HONG KONG, Sept 1 (Reuters) - China Evergrande Group"s (3333.HK) shares and bonds extended declines on Wednesday, a day after the debt-laden developer warned of default risks and legal action from creditors as it scrambles to repair its balance sheet. Evergrande, which has more than $300 billion in total liabilities, has been scrambling to raise the funds it needs to pay its many lenders and suppliers, with regulators and financial markets worried that any crisis could ripple through China"s banking system. Reporting first-half earnings on Tuesday, Evergrande said it would implement measures to improve cashflow, including adjusting project development timetables, renewing borrowings and disposing of equity interests and assets. But it cautioned that if it was not successful, it could default on borrowings and could see more litigation. While net profit jumped on asset sales, its income that includes non-controlling interests slid 29%. In addition, its gross profit margin tumbled 12.9% in the first half from 25% a year ago due to a drop in sales prices and delivered area. Citi analyst Griffin Chan said in a report he expects a loss in Evergrande"s core property business for the full-year, and cut its earnings per share estimate for the next two years by 59% and 60% due to lower margin assumptions. He also slashed its target price to HK$4 from HK$13.5. Shares of the country"s No. 2 developer fell as much as 2.5% in Tuesday morning trade to HK$4.25. The stock has lost more than 70% of its value this year. The mid-price of Evergrande"s 7.5% June 2023 dollar bond was last quoted at 36.92 cents by financial data provider Duration Finance, down nearly 2 cents. Its 6.98% July 22 exchange-traded puttable bond was the third-biggest loser among corporate bonds on Wednesday, according to the Shanghai Stock Exchange, falling 0.15% to 66.7 yuan. ($1 = 6.4633 Chinese yuan)