BRIEF: Auditor casts doubt on Ever Reach’s ability to continue as going concern
Property developer Ever Reach Group (Holdings) Co. Ltd. (3616.HK) on Monday reported its revenue totaled 2.76 billion yuan ($38.5 million) last year, down 22% year-over-year. The company posted an annual loss of 270 million yuan, compared with an annual net profit of 40.94 million yuan in 2023.
The company held approximately 410 million yuan in cash and restricted bank deposits at the end of the period. Its short-term bank borrowings totaled 370 million yuan, while long-term bank borrowings stood at 388 million yuan. Ever Reach’s gearing ratio rose roughly 15.7 percentage points to 66.8%, from 51.1% at the end of 2023.
Ever Rich’s auditors noted that financial guarantees provided by the company to third parties and one affiliate could trigger cash outflows totaling up to 6.84 billion yuan. Given the company’s low cash levels and the uncertainty over its ability to generate sufficient cash flow, they expressed significant doubt about Ever Rich’s ability to continue operating as a going concern.
Trading in Ever Rich shares has been suspended since April 2 last year. The stock last traded at HK$0.26 before the halt.
By Lau Chi Hang
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