By Mike Bird

It's been a bad year for buybacks. Except, that is, for the company with the largest debt interest bill of any nonfinancial listed stock on the planet, according to Capital IQ.

China Evergrande Group has repeatedly bought back its own stock this month, despite its seeming financial fragility. That's just another reason to remember that however shaky it looks, betting against the country's biggest property developer is extremely risky.

The stock was briefly down more than 50% year-to-date in late March, but it has now erased more than half of that fall. That puts it practically in line with other major property stocks, many of which were down less than 30% at their trough.

The mechanics of the buybacks have been explained in forensic depth by Travis Lundy, an independent special situations analyst publishing on Smartkarma, who also dug into the company's similar 2018 move.

During the period since May 4, the company has spent a little more than 830 million Hong Kong dollars ($107.07 million) on sporadic buybacks, while the stock has risen by 21%, over a period where the Hang Seng Index is up around 2%. The company's market capitalization has increased by 45 billion Hong Kong dollars.

It's possible to do this relatively cheaply because most of the shares aren't traded publicly. More than three quarters are owned by Chairman Hui Ka Yan, and so it's relatively inexpensive to bump the stock higher, while burning anyone shorting the company's equities. On the days it has bought stock, it snapped up between 11.8% and 54.2% of the total volume traded, according to Mr. Lundy.

On the surface, the company's performance this year has been astonishing: sales rose 11.6% year-over-year in April and the company aims to boost sales by more than 30% this year overall.

But the recent boost has relied on various incentives for buyers, the financial impact of which remains to be seen. In February and March the company offered steep discounts on property sales conducted online, as large as 25% at their peak. Chinese media reported that down payments of as little as 5,000 Chinese yuan ($704.38) were required for some purchases.

Since the lion's share of Chinese property companies' funding now comes from pre-sold property, that matters a lot. But it also gives another reason to believe that China's very largest property developers are too big to fail. If Evergrande were to collapse, it wouldn't just be the company's bondholders that would lose out. Buyers of presold properties -- ordinary Chinese households -- are effectively the sector's greatest lenders, and ones which the Chinese government is unlikely to let go to the wall.

The case for backing Evergrande as a business is shaky, but the combination of an implied state guarantee and the ability of its owners to inflate its stock price with relatively little money are reasons to fear betting against it directly.

Write to Mike Bird at Mike.Bird@wsj.com 



  Corrections & Amplifications


  This was corrected at 9:25 a.m. ET because the original misstated the figure for sporadic buybacks in dollars as $107.07 in the fifth paragraph. It is $107.07 million.