Townization Benefiting China Real Estate Enterprises, Evergrande Adjusting Sales Target to 100 Billion RMB with 25% Increase

Jan 14, 2013, 09:07 ET from Sina Leju

BEIJING, Jan. 14, 2013 /PRNewswire/ -- On January 14, Evergrande Group released the 2013 sales performance prospect. Judging the development trend of Chinese real estate market in the future based on the influence of the new urbanization policy, Evergrande has adjusted the 2013 contracted sales target to be 100 billion (RMB, the same below), with an increase of 25 percent compared to the 2012 sales target of 80 billion. An original report by Sina Leju follows:

Evergrande has always been adhering to its three strategies: forward-looking layout in the second- and third-tier cities, products positioning to meet the rigid demand for the people's livelihood and the sales strategy of fluctuating along with market changes. It achieved the full-year sales amount of 92.32 billion last year, completing 115.4 percent of the full-year sales target, with an increase of 14.8 percent on a year-on-year basis, continuing to rank No.1 among the Mainland real estate enterprises in Hong Kong. It also achieved the full-year sales area of 15.485 million square meters and continued to rank No.1 among the Chinese real estate enterprises. Since it was listed in 2009, Evergrande has overfulfilled the annual targets ahead of schedule for four consecutive years, and it once ranked No.1 in term of single-month sales area for nine consecutive months in 2012.

It's worth mentioning that more than 98 percent of Evergrande's sales amount last year benefited from the projects located in the non-first-tier cities, most of which are located in the third-tier cities. This is related to the fact that the new urbanization policy is beneficial to the real estate market.

As an important part of new industrialization, informationization, urbanization and agricultural modernization suggested in the report of the 18th National Congress of the Communist Party of China (CPC), new urbanization is undoubtedly the drive for a new round of development and will activate the rigid demand of real estate market.

The Mainland urbanization planning leaded by the National Development and Reform Commission (NDRC) will be released in the near future. According to the planning report, urbanization will stimulate the investment of 4 trillion yuan in the next ten years. In fact, the urbanization cannot be conducted without the steady and sound development of the real estate industry. The entering of real estate enterprises will provide great assistance for the improvement of the basic facilities in the small- and middle-sized cities, the strengthening of the town development space and potential as well as the enhancement of the urban bearing capacity.

According to Chen Huai, director of Policy Research Center of Ministry of Construction and director of Institute for Chinese Urban and Rural Construction Economic Research, driven by the general trend of new urbanization, the Chinese real estate market in the next five years will be one of the markets with the fastest demand growth around the globe.

Under the influence of the favorable news, along with the fact that Evergrande completed the 2012 sales target one month earlier, Evergrande's stock price has been increasing, with the opening price from HKD 3.11 on October 3 last year to HKD 4.75 on January 10 this year, with an increase of 52.7 percent. By January 14, the closing price of Evergrande's stock was HKD 4.48 after the small stock market fluctuation.

SOURCE Sina Leju