Evergrande (HKG: 6666) (OTC: EGRNF) shares are now relisted. 6666 shares dropped 50% as this happened. Which might even be taken as a gross over valuation still. As we noted just a little whole ago the American OTC quote dropped 95% in a day for Evergrande: “China Evergrande (HKG: 6666) (OTC: EGRNF) shares are down 95%. The fall here though means pretty much nothing, really nothing at all. For the quote in Hong Kong remains suspended, it's only the OTC quote in the US that has moved. And volumes there are so tiny that it's difficult to even claim this is a price. EGRNF might trade 30,000 shares in a day at present - we're not even certain whether that's $1.20 total value or $12 total value. It's not even possible to find a market maker to gain a quote in the stock.”
Well, as we say, that OTC quote is pretty much irrelevant, for us it’s the HKG quote that matters for Evergrande. Which is also, as we say, 50% down on the relisting.”Evergrande Property Services loses half of its value as stock resumes trading after 16-month halt
The stock lost HK$12.2 billion (US$1.5 billion) in market value as investors dumped about 330 million shares, or 8 per cent of its outstanding shares” Not a great vote in favour of the revitalisation of the firm that. Or as Reuters puts it: “The property services firm was dragged into financial troubles after its parent, China Evergrande Group, the world's most indebted property developer, became embroiled in a debt crisis in mid-2021 that later spread across the sector.”
Which is something we need to recognise here. This is not the parent group being discussed. As with Country Garden Services there are several interlinked firms each with their own quotes.
Evergrande Property Services share price from Google Finance
The prediction was that the shares would only - only - drop 36%. “ Shares of Evergrande Property Services Group 6666.HK are set to open 36.5% lower on Thursday as trading resumes after the stock was suspended since March 21, 2022.” Which isnot, obviously, quite how it turned out.
The market is thus suspecting worse than the mechanical calculation about expected value would predict. It’s true that this Evergrande, property services, is not the one that defaulted on foreign loans and so on. But it is, we think, something of a triumph of hope to think that there’s going to be a significant revival here.
