HONG KONG (REUTERS) – China Evergrande Group, the country’s most indebted property developer, said late on Wednesday (Aug 25) it expected its six-month net profit to slump as much as 39 per cent from a year earlier, dragged by a drop in selling prices and higher expenses.
The expected drop, to between nine billion yuan (S$1.88 billion) and 10.5 billion yuan in the six months ended June, is also partly due to losses of four billion yuan and 4.8 billion yuan in the company’s property and electric car businesses, respectively, Evergrande said in a filing.
Evergrande shares fell as much as 5 per cent in early trade after markets opened on Thursday, while Evergrande New Energy Vehicle stocks fell more than 12 per cent to the lowest since March 31 last year. Shares of the car business have shed 80 per cent this year.
The developer, however, said an 18.5 billion yuan gain from the sale of some shares and marked-to-market holding in Internet unit Hengten Networks had helped offset some losses.
Hengten shares fell more than 6 per cent, while the broader marker eased 0.4 per cent.
Evergrande has been scrambling to raise funds it needs to pay its many lenders and suppliers, while regulators and financial markets are worried that any crisis at Evergrande could ripple through China’s banking system.
The company is due to report its interim results on Tuesday.