HONG KONG, China Evergrande Group was officially delisted from the Hong Kong stock exchange on Monday, closing one of the most dramatic rises and collapses in China’s property market history.
The world’s most indebted developer, burdened with over US$300 billion (RM1.26 trillion) in liabilities, had its shares suspended since Jan 29 after a court ordered the company to be liquidated when it failed to repay debts and restructure. This suspension paved the way for its removal from the exchange.
Once a giant in China’s property boom, Evergrande’s 2009 Hong Kong listing was the largest for a Chinese private developer. Its market value soared from US$9 billion at debut to a peak of US$51 billion in 2017. However, by early 2024, it had plunged to just US$282 million. Shares that once traded at HK$31.39 fell to HK$0.163 before trading stopped.
“The delisting marks a milestone, symbolising the end of Evergrande’s dramatic rise and fall, as well as the fading of China’s debt-fuelled property growth model,” said Alec Tseung of KT Capital Group.
The downfall mirrors the fate of its founder, Hui Ka Yan, who rose from a poor rural background to become one of China’s richest men. Hui was later banned from the securities market for life, fined 47 million yuan, and accused of inflating financial results and fraud. He has since been detained by authorities while liquidators pursue court cases to recover billions in assets.
Evergrande’s collapse also highlights wider troubles in China’s property sector, which has been battling a deep liquidity crunch since 2021. Earlier this month, China South City became the first state-backed developer to face a liquidation order, joining several private peers.
Although Beijing is trying to revive the sector through stimulus and easing property rules, analysts remain doubtful about a strong rebound, pointing to weak household demand and strained finances among buyers.
Evergrande’s liquidation is expected to drag on for a decade, with creditors unlikely to recover much. So far, liquidators have managed to raise about US$255 million from selling offshore assets, a tiny fraction of the US$45 billion in claims.
For many investors and homebuyers, the collapse has been devastating. “I chose Evergrande because I thought such a big developer would never fail. I was wrong,” one buyer wrote on social media while waiting for his unfinished home.
