China's Richest 2019: Hui Ka Yan Drives Evergrande's Efforts In Faltering EV Market

As China’s property market runs out of steam, China Evergrande Group founder Hui Ka Yan has an ambitious plan for his highly indebted property company to become a leading global maker of electric vehicles (EV).

"China is poised to become a world leader in the production of new energy vehicles,”

Hui said at a September ceremony in Shenzhen marking a new partnership with five global auto firms to jointly develop new energy vehicles. “The agreement allows Evergrande New Energy Vehicle Group to become a major force in this development.”

The trouble for Hui is that EV sales in China are slumping as property prices show signs of wilting. That makes it harder for China Evergrande to service its nearly 1.8 trillion yuan ($248 billion) in debt, roughly a fifth of which needs to be repaid or refinanced in the next year as credit tightens in China’s cooling economy.

Concerns among investors about how Evergrande will manage its debt have sent shares of the Hong Kong-listed group tumbling roughly 40% from their peak in March this year. That’s helped send Hui’s own net worth down 10% to $27.7 billion. Hui declined to comment for this article.

Evergrande aims to reduce its debt by, among other things, strengthening sales and accelerating collection of accounts receivable, according to a company spokesperson who asked not to be named

And Evergrande never seems to want for willing lenders. This year alone, Evergrande tapped the offshore bond market for $6.7 billion, making it this year’s largest corporate issuer of debt in Asia outside Japan, according to Thomson Reuters.

Hui, 61, started Evergrande in 1996 and built it into the country’s second-largest developer by sales. In 2010, he made the China Rich List for the first time with an estimated $4 billion fortune. Just two years ago, a fourfold increase in Evergrande’s stock sent Hui’s net worth to a peak of $45.3 billion, making him the richest person in Asia. Hui is also a notable philanthropist. He and his business gave away $590 million to poverty relief efforts in 2018, earning him the top spot on Forbes China’s 2019 philanthropy list.

Evergrande’s move into EV got off to a bumpy start After initially agreeing in 2017 to pay $2 billion for a 45% stake in U.S.-based EV startup Faraday Future, Evergrande’s Hong Kong-listed healthcare unit, Evergrande Health, in January took a smaller, 32% stake for a lower valuation of $800 million.

Evergrande Health, which is 75% owned by Evergrande Group, has gone on to invest a total of $3.6 billion in various EV-related businesses, including a battery maker, a motor maker and an auto sales network. In January it paid $930 million for a 51% stake in National Electric Vehicle Sweden, which has plants in Sweden and China.