Evergrande Group
| Company type | Public company |
|---|---|
| Industry | Real estate, automotive, health, entertainment, finance, food and agriculture, sports, tourism and recreation |
| Founded | 1996 |
| Founder | Hui Ka Yan (Xu Jiayin) |
| Defunct | 2024 |
| Fate | Filed for bankruptcy protection in the United States (2023), court-ordered liquidation in Hong Kong (2024) |
| Headquarters | Shenzhen (later moved back to Guangzhou) , China |
Area served | Mainland China |
Key people | Hui Ka Yan (Chairman) |
| Products | Residential units, electric vehicles (Evergrande New Energy Vehicle), health services, entertainment content, insurance, mineral water, sports clubs, theme parks |
| Owner | Hui Ka Yan (founder) |
| Parent | None |
The China Evergrande Group was one of the leading property developers in China, ranking second nationwide by sales volume. Established in 1996 by Hui Ka Yan (also known as Xu Jiayin), the company primarily focused on selling residential units to middle- and upper-income customers. Evergrande was registered in the Cayman Islands and maintained its main office in Shenzhen, Guangdong Province.
By 2018, Evergrande had risen to become the most valuable real estate firm worldwide; however, by 2021 it encountered a critical financial crisis that sparked turmoil across China's property market. The company filed for bankruptcy protection in the United States in 2023, followed by a court-mandated liquidation process in Hong Kong in January 2024.
History
Originally named the Hongda Group, Evergrande was founded by Hui Ka Yan in Guangzhou during China’s period of rapid urban expansion in 1996. In October 2009, the firm successfully raised $722 million through an initial public offering on the Stock Exchange of Hong Kong (SEHK).
In 2021, Evergrande’s inability to meet its debt obligations triggered the ongoing Chinese property sector crisis (2020–present), with total liabilities estimated to reach hundreds of billions of dollars. This situation led to a sharp decline in stock market indices during September of that year. By year-end, reports indicated that Chinese authorities were involved in efforts to restructure Evergrande to mitigate the fallout. In January 2022, the company requested a moratorium on early repayment of a bond denominated in yuan.
In 2022, Evergrande announced plans to move its headquarters back to Guangzhou as part of cost-cutting measures. Reuters noted in April that construction activities had resumed on most projects, although outstanding liabilities remained near US$300 billion.
On 17 July 2023, Evergrande revealed net losses totaling 476 billion yuan (approximately US$66.3 billion) for 2021 and 105.9 billion yuan (around US$14.7 billion) for 2022. Its total debt was reported at roughly 2.43 trillion yuan (about US$340 billion). Court hearings concerning debt restructuring were scheduled for July 2023 in both Hong Kong and Caribbean jurisdictions. Subsequently, on 17 August 2023, Evergrande sought Chapter 15 bankruptcy protection in Manhattan to shield itself from creditor claims. When trading resumed on the Hong Kong exchange on 28 August, shares plummeted as much as 87%, closing at just HK$0.35 compared to HK$1.65 prior to suspension.
In September 2023, billionaire chairman Hui Ka Yan was placed under police supervision, while former executives Xia Haijun and Pan Darong were detained by Chinese authorities.
On 29 January 2024, a Hong Kong court ordered the liquidation of Evergrande after bondholders rejected a restructuring proposal that involved transferring control to Chinese banks and imposing losses on foreign creditors. Liquidators from Alvarez and Marsal were appointed to oversee Evergrande’s global subsidiaries and manage asset sales aimed at repaying debts; however, most assets were located within mainland China and had already been sold, pledged as collateral, or frozen.
On 19 March 2024, the China Securities Regulatory Commission (CSRC) determined that Evergrande had inflated its revenue figures by nearly half in 2019 (214 billion yuan) and by close to 80% in 2020 (350 billion yuan). The CSRC also uncovered suspected irregularities related to bonds issued by the company and imposed a fine of 4.2 billion yuan (approximately $579.5 million) for revenue falsification and other financial violations.
Automotive
In 2018, Evergrande, through its subsidiary Evergrande Health, purchased a 45% ownership stake in the electric vehicle manufacturer Faraday Future for $2 billion.
By July 2019, Evergrande had formed a collaboration with the State Grid Corporation of China to establish a network of electric vehicle charging stations. Later that year, the company revealed plans to invest ¥45 billion (around $6.4 billion USD) over a three-year period aimed at advancing new energy vehicle development, constructing three manufacturing facilities in Nansha, Guangzhou, and Shanghai, and launching electric vehicles under the "Evergrande New Energy Vehicle" brand starting in 2020, which led to the creation of the Hengchi brand.
