[21st Century Economic Report]The net profit of Evergrande last year was 1.05 billion yuan, nearly doubled

21^st Century Economic Report, April 13, 2010

Reporter: Tan Lu, Hong Kong

On April 12, 2010, Xu Jiayin, Chairman of Evergrande Real Estate Group (03333.HK), attended the first annual results announcement conference since the listing. With the satisfactory result of the annual net profit of 1.05 billion yuan in 2009, an increase of 98.1% compared with that of the same period in the previous year, Xu Jiayin constantly emphasized that the sales this year would be better, and the sales target was 40 billion yuan.

Since the beginning of this year, the central government has repeatedly introduced measures for regulation and control. However, Xu Jiayin admitted that from the regulation in 2005, the macro-policy introduced each time would make a difference lasting for two to three months, and afterwards, the real estate market would recover the stable development.

The sales target was 40 billion yuan.

The contracted sales amount of Evergrande last year was 30.3 billion yuan, and the sales construction area was 5.637 million square meters. Xia Haijun, Vice-chairman and President of Evergrande, disclosed that the average selling price last year was 5,375 yuan per square meter, and the average selling price of the fourth quarter was 6,352 yuan per square meter, an increase of 40.8% compared with that of the first quarter in 2009, which was 4,511 yuan.

In 2010, the sales of Evergrande are more mighty. Xia Haijun said, the total sales amount of the first quarter this year was 8.39 billion yuan, and the contracted sales area was 1.315 million square meters. The contracted average selling price was 6,382 yuan per square meter, an increase of 41.5% compared with that of the same period of last year. For the upcoming May Day Holiday, Xu Jiayin hopefully said, the sales performance in that week was expected to be excellent. As of April 11, Evergrande had gained the contracted sales amount of 1.6 billion yuan in April.

By the end of last year, Evergrande had owned 57 real estate projects in 25 major cities of the country, with the land reserve of 54.976 million square meters, and the average cost of 452 yuan per square meter, which could met the needs for large-scale development in the next 5 years. Xia Haijun said Evergrande newly purchased 13 pieces of land in 9 cities in 2009 with a total increase of land reserve of 13.08 million square meters and the average cost of 602 yuan per square meter.

The land reserve plan of next year, Xia Haijun said, would still be concentrated in the second and third-tier cities. It was hoped to increase the land reserve by over 10 million square meters, and it was estimated that the construction area this year would remain 18 million square meters, and the planned as-built area would be 8 million square meters, among which, there were 5.39 million square meters sold in 2009, equivalent to the income from 67% of the completed area.

The liability rate target was no higher than 40%

Xie Huihua said that by the end of 2009, the unpaid amount for purchasing land of Evergrande Real Estate Group was 7.9 billion yuan, and the payable amount for purchasing land in 2010 to 2012 would be 4.1 billion yuan, 1.4 billion yuan, and 2.3 billion yuan respectively. However, due to the sufficient cash in hand, even if the amount for purchasing land must be paid off in a short time due to changes in relevant polices, Evergrande could also afford it.

Xu Jiayin stressed that it was hoped to maintain the non-restricted cash of over 4 billion yuan all throughout the year, with the liability rate target of no higher than 40%, the gross profit rate of 30%-40%, the net profit no lower than 15%, and the EBITDA interest coverage rate target no less than 5 times.

On January 22, Evergrande completed the issuance of 5-term senior notes of 750 million U.S dollars, creating a new record of debt scale of real estate enterprises of Mainland China listed in Hong Kong, and fully repaid the structured secured loan of 290 million USD which will expire in October 2010.

Xu Jiayin said, from the end of last year up to now (4 months), Evergrande had been in a status of holding net cash. The performance report showed that by the end of last year, Evergrande had held the total cash amount (including cash, cash equivalent, and restricted cash) of 14.38 billion yuan, with the total bank loan of 14.

18 billion yuan, the undrawn bank financing amount of 20.45 billion yuan, and the recoverable contracted sales amount of 5.7 billion yuan. And the short-term loan was about 6.36 billion yuan, an increase of 2.4% compared with that of the same period in the previous year; the long-term loan was about 7.

82 billion yuan, an increase of 85.3% compared with that of the same period in the previous year.