By HUANG Yu

After a suspension of over 16 months, Evergrande Property Services Group stock collapsed on its first day back in the market, down 47.39 percent, closing at HK$1.21 (US$0.15, 1.11 yuan), with a total market value of HK$13 billion.

This result did not come as a surprise. Other real estate companies that previously resumed trading also watched their stocks tumble on reentry.

Compared to the other two listed companies under Evergrande Group - China Evergrande and Evergrande Auto - Evergrande Property Services has better fundamentals and more sustainable operations.

In March last year, Evergrande Property Services announced that 13.4 billion yuan of its deposits were occupied by its controlling shareholder, China Evergrande, leading to suspension along with China Evergrande and Evergrande Auto. This became the biggest obstacle in the process of Evergrande Property Services' resumption of trading.

THE Hong Kong Stock Exchange's demanded an independent investigation into the 13.4-billion-yuan pledge guarantee before resumption. The investigation was completed in February of this year.

The resumption announcement of Evergrande Property Services came with some details regarding the13.4 billion yuan, including that its waspart of the proceeds from Evergrande Property Services' IPO.

Evergrande Property Services not set up an account for the proceeds of the IPO and so the money was mixed with its own funds and used for daily operations. regarding remedial measures to recover the 13.4 billion yuan, Evergrande Property Services has made no progress, only "taking various measures."

For Evergrande Group and its chairman, Hui Ka Yan, the resumptions of Evergrande Auto and Evergrande Property Services trading do not mean much positive. However, for the shareholders of Evergrande Property Services, the resumption means they can offload.

Evergrande Property is currently in a state of negative net assets. Total assets were approximately 7 billion yuan, with attributable net assets of about negative 2 billion yuan and total liabilities of about 8.7 billion yuan.

However, Evergrande Property can still generate cash flow by providing property services. In 2022, operating revenue was 11.8 billion yuan.

In addition, Evergrande Property Services' total contracted area is approximately 820 million square meters, and the total area under management was approximately 500 million square meters, an increase of 27 million square meters compared to the previous year.