In June 2020, Evergrande completed its acquisition of the remaining 49% stake in NEVS for $380 million, following an initial purchase of 51% for $931 million in 2019. The company planned for Evergrande NEV to commence electric car production by 2022.
On 14 August 2023, Evergrande Group obtained a strategic investment worth $500 million from NWTN Group.
By June 2024, the Chinese government mandated Evergrande NEV to return subsidies totaling 1.9 billion yuan due to non-fulfillment of contractual commitments.
Health
Evergrande acquired New Media Group Holdings in March 2015 and subsequently rebranded it as Evergrande Health. This division managed the "Evergrande Health Valley" located in Nanning, a facility combining health services and retirement living. Additionally, Evergrande partnered with Brigham and Women's Hospital from Massachusetts to oversee operations at Boao Evergrande International Hospital in Hainan.
Operating both as a division and a publicly listed company, the latter was renamed China Evergrande New Energy Vehicle Group Limited in August 2020.
As of 2021, the health sector remained integrated within China Evergrande New Energy Vehicle Group Limited, itself under the umbrella of Evergrande Group.
Entertainment
Founded in 2015 through collaboration with Tencent, HengTen Networks announced its acquisition of Ruyi Pictures for HK$7.2 billion in October 2020. In August 2021, HengTen sold a 7% shareholding to Tencent for US$418 million. Later that year, Evergrande exited its remaining holdings in HengTen, thereby concluding its partnership with Tencent.
Finance
In November 2015, Evergrande secured a 50% interest in Sino-Singapore Great Eastern Life Insurance for $617 million and rebranded it as Evergrande Life. The firm also maintains equity stakes in Shengjing Bank and has marketed wealth management products directly to consumers.
Food and agriculture
Evergrande Group initiated its "Hengda Bingquan" mineral water brand (later renamed "Evergrande Spring") in 2014 by investing ¥5.54 billion and engaging Jackie Chan as its brand ambassador. The product encountered controversy in South Korea due to labeling the water source as "Jang bai shan" (Changbai Mountains) instead of the Korean designation "Mount Baekdusan," touching on sensitive geopolitical matters.
Following a ¥4 billion loss in September 2016, Evergrande divested its agribusiness operations—including mineral water, dairy products, and grain and oil sectors—for ¥2.7 billion to concentrate on its core real estate business. Later that year, it allocated ¥300 million toward establishing more than 110 pig farms across southwestern Guizhou province.
Real estate
Evergrande Group possessed 565 million square meters of development land and real estate projects distributed across 22 mainland Chinese cities, including Guangzhou, Tianjin, Shenyang, Wuhan, Kunming, Chengdu, Chongqing, Nanjing, Zhengzhou, Luoyang, Changsha, Nanning, Xi'an, Taiyuan, and Guiyang. Among its prominent developments is Ocean Flower Island located in Hainan.
Ranking as the second-largest property developer in mainland China, Evergrande Real Estate is recognized alongside Vanke and Country Garden as one of the country's top three real estate firms. The company has established projects in more than 170 cities throughout the nation.
A prime example of Evergrande’s commercial property portfolio is Evergrande Plaza in Chengdu, which was completed in 2014 and designed by the architectural firm Aedas.
Sports
In 2010, Evergrande took ownership of Guangzhou Evergrande F.C., making significant investments to secure elite players. Under the leadership of coach Marcello Lippi, the team secured victory in the 2013 AFC Champions League. Alibaba owns a 50% share of the football club.
Construction of the Guangzhou Evergrande Football Stadium commenced on 16 April 2020 in the Panyu District of Guangzhou.
Additionally, Evergrande manages the Evergrande Football School, a dedicated academy for football training.
For eight years, Evergrande sponsored the Women's Guangdong Evergrande Volleyball Club before ending the sponsorship agreement in October 2021 due to financial constraints.
Tourism and recreation
Evergrande operates two significant theme park brands: "Hengda Children of the World" and "Hengda Water World." It also manages a large-scale tourist complex in Hainan known as "Chinese Island of Hainan to Spend." One of its major ongoing projects is the Ocean Flower Island resort located in Hainan.
