**: Viewpoint.com.
On January 9, China Evergrande Group issued an announcement clarifying a report issued by an institution on December 1, 2023 that the company had never made a profit.
The report claimed that Evergrande had never been profitable, but the board of directors of Evergrande reviewed the report and found that the report had no actual basis.
Evergrande Group further clarified the following points in the clarification announcement:
Revenue recognition: Evergrande Group did change its revenue recognition approach in 2021, but this decision was made based on a more accountable treatment in the current environment. The change comes in the wake of a liquidity crisis and a massive turnover of staff in the company.
Audit of Financial Statements: Evergrande Group's financial statements for the past years have been audited by PwC and a standard unqualified opinion has been obtained. Even in its departure letter, there was no question about Evergrande Group's revenue recognition in the past year.
Correlation between the data and conclusions of the report: The report believes that Evergrande Group's low gross profit suspects that profits do not exist, but in fact, the decline in profits since 2021 is not only the decline in selling prices caused by industry difficulties, but also related to the proportion of properties with low gross profit sold by the company. Simply because the gross profit is low, it is doubted that there is no lack of correlation in the profit. The report gives an example of Evergrande Group's serious losses, but the serious losses are related to the company's size and asset quality, so the large losses are considered to be Evergrande Group's never profitable and lack of relevance.
Lack of substantive evidence: The report shows no substantial evidence that Evergrande has never been profitable, and its so-called conclusions are only speculation and suspicion on the part of the authors.
Argumentation accuracy: The report uses the results of 2023 to demonstrate the accuracy of its 2016 against Evergrande Group, which has no substantive basis.
The board of directors of Evergrande Group stated that it will continue to pay attention to the information from all parties and take appropriate further actions or measures when necessary. At the same time, Evergrande Group confirmed that members of its audit committee and Shanghui Baicheng Certified Public Accountants*** have reviewed the report, and said that they will not withdraw their previous audit opinions on Evergrande Group's financial statements.
Evergrande Group reserves the right to take legal action against the institution.