Organization

Evergrande is selling 5% for HK$8.175bn and NGG is issuing 5% for the same amount, reducing Evergrande from 100% to 90% of NGG. After restructuring, Evergrande will own 71.76% of NGG, so the investors will have 7.97%, valuing it at HK$205.1bn (US$26.3bn). NGG had 2020 net profit of just CNY102.9m (US$15.8m) and net assets of CNY3.1bn (US$478m), implying an old-money P/E of 1665 and P/B of 55. Evergrande has granted a put at a 15% premium if the IPO does not proceed in 1 year with at least CNY150bn pre-IPO valuation.