China’s second-largest property developer Evergrande expects its health unit to record a net loss of 1.4 billion yuan ($209 million) for last year, thanks to its investment in struggling electric car startup Faraday Future.
While the health business of Evergrande Health Industry Group “is expected to be stable,” with a net profit of around 300 million yuan, Evergrande Health’s new energy vehicle business is expected to record a net loss of 1.7 billion yuan last year, according to a recent stock exchange filing.
Evergrande Health blamed the result on “losses in its investment in Smart King.” Evergrande agreed in 2018 to invest $2 billion over three years in Smart King, the entity that controls Faraday Future.
Faraday Future, founded by blacklisted Chinese entrepreneur Jia Yueting, was once touted as China’s answer to Tesla. But the carmaker was left floundering after the 2017 collapse of Jia’s business empire, which also included entertainment, smartphones and TVs.