China Evergrande New Energy Vehicle Group (708) H2 2024 earnings summary

Executive summary

• Recorded significant impairment losses in 2023: RMB1,443 million (property, plant, equipment), RMB3,349 million (intangible assets), RMB19 million (right-of-use assets), and RMB926 million (other receivables), mainly due to business plan changes and economic headwinds.

• Suspended development of all models except Hengchi 5 and ceased battery operations to consolidate resources, impacting asset valuations and impairment methodology.

Financial highlights

• Total impairment for the Hengchi 5 NEV manufacturing CGU was RMB1,541 million, with construction in progress accounting for RMB1,086 million.

• Impairment losses for NEV CGU development costs reached RMB3,337 million, with RMB176 million for Hengchi 5 and RMB3,161 million for other models.

• Aggregate impairment for construction in progress (NEV and NEB) was RMB1,136 million.

• Other receivables gross carrying amount as of 31 Dec 2023: RMB16,953.8 million (Group 1), with total loss allowance of RMB1,372.2 million across all groups.

Segment performance

• NEV segment focused solely on Hengchi 5, with all other model development suspended due to financial constraints.

• NEB (battery) segment ceased operations, with assets valued at fair value less costs of disposal and full impairment recognized.