China Real Estate Enterprises: Evergrande Speedily Develops High-quality Houses of High Cost-performance Ratio

BEIJING, Nov. 4, 2010 /PRNewswire-Asia/ -- According to the half-year data reported by Evergrande Real Estate, the operating income of Evergrande Real Estate of the first half year is 20.37 billion yuan, with an increase of 1142.0% compared with that of the same period of last year, taking the lead among large-scale real estate companies. The achievement of Evergrande's annual sales target of 40 billion can be expected soon. An original report by Sina Leju follows:

Speedy Development without Hoarding of Land

At the news conference concerning the half-year report, Evergrande Real Estate disclosed that, as a leading real estate enterprise in China, guided by policies, Evergrande has developed residences in the 2nd-tier and 3rd-tier cities with high development potential and areas with high appreciation potential such as the rural-urban fringe zones in the earliest time for purchasing high-quality and low-cost land. At present, the total land reserve of Evergrande is distributed in 73 projects in 36 cities, of which 89% are the cities at the provincial capital level, which is the largest number of cities at the provincial capital level in the country. It may take three to five years for Evergrande to develop the total land reserve in a rolling way; the distribution of the projects is extensive with the average land reserve per city of only two million square meters. 23.94 billion yuan has been paid among 37.56 billion yuan, the total price for 72.38 million square meters as Evergrande's land reserve, and the unpaid land price totals 13.62 billion yuan. According to agreements, 6.54 billion yuan of the unpaid land prices shall be paid in the second half of 2010, 5.96 billion yuan shall be paid in 2011, and 1.12 billion yuan shall be paid in 2012.

According to the introduction of personnel of the Company, the Company's land development mode and idea is the strategy of building a large and powerful company through speedy and large-scale development without hoarding of land.

According to the personage who knows Evergrande well, although the area of the Company's land reserve is large, the Company will never hoard any land. It will adopt the mode of Mcdonald's in the real estate industry for development and the strategy of speedy development. According to the introduction, each project of Evergrande is developed speedily on a large scale and sold speedily at low prices. There are four characteristics: I. Evergrande speedily develops real estate once the land is obtained. Until Jun. 30, the construction of the 67 among the 73 projects had been started on a large scale with the proportion of 92%; the development of all projects had been completed within the specified periods strictly according to land contracts; II. Construction of houses is in progress on 23.06 million square meters among 72.38 million square meters of the land reserve of Evergrande, which is No. 1 in the country, accounting for 32% of its total land reserve; III. Evergrande speedily sells the residences and the sales area of the first half year ranks No. 1 in the country; IV. Evergrande sells the residences in large scale at low prices. Evergrande's average price on handover of residence in the first half year is 5,192 yuan/square meter, and there are residences of each project available for sales in all seasons of the year.

Stable Operation with Sufficient Cash

The data of Evergrande Real Estate's performance report of the first half year indicates that the turnover of Evergrande Group in the first half of this year has increased to 20.37 billion yuan from 1.64 billion yuan of the same period of last year with an increase of 1142.0%; the gross profit has increased to 4.95 billion yuan from 0.55 billion yuan of the same period of last year with an increase of 800.0%; the net profit has increased to 2.5 billion yuan from 0.52 billion yuan of the same period of last year with an increase of 380.8%; the profit from the main business has increased to 1.94 billion yuan from 0.15 billion yuan of the same period of last year with an increase of 1193.3%; the proportion of sales and administrative expenses accounting for the turnover has decreased to 6.6% to a large extent from 46.7% of the same period of last year with a decrease of 40.1%.

According to the introduction of personnel of Evergrande Real Estate, in the aspect of cash flow, the Company has insisted on the strategy of stable operation and keeping sufficient cash flow. At the beginning of this year, the Company planned to keep about 10 billion HKD as the cash balance every month. But according to the estimation on the trend of the macroscopic regulation of the country, in fact, the cash balance of every month is kept at the level of more than 15 billion HKD, and even reached 21.19 billion HKD in June, ranking No. 2 among the real estate enterprises of the country. Until Jun. 20, 2010, the Company had had the unused bank credit line of 25.24 billion yuan and the receivable contracted sales amount of 5.79 billion yuan. Together with the term-end cash balance, the Company had had the available fund of 49.52 billion yuan.

SOURCE Sina Leju