also one of the core members when Boss Xu founded Evergrande. Perhaps the name Zhao Changlong is unfamiliar to the industry, but in fact he has been Xu Jiayin's old partner for many years.

Xu Jiayin 1996 established Evergrande, and Zhao Changlong 1998 joined Evergrande Real Estate Group. During the period of 1998-2007 10, Zhao Changlong successively served as the general manager and assistant to the president of the development center, mainly responsible for development management.

In 2007, Evergrande wanted to expand its territory to the whole country, and Zhao Changlong was also entrusted with the important task of expanding its territory in various places. He served as the chairman of Evergrande Real Estate Xi Branch, Shaanxi Branch and Jiangxi Branch. In September 2020, Zhao Changlong was appointed as the executive director and chairman of Evergrande Real Estate, mainly responsible for the overall management and strategic planning of the real estate.

From the perspective of Evergrande, it is not a big deal for Xu Jiayin to step down as the chairman of Evergrande Real Estate. However, the change of Evergrande's chairman and legal representative still has a great impact on the stock price. As of the close, among Evergrande stocks, China Evergrande fell by as much as 4%, Evergrande Real Estate by 8.7% and Evergrande Automobile by more than 5%. At the same time, bonds related to Evergrande are also plummeting. So, what is Xu Jiayin's intention behind stepping down as chairman of Evergrande Real Estate in this way? I think he thinks from the following three aspects.

First, Xu Jiayin stepped down as the chairman of Evergrande Real Estate and let Zhao Changlong manage this stall, which can realize the practice of "special management", because Xu Jiayin should concentrate on managing the affairs of the whole group company. If Evergrande Real Estate is managed by Zhao Changlong alone, Xu Jiayin can spare more time and concentrate on solving the debt problem.

At present, even if Evergrande wants to sell some assets, the scale is too large for ordinary enterprises to take down. Only when there are more powerful enterprises can Evergrande's projects be taken down. Now, Xu Jiayin's resignation has just dealt with the debt problem of Evergrande Group in recent years.

Second, at present, the debt scale of Evergrande Real Estate remains high, financing is blocked and sales are not satisfactory. In case of partial debt default, the core executives of Xu Jiayin and Evergrande Group may be included in the list of untrustworthy people, which will restrict high consumption and travel, and will also trigger some chain negative effects. Now let Zhao Changlong take over the plate of Evergrande Real Estate, so that Xu Jiayin and his core executives will no longer be affected. Be prepared to "give your life to protect your handsome" at an appropriate time.

Third, Xu Jiayin is usually tough and lacks room for manoeuvre in dealing with problems. At present, Evergrande Real Estate is heavily in debt and needs to introduce strategic investors or sell some high-quality assets to get rid of the crisis. If Xu Jiayin is allowed to negotiate, it may be difficult to talk about the effect, but it may be better if Zhao Changlong is allowed to talk about investing and selling assets. Therefore, the personnel changes of Evergrande are the result of various considerations.

It is not surprising that the chairman of Evergrande Real Estate has changed. Zhao Changlong was at the helm of Evergrande Real Estate before, but Evergrande Real Estate will be listed, and Xu Jiayin will personally operate it. I hope this can integrate the resources of the Group and go public as soon as possible. However, now the listing of Evergrande Real Estate has failed, and the debt remains high, which can only be handled by the former chairman Zhao Changlong. In short, Zhao Can Changlong led Evergrande Real Estate out of the debt crisis? Let's wait and see.