Things are going from bad to worse for the embattled China Evergrande.
Asia Markets can reveal companies that once had a strong relationship with the real estate giant are beginning to walk away.
Among them is supplier Zhibang Home Furnishing, which reported major losses in 2021 as a result of its deep ties with developers.
The divorce
In its annual report, Zhibang did not specifically blame Evergrande, however it has reportedly “cut off co-operation” with the company, which was once one of its five largest customers.
“Zhibang Home Furnishings, which relies on bulk business, made a timely withdrawal from the thunder of real estate,” Chinese media reported.
“It parted ways with China Evergrande and has successfully recovered all of the money it was owed, but has not completely escaped this wave of real estate robbery.”
The report went on to say that Zhibang recently began litigation against Wuhan Evergrande Chutian Real Estate Development Co., which is part owned by Evergrande.
Symptom of broader crisis
Sadly, Zhibang’s case is not uncommon.
It’s understood more than 20 home building materials companies have at least partly blamed real estate developers for recent losses.
Those companies are said to include Wole Home Furnishing and Dinggu Group.
Further to that, there are the highly-publicised problems being experienced by Evergrande developers.
Earlier this year, Asia Markets reported that one Evergrande bondholder has resigned himself to never seeing his money again and a leading investment advisor warned the company was headed for a ‘brutal collapse.’