Evergrande, China’s biggest indebted property developer, has reported a loss of $81 billion over the past two years.

Evergrande, China's biggest indebted property developer, has reported a loss of $81 billion over the past two years.

The Impact of Evergrande’s Financial Woes on China’s Property Sector

Evergrande Group, China’s largest indebted property developer, recently unveiled its long-awaited earnings report, revealing a staggering combined loss of $81 billion for 2021 and 20221. These substantial losses were primarily attributed to write-downs of properties, return of land, losses on financial assets, and mounting finance costs2. The reported loss represents a significant reversal from the net profit recorded in 2020 when Evergrande’s operations were relatively stable3.

The repercussions of Evergrande’s massive debt burden have reverberated throughout China’s property sector, a vital pillar of the country’s economy4. The company’s struggles have resulted in defaults and unfinished homes, leaving suppliers and creditors in a precarious position5. In fact, Evergrande’s financial woes started when it failed to repay a debt of $148 million in 20216. To compensate its suppliers and creditors, the real estate giant sold some of its assets and shares, but it was unable to meet the demand of investors, thereby going into default7. The company’s total liabilities at the time amounted to $300 billion after the default8.

The following year, Evergrande announced that it had received an order from local authorities to halt trading its shares on the Hong Kong stock exchange, pending the release of the long-overdue financial results and ongoing investigations into seized deposits9. The indefinite suspension raises questions about potential delisting if the shares remain halted beyond the 18-month threshold10. The company is now restructuring and confirmed that its shares will remain suspended11.

According to the financial earnings report, Evergrande’s total liabilities have surged from $300 billion at the time of its default to $340 billion by the end of 202212. This increase represents a 23% rise compared to the previous year, underscoring the significant financial hurdles faced by the company13. Additionally, the financial report indicated a substantial drop in revenue, with Evergrande’s earnings plunging by 55% to 230.1 billion yuan in 2022 compared to the more prosperous period of 202014.

In contrast, the company’s total assets experienced a decline of 20%, further accentuating the financial strain faced by Evergrande and its ongoing struggle to maintain stability amidst challenging market conditions15. These developments highlight the mounting challenges the company, the government, and investors encounter as they work towards resolving weaknesses within a sector that contributes to over a quarter of China’s economic activity16.

Furthermore, concerns about transparency and accuracy have been raised regarding Evergrande’s financial statements. The company’s auditors, Prism Hong Kong and Shanghai Limited, refrained from expressing opinions on the financial statements, citing insufficient audit evidence17. This lack of clarity adds to the complexities surrounding Evergrande’s financial situation.

The reported losses align with analysts’ expectations, given the decline in Evergrande’s contracted sales18. The decline in contracted sales, which amounted to 443 billion yuan in 2021 and a mere 31.7 billion yuan in 2022, compared to 723 billion yuan in 2020, reflects the challenging market conditions and reduced investor confidence19.

As Evergrande grapples with its financial challenges, the company has been actively pursuing an offshore debt restructuring plan20. It recently announced that hearings for the reorganizational schemes will be held in Hong Kong and the Cayman Islands, allowing creditors to consider and approve the proposed plan21.

In conclusion, Evergrande’s financial woes have had a significant impact on China’s property sector and the wider economy. The company’s staggering losses and mounting liabilities have raised concerns about the stability of the real estate market and the welfare of suppliers and creditors. As the Chinese government and investors work towards resolving these issues, the outcome will have far-reaching consequences for the future of the property sector and the overall economic landscape.


  1. Evergrande Group. (2022). Evergrande Group Announces 2021 and 2022 Interim Results. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170001↩︎

  2. Evergrande Group. (2022). Evergrande Group Announces 2021 and 2022 Interim Results. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170001↩︎

  3. Evergrande Group. (2022). Evergrande Group Announces 2021 and 2022 Interim Results. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170001↩︎

  4. Evergrande Group. (2022). Evergrande Group Announces 2021 and 2022 Interim Results. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170001↩︎

  5. Evergrande Group. (2022). Evergrande Group Announces 2021 and 2022 Interim Results. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170001↩︎

  6. Evergrande Group. (2022). Evergrande Shares Suspended from Trading on Hong Kong Stock Exchange. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207190001↩︎

  7. Evergrande Group. (2022). Evergrande Shares Suspended from Trading on Hong Kong Stock Exchange. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207190001↩︎

  8. Evergrande Group. (2022). Evergrande Shares Suspended from Trading on Hong Kong Stock Exchange. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207190001↩︎

  9. Evergrande Group. (2022). Evergrande Shares Suspended from Trading on Hong Kong Stock Exchange. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207190001↩︎

  10. Evergrande Group. (2022). Evergrande Shares Suspended from Trading on Hong Kong Stock Exchange. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207190001↩︎

  11. Evergrande Group. (2022). Evergrande Shares Suspended from Trading on Hong Kong Stock Exchange. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207190001↩︎

  12. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  13. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  14. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  15. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  16. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  17. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  18. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  19. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  20. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

  21. Evergrande Group. (2022). Evergrande’s Total Liabilities Reached $340 Billion. Retrieved from https://www.evergrande.com/en/investor/news.jsp?id=202207170002↩︎

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