Evergrande, China’s largest property developer, said it would start paying down debt after revealing that net profit halved last year from a year earlier, largely as a result of soaring debt repayments.

With gross debt of $94bn, Evergrande is the country’s most indebted real estate company and holds roughly the same amount of debt as the government of Hungary.

A property bubble and rising corporate indebtedness are among the biggest risks facing the Chinese economy, according to government officials and independent economists.

Evergrande’s net debt of $50bn was 777 per cent of its equity at the end of 2016. The sector average was 90 per cent as of last June, according to data from Wind Information.

On Tuesday, the company said net profit fell 51 per cent in 2016 from a year earlier to Rmb5.1bn ($740m), due to a doubling in interest payments to holders of perpetual bonds — a form of borrowing with no repayment deadline.

Payments to perpetual bondholders rose by Rmb5.56bn over the year, almost matching the fall in net profit.

After the earnings announcement, the company’s chairman, Hui Ka Yan, unveiled a plan to repay half of Evergrande’s perpetual bonds, which currently total Rmb113bn, by the end of this year.

The company’s shares rose 8.9 per cent on Wednesday in Hong Kong.

“After this annual briefing, the management seems to finally understand the markets’ concerns about their leverage,” said Raymond Cheng, a Hong Kong-based analyst at investment bank CIMB.

Evergrande’s strategy of ramping up debt in order to buy up the largest land bank in China has made it vulnerable to the slowdown in the country’s property market and a government crackdown on lending to property developers.

“Before, they kept wanting to expand, but now they can take a breather and focus on profitability,” added Mr Cheng. Last year, the company bought up more than twice the amount of floor space it sold.

But some analysts are sceptical of Evergrande’s promises. “History has shown that Evergrande hasn’t repaid its debt even when it says it will,” said Nigel Stevenson at GMT Research, a Hong Kong accounting research firm.

Mr Stevenson pointed out that Mr Hui had pledged to cut back on perpetual bonds at last year’s annual report — and then sold another Rmb37bn worth of them.

If the company is sincere about paying down its debt, it has the cash flow from property sales to do so, said Mr Chen. Evergrande was the top property developer in China by value of sales last year, according to China Index Academy, a property research firm.

The developer faces time pressure to repay its perpetual bonds, which come with a “ratchet” clause meaning that the interest rate on the bonds is pushed higher over time. The average cost of its perpetuals is already high at 9.5 per cent, said Mr Cheng.

Evergrande hopes to raise funds by floating some of its property business on the mainland stock markets. Earlier this year it gained approval for a backdoor listing using Shenzhen Real Estate.