Interim results released by Evergrande in Hong Kong showing sharp increase in multiple indexes

On August 30, Evergrande Real Estate Group released its interim results for the year 2010 in Hong Kong. Present at the release conference were Professor Hui Ka Yan, Chairman of the Board of Directors of the Group, Dr. Xia Haijun, Vice-chairman of the Board of Directors and President of the Group, and Xie Huihua, Executive Director and CFO, who interacted with the reporters.

Sharp increase in multiple indexes

In the period, under the guidance of new starting point, new ideas, new thinking and new goals , the Group saw sharp increase in multiple indexes thanks to prudent operations. The interim report shows that, as of June 30, 2010, the business turnover and gross profits reached 20.37 billion yuan (RMB, similarly hereinafter) and 4.

95 billion yuan, up 1,142.0% and 800.0% from a year ago; the profits due to shareholders were 2.33 billion yuan, up 366.0%, amounting to 0.16 yuan per share; net profits rose from 520 million yuan in the same period of last year to 2.5 billion yuan, up 380.8%; the profits of primary business increased from 150 million yuan to 1.

94 billion yuan, up 1,193.3% year-on-year.

The interim report also shows that, in January through June 2010, the Group realized 20.98 billion yuan worth of contracted sales in accumulation, up 104.9%; 3.339 million square meters of contracted sales area, up 54.7%; an average contracted selling price of 6,282 yuan/m², up 32.5%. The contracted sales reached a record high for the same period, enabling the Group to rank No. 1 in China in terms of the contracted sales area within the period.

Quick development, with no hoarding of land

As a leading real estate enterprise of China, Evergrande is the first to enter the second- and third- tier cities with huge development potentials and urban-rural fringe areas with great appreciation potentials. By acquiring small local real estate enterprises through diversified channels, the Group has realized the integration of resources and the absorption of land that is high in quality, but low in cost.

In the first half of 2010, the Group purchased 26 land parcels and increased its land reserve by 22.215 million m² of floor area, which are distributed in 21 cities with growth potentials, including Tianjin, Chengdu, Taiyuan, Shenyang, Jinan, Changchun and Zhongshan. The cost of the land reserve increased within the period is about 738 yuan / m².

Chairman Hui noted that the Group sticks to the approach of quick development and quick sales for every project, which is characterized by 4 points:
1. Quick development after obtainment of land. As of June 30, 67 of the 73 projects are in full-swing construction,
accounting for 92% of the started projects;
2. Large-scale development. Evergrande ranks first in China in terms of the area under construction, which reached 23.06 million m²,
accounting for 32% of the entire land reserve;
3. Quick sales. The Group sold the largest area in China in the first half of the year;
4. Large-scale low-price sale. In the first half of the year, the properties delivered by Evergrande averaged 5192 yuan/m².
Each and every project is available for sale all the year round without hoarding.

Nearly 50 billion yuan of funds available

The Group has always upheld a strategy of prudent operation and maintained adequate cash flow. As of June 30, 2010, the cash balance of the Group was RMB 18.49 billion yuan, a high level of the industry. This plus the 25.24 billion yuan of banking facility not yet used and 5.79 billion yuan not yet recovered from contracted sales places the Group in possession of 49.52 billion yuan of funds available. The prudent financial management policy and the adequate financial resources are sufficient to support the rapid and stable business growth of the Group.

Also in the period, the Group accurately foresaw the future trend of the international capital market and the tendency of China toward macro-control and tightening of monetary policy and issued 1.35 USD worth of senior notes on the international capital market by seizing hold of two opportunities.

Chairman Hui pointed out: Since it was listed, Evergrand has focused heavily on prudent operation and raised very high requirements for cash flow. At the beginning of the year, the Group planned to maintain a monthly cash balance of more than 10 billion HKD, which actually remained at more than 15 billion HKD based on our forecast for the domestic trend of macro-control and even reached 21.19 billion HKD in June.

Build more high-quality residences that ordinary people can afford

Over the years, the Group has always adhered to the philosophy of livelihood real estate to build high-quality residences while controlling cost through quick obtainment of land, quick development and quick sales.

At the press conference, Chairman Hui stated: Most of Evergrande s profits come from its forward-looking development strategy, its strong capability of cost control and the profits surrendered by its strategic partners, including contractors and material suppliers. Evergrande should profit less from ordinary people and build more high-quality residences that they can afford.