In the latest development surrounding China Evergrande (HK:3333), founder Hui Ka Yan is currently under investigation for alleged criminal behavior. This news comes in the wake of Evergrande's bankruptcy protection filing, which was announced on the Hong Kong Stock Exchange. The real estate giant, burdened with $300 billion in debt, succumbed to market changes and impacts from the Covid pandemic.
Evergrande, with a market cap of 219.39M USD, as reported by InvestingPro, has been grappling with a significant debt burden, one of the issues highlighted in InvestingPro Tips. It's worth noting that the company has been struggling with accelerating revenue growth, with the latest figure standing at 528.06M USD, a growth of 5.05%.
Prior to the bankruptcy announcement, Evergrande had been a prominent player in China's economic landscape, a point also noted in InvestingPro Tips. Hui Ka Yan, known for his distinctive Hermès gold-buckled belt and high-profile investments such as Guangzhou's top soccer club and a venture with actor Jackie Chan, had risen from poverty to wealth through education at Wuhan University of Science and Technology.
Hui's standing in Chinese society was further cemented by his alignment with President Xi Jinping and his participation in the Chinese People’s Political Consultative Conference. These affiliations did not shield him or his company from the financial crisis that unfolded after the 100th-anniversary celebration of the Communist Party.
As investigations continue into Hui's alleged criminal behavior following Evergrande's collapse, the future of one of China's most significant real estate entities remains uncertain. The company's P/E ratio stands at 9.68, as per InvestingPro data, indicating a lower valuation relative to its earnings. Moreover, the company's stock has taken a significant hit over the last week, month, and six months, with respective price total returns of -3.21%, -1.25%, and -4.9%.
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