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    3333   KYG2119W1069

CHINA EVERGRANDE GROUP

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China's Evergrande to sell stakes in HengTen internet unit for $418 million

08/01/2021 | 10:08pm EDT
FILE PHOTO: An exterior view of China Evergrande Centre in Hong Kong

HONG KONG (Reuters) -China's most indebted property developer Evergrande Group has agreed to sell stakes in its internet unit HengTen Networks Group Ltd worth a total of HK$3.25 billion ($418.2 million), an exchange filing showed on Sunday.

Shares of Evergrande declined more than 2% in early trading on Monday on continued worries over its financial health, while HengTen jumped more than 30%. Shares of HengTen resumed trading on Monday after a suspension on Thursday.

Worries over the developer's debt and the potential for systemic financial risk have intensified after Evergrande said in June its project companies had not paid some commercial paper on time, but it said it was arranging payment.

Fitch downgraded its credit rating on Wednesday, signalling its concern of a potential default.

To ease the pressure, Evergrande will sell a 7% stake at HK$3.20 per share to a unit of Tencent Holdings Ltd. for HK$2.07 billion and a 4% stake to an unidentified buyer for HK$1.18 billion. The filing did not give a timing for the sale.

Before the transaction, Evergrande held a 37.55% stake in the company, while Tencent held 16.9%. Evergrande's stake will go down to 26.55% and Tencent's holdings will increase to 23.9% after the sale, the filing showed.Evergrande has agreed to provide a 5-year loan of HK$2.07 billion to HengTen to support its business development, the company added in the filing.

HengTen's shares are expected to resume trading on Aug. 2 after being halted on July 29, the filing showed.

($1 = 7.7720 Hong Kong dollars)

($1 = 7.7721 Hong Kong dollars)

(Reporting by Marius Zaharia; Additional reporting by Clare Jim; editing by Barbara Lewis and Sonali Paul)


ę Reuters 2021
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Analyst Recommendations on CHINA EVERGRANDE GROUP
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Financials
Sales 2021 547 B 70 330 M 70 330 M
Net income 2021 9 085 M 1 167 M 1 167 M
Net Debt 2021 354 B 45 433 M 45 433 M
P/E ratio 2021 3,72x
Yield 2021 1,49%
Capitalization 33 663 M 4 325 M 4 326 M
EV / Sales 2021 0,71x
EV / Sales 2022 0,47x
Nbr of Employees 163 119
Free-Float 15,3%
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Mean consensus HOLD
Number of Analysts 12
Last Close Price 2,55 HKD
Average target price 11,13 HKD
Spread / Average Target 337%
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Managers and Directors
Hai Jun Xia Vice Chairman & Chief Executive Officer
Shou Ming Shi President
Da Rong Pan Chief Financial Officer & Executive Director
Ka Yan Hui Chairman
Dong Feng Chen Head-Information
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