Xu Jiayin, chairman of cash-strapped developer Evergrande makes public appearances, quashing speculation he can't move freely

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/business/article/3030165/xu-jiayin-chairman-cash-strapped-developer-evergrande-makes-public?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 26, 2019 10:38 AM SGT
Xu Jiayin, the billionaire chairman and founder of China Evergrande, a major developer that also aims to challenge Tesla in mainland China, made two public appearances in Hong Kong and Shenzhen recently, quashing rumours that his movement was restricted by Beijing.
Xu, also known as Hui Ka Yan in Hong Kong, is China's third richest man. There was speculation on Chinese social media that he had been banned from leaving the country.
"Investors are quite sensitive to news about Evergrande, with growing concern over its financial position and increasing debt," said Kenny Tang Sing-hing, chief executive at Royton Securities.
"The company saw some relief last year, with a lower gearing ratio. However, its situation has changed, with the central government adopting a tough stance on property companies raising capital."
The cash-strapped company is China's most indebted developer. It is sitting on 813.17 billion yuan in total debt and a skyrocketing 152.1 per cent gearing ratio, which illustrates its ability to repay loans.
On September 16, Moody's Investors Service downgraded the company, revising its rating to stable from positive, while Fitch, another ratings agency, downgraded its rating to stable on September 20.
"The outlook revision reflects Fitch's belief that the group's ability to cut debt will weaken due to flat contracted sales, higher payables stemming from heavier spending on non-property businesses and increased reliance on short-term debt," Fitch said in a note at the time.
Xu visited the construction site of Evergrande's new headquarter in Shenzhen's Nanshan district on Monday. Surrounded by company management, he did not speak to the media present even though the event was open to members of the press.
Last week, he paid a visit to the company's first residential project in Hong Kong. Evergrande obtained a presale permit for the 1,982-unit development, but it has not been launched yet. It is located in Tuen Mun, a district where home prices have tumbled following recent social unrest.
The company has bet heavily...