Financial data per annual reports
| Year | Revenue | Net income | Assets | Equity |
|---|---|---|---|---|
| 2010 | 45,801,401,000 | 8,024,676,000 | 104,452,464,000 | 21,366,225,000 |
| 2011 | 61,918,185,000 | 11,726,593,000 | 179,023,408,000 | 34,130,753,000 |
| 2012 | 65,260,838,000 | 9,181,921,000 | 238,990,551,000 | 41,691,325,000 |
| 2013 | 93,671,780,000 | 12,611,778,000 | 159,950,689,000 | 79,342,634,000 |
| 2014 | 111,398,112,000 | 12,604,053,000 | 206,225,229,000 | 112,378,004,000 |
| 2015 | 133,130,000,000 | 10,460,000,000 | 757,035,000 , 000 | 142 , 142 , 0 00 |
| 2016 | 211 ,444 ,0 00 | 5 ,091 ,0 00 | 1 ,350 ,868 ,0 00 | 192 ,532 ,0 00 |
| 2017 | 311 ,022 ,0 00 | 24 ,372 ,0 00 | 1 ,761 ,752 ,0 00 | 242 ,208 ,0 00 |
| 2018 | 466 ,196 ,0 00 | 37 ,390 ,0 00 | 1 ,880 ,028 ,0 00 | 308 ,626 ,0 00 |
| 2019 | 477 ,561 ,0 00 | 17 ,280 ,0 00 | 2 ,206 ,577 ,0 00 | 358 ,537 ,0 00 |
| 2020 | 507 ,248 ,0 00 | 8 ,076 ,0 00 | 2 ,301 ,159 ,0 00 | 350 ,431 ,0 00 |
| 2021 | 250 ,013 ,0 00 | -476 ,035 ,0 00 | 2 ,107 ,096 ,0 00 | -473 ,054 ,0 00 |
| 2022 | 230 ,067 ,0 00 | -105 ,914 ,0 00 | 1 ,838 ,338 ,0 00 | -599 ,074 ,0 00 |
Financial difficulties and audit controversies
In 2016, the Hong Kong Market Misconduct Tribunal imposed a five-year suspension on Andrew Left, founder of Citron Research, following his critical report on Evergrande. The tribunal cited violations under the Securities and Futures Ordinance for disseminating false or misleading information. This ban sparked debate about the implications for freedom of expression within Hong Kong's financial sector.
After a deleveraging initiative by the Chinese government in 2016, Evergrande found its access to high-yield bond markets increasingly restricted. To address cash flow challenges, the company turned to supply-side financing methods, including requesting advance payments from clients and borrowing from suppliers. This liquidity crunch also led to efforts encouraging staff to purchase the company’s financial products.
In 2020, under the leadership of CCP General Secretary Xi Jinping, China introduced the "three red lines" policy aimed at limiting excessive borrowing by real estate developers. Evergrande violated all three criteria: maintaining a liability-to-asset ratio below 70%, keeping net gearing under 100%, and ensuring a cash-to-short-term debt ratio above one. These breaches precipitated a severe liquidity crisis, with debt obligations estimated in the hundreds of billions of dollars, culminating in the 2021 Evergrande cash flow emergency and a sharp decline in property sales.
On 15 October 2021, Hong Kong’s accounting regulator initiated an inquiry into PricewaterhouseCoopers’ (PwC) audit of Evergrande’s 2020 financial statements amid doubts about the auditor’s evaluation of the company’s fiscal stability. Throughout October and November 2021, Evergrande failed to meet several bond interest payments and defaulted on multiple bonds; however, some payments were later made following grace periods.
Despite its enormous liabilities, as of November 2021 Evergrande still possessed significant assets valued at approximately RMB 2 trillion, including land holdings and commercial real estate. Nevertheless, on 17 December 2021, S&P Global officially declared Evergrande in default due to missed bond payments. The company’s stock was suspended in January 2022 but briefly resumed trading with a short-lived price increase before plummeting to record lows by March 2022.
In March 2022, Evergrande divested its Crystal City Project located in Hangzhou for 3.66 billion yuan to alleviate construction-related debts. Subsequently, in January 2023, PwC resigned as auditor following disputes concerning the audit of the 2021 financial year.
By July 2023, Evergrande reported losses amounting to 476 billion yuan for 2021 and an additional 106 billion yuan for 2022. On 17 August 2023, the company sought Chapter 15 bankruptcy protection in New York. Trading was suspended once more in September 2023 after reports emerged that Chairman Hui was under police investigation for alleged criminal activities.
In February 2024, liquidators managing Evergrande’s affairs prepared legal action against PwC over disagreements related to auditing practices. Later that year, in September 2024, Chinese regulators barred PwC from conducting business within China for six months and imposed a fine of CNY 441 million (approximately US$62 million) connected to its audit work on Evergrande.