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Evergrande’s EV unit to raise $346m for vehicle production

By Mensholong Lepcha

08:02, 22 November 2021

China Evergrande logo
China Evergrande logo – Photo: Shutterstock

Shares in China Evergrande New Energy Vehicle Group erased early losses to trade higher by Monday afternoon after the company announced a discounted share placement to raise HKD2.7bn ($346.5m).

Debt-ridden property developer Evergrande’s electric vehicle unit said it intends to use proceeds from the placement for research and development and production of new energy vehicles, “paving the groundwork for putting Hengchi new energy vehicles into production.”

The company said late on Friday that it will place 900 million shares at HKD3 per share.

Share price rebounds

The placing price of HKD3 per share represents a discount of 15% to its last close of HKD3.53.


42,359.35 Price
-3.260% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


1,992.37 Price
-0.590% 1D Chg, %
Long position overnight fee -0.0199%
Short position overnight fee 0.0117%
Overnight fee time 22:00 (UTC)
Spread 0.50


16,067.80 Price
0.000% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

Oil - Crude

71.08 Price
-0.090% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.030

Shares in the company fell as much as 3.1% by lunch break on Monday but recovered in the afternoon to trade 2.6% higher at HKD3.62.

Net proceeds after deducting all costs and expenses incurred is expected to be about HKD2.64bn, the company added.

Read more: Oil prices fall as Covid in Europe sparks demand concern

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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