China Evergrande Group’s share (3333.HK) surged as much as 4% with listed automotive concern under the group China Evergrande New Energy Vehicle Group Ltd (0708.HK) rallied 17% on Monday posting optimism on the group’s announcement to shift focus on growth of its electric vehicle business over the core real estate business.
The group’s chairman Hui Ka Yan on late Friday announced in 10 years’ time horizon the company would move from its primary business real estate to electric vehicle venture.
According to Securities Times, Hui added property sales would slow down to 200 billion yuan on an annual basis compared to 700 billion yuan last year.
In another development the developer earlier announced it had resumed work on more than 10 projects in six cities across the country. Developments of these projects were earlier halted on due payments to suppliers and contractors.
Optimism boosted further on the outlook of the real estate sector when sate newspaper Xinhua reported spillover risk over the financial industry with respect to default risk of Chinese real estate sector is controllable. The state media citied interview with “relevant departments” and “authoritative people”.
The embattled real estate group is in deep crisis with more than $300 billion in liabilities and last week avoided default in the 11th minute meeting bond coupon payment.
The debt crisis looming over the Chinese real estate media became a daily watch list for global trader on concerns of broader contagion.