Shares in the electric car unit of China Evergrande, the world’s most indebted property company, surged to a record high after a $3.4bn cash injection boosted hopes for its stalled ambitions to rival the likes of Tesla.
The company’s Hong Kong-listed shares soared more than 60 per cent on Monday, a day after the group announced that strategic investors had bought a 9.75 per cent stake for HK$26bn (US$3.35bn).
The rally boosted the EV unit’s market capitalisation by $17bn to $51bn, far in excess of that of its parent company. Evergrande, whose shares rose by 8 per cent on Monday, has a market cap of $28.8bn.
Evergrande Auto, as the EV unit is known, has vowed to spend Rmb30bn ($4.6bn) between 2019 and 2021 building factories and acquiring technical expertise in its bid to become a global leader in electric cars.
But production delays, unfinished factories and the company’s naming in an industry investigation by China’s state planner have piled pressure on…