The third richest person in China is about to get even richer: his wealth is set to increase $2 billion more in a financial windfall for record sales last year.
Hui Ka Yan, Chairman of China Evergrande Group, will pocket the money after having announced a record profit for fiscal 2018 by the property developer and soon-to-be electric vehicle maker.
According to a report late Sunday, the board announced a 1.42 yuan per-share payment for the year ended Dec. 31. That would equate to 18.7 billion yuan ($2.7 billion), and Hui would earn the lion's share with a 78 percent stake in the company.
Evergrande's stock was up 3.4 percent in Hong Kong's morning trading, easing the downturn this year to 14 percent.
Ambitious Goal
Last year, the 61-year-old company owner did not take a paycheck and was paid an equivalent of around $34,000 in fees. According to the Bloomberg Billionaires Index, however, is worth $27.5 billion.
Evergrande has pumped billions of dollars into investments as Hui pursues a goal in the next three to five years to make the firm the world's largest producer of electric cars.
The money burning foray into electric cars comes as the net debt-to-equity ratio of Evergrande hovers near 153 million, one of the biggest in China's property development ventures.
According to real estate analyst Kristy Hung, "the dividend of Evergrande is likely to intensify its cash crunch further. The combination of poor first-half revenue, dropping money receipts, and capital burning from its electric vehicle venture suggests that Evergrande will fail to shake off enough net debt to meet its goal."
So far, for all his grand plans, Hui has little to prove, vowing last month to unleash a debut car by June 2020 - a year later than the tycoon promised.
Collision Course
This not only pits him against Elon Musk's Tesla Inc., which has been churning out EVs for years, but also against all the world's leading manufacturers, who are plowing tens of billions of dollars into EV development and research.
At a time when sales are slumping, Evergrande will also enter a the highly-stacked domestic field as the government reduces subsidies.
The proposed dividend translates the developer's 37.4 billion yuan profit last year into a 50 percent payout ratio, the same since its listing. Shareholders will vote at a general meeting on January 15 to approve the dividend.
Twice since March, Evergrande had delayed a decision on 2018 the dividend, partially to conform with Chinese regulatory rules as it pursues a back-door listing for its real estate assets on the mainland.
