China Evergrande says contracted sales dropped 38.7% in 2021

BEIJING — Indebted property developer China Evergrande’s contracted sales plunged last year as the real estate giant struggled to repay creditors.

A filing Tuesday showed the company’s contracted sales of properties totaled 443.02 billion yuan ($69.22 billion) last year, down 38.7% from the 723.25 billion yuan in contracted sales reported for 2020.

Evergrande shares are set to resume trading in Hong Kong at 1 p.m. on Tuesday. Trading was halted as of 9 a.m. Monday.

The company added it “will continue to actively maintain communication with creditors, strive to resolve risks and safeguard the legitimate rights and interests of all parties.”

Evergrande shares have plunged more than 88% over the last 250 trading days. The company missed payments to creditors in December, Fitch Ratings said, sending the developer into default.

Evergrande is the largest Chinese real estate developer by issuance of offshore, U.S. dollar-denominated debt, which stood at $19 billion last year. The developer had a total of $300 billion in liabilities as of last year.

The company was China’s second largest developer by sales in 2020.

Like other Chinese real estate developers, Evergrande’s business model relies heavily on sales of apartments to customers before the units are completed. S&P Global Ratings said in November that an Evergrande default “is highly likely” since the company is no longer able to sell new homes.

Evergrande added that a demolition order for its Ocean Flower Island project only applied to 39 buildings, according to Tuesday’s filing with the Hong Kong stock exchange.

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