On the evening of September 21, Evergrande Automobile released its 2023 interim results announcement. The financial report shows that as of June 30, 2023, the company's total assets were 42.852 billion yuan, total liabilities were 75.692 billion yuan, and more than 760 Hengchi 5 units had been delivered. In 2018, Evergrande "changed lanes to overtake" and entered new energy vehicles. At that time, Xu Jiayin believed that this “dream of building a car” would definitely come true. Three years later, Hengchi 5 started delivery, and Xu Jiayin’s dream became a reality. Looking at it now, there is still a big gap between this dream and reality.
Debt of nearly 75.7 billion yuan after four years of car manufacturing
According to the financial report, as of June 30, 2023, Evergrande Automobile’s total assets were 42.852 billion yuan and total liabilities were 75.692 billion yuan. Liabilities have far exceeded total assets.
Evergrande Automobile's liabilities mainly come from three aspects: borrowings, trade and other payables, and other liabilities. Among them, borrowings, trade and other payables all increased.
In terms of borrowings, as of June 30, 2023, Evergrande Automobile's borrowings were 26.997 billion yuan, an increase of 1.012 billion yuan from 25.985 billion yuan as of December 31, 2022.
The financial report shows that part of the borrowings are secured by the Group's properties and equipment, land use rights, properties under development and the equity interests of certain subsidiaries of the Group. As of June 30, 2023, the average annual interest rate on borrowings was 7.1% (December 31, 2022: 7.65%).
In terms of trade and other payables, as of June 30, 2023, Evergrande Automobile's trade and other payables were 42.273 billion yuan, a year-on-year increase of 11.477 billion yuan from 30.796 billion yuan on December 31, 2022.
In terms of other liabilities, as of June 30, 2023, Evergrande Automobile's other liabilities were RMB 6.422 billion.
Revenue increased more than five times in the first half of the year, and losses reached 6.873 billion
Regarding the current performance situation, the financial report shows that Evergrande Automobile's revenue in the first half of 2023 was 155 million yuan, a year-on-year increase of 540.98%, mainly due to the start of sales of Hengchi 5.
While revenue is growing, Evergrande Automobile's losses are also further expanding. During the reporting period, Evergrande Automobile recorded a business loss of 5.812 billion yuan from continuing operations, a year-on-year increase of 50.09%. This was mainly due to the principle of prudence and the provision for impairment of inventories, plants and equipment, and intangible assets.
During the reporting period, Evergrande Automobile recorded a loss of 1.061 billion yuan from discontinued operations held for sale. The sale of this business was completed on May 12, 2023. In summary, the Group recorded a loss of RMB6.873 billion during the reporting period.
760 vehicles delivered in half a year, power battery research and development halted
In 2018, Evergrande announced its intention to “build cars”. In July 2022, Hengchi 5 will be available for pre-order. The financial report shows that among all pre-sale orders for Hengchi 5, more than 760 units were delivered during the reporting period.
In other words, Hengchi delivered less than 1,000 vehicles in the first half of the year. Compared with the delivery volume of thousands or tens of thousands per month among the new car-making forces, there is indeed a big gap.
Evergrande Auto stated in its financial report that it will make every effort to promote the mass production and delivery of Hengchi 5 in the future. The company will continue to lay a solid foundation for research and development, and while accelerating the research and development of core technologies to lead the research and development of smart electric vehicle technology, continue to focus on the research and development of new models.
The financial report shows that Evergrande Automobile has 457 scientific researchers. A total of 3,512 patents have been applied for in similar research fields worldwide, of which 2,715 have been granted patent authorization.
Evergrande Automobile stated that according to the group's financial situation, during the reporting period, the group concentrated its resources on the vehicle field, and the research and development of power batteries and base construction stopped.
The domestic new energy vehicle industry has entered the knockout stage in 2023. Under the huge debt, it is still unknown how far Evergrande can go in building cars, and whether Xu Jiayin’s dream of building cars can be fulfilled.