[Southern Metropolis Daily] Evergrande Holds 50 Billion Yuan for Fast Development

Southern Metropolis Daily 2010-8-31 Zhan Qiyue

The interim report of Evergrande Real Estate released in Hong Kong yesterday indicates that the usable fund of Evergrande Real Estate is about 50 billion yuan, among which 18.49 billion yuan is the cash balance. The sufficient cash flow of Evergrande Real Estate benefits from the fast sales ability. The contracted sales amount of the first half year is 20.

98 billion yuan, and the contracted sales area is 3.339 million square meters, which is the champion exceeding that of Vanke. In the news conference, Evergrande emphasized fast development without land hoarding. At present, construction of 92% projects has started, with the area under construction accounting for 32% of the total land reserve.

Contracted sales area ranks No. 1 in the country

The interim report of Evergrande Real Estate indicates that the contracted sales amount is 20.98 billion yuan (RMB, similarly hereinafter), increasing by 104.9% compared with that of the same period last year; the contracted sales area is 3.339 million square meters, increasing by 54.7% compared with that of the same period last year, and the sales area ranks No. 1 in the first half year, exceeding that of Vanke; the average contracted selling price is 6,282 yuan/square meter, increasing by 32.5% compared with that of the same period last year.

Through comparative calculation, it is found that the strategy of Evergrande Real Estate to develop real estate in second- and third-tier cities has gained obvious effects. The contracted sales amount of second- and third-tier cities in the first half year accounts for about 90% of the total. The number of projects on sale increases from 25 of last year to 41, and the number of cities where the projects on sale are located increases from 16 to 21.

Cash is the king Usable cash reaches about 50 billion yuan

In the interim report, it is indicated that Evergrande has the unused bank credit limit of 25.24 billion yuan, the recoverable contracted sales amount of 5.79 billion yuan, and the term-end cash balance of 18.49 billion yuan. So Evergrande has a total of usable fund of 49.52 billion yuan.

According to an insider of Evergrande Real Estate, the Company has been adhering to the steady business strategy and keeping sufficient cash flow. The cash flow reached 18.49 billion yuan in June. Based on the pre-estimation of the introduction of the new policy, Evergrande Real Estate issued bonds for financing 750 million USD and 600 million USD respectively in January and April before the introduction of the new policy. In the same period, the net liability rate of Evergrande was only 43.3%, which is in a relatively low level in the industry.

The proportion of projects started reaches 92%

According to the data in the interim report, the proportion of Evergrande s projects started reaches 92%, with the area under construction accounting for 32% of the total land reserve. In the news conference, Hui Ka Yan, Chairman of the Board of Directors of Evergrande, said that Evergrande at present insisted on the fast development, fast sales, and sales at low prices for each project, showing the following four characteristics: I.

Evergrande makes the fast development once the land is obtained; II. Among the 72.38 million square meters of land reserve of Evergrande, 23.06 million square meters are under construction, which ranks No. 1 in the country, accounting for 32% of the total land reserve; III. Evergrande makes the fast sales, with the sales area of the first half year ranking No.

1 in the country; IV. Evergrande makes the large-scale sales at low prices. In the first half year, the average selling price of Evergrande was 5,192 yuan/square meter. Houses from each project are available for sale in four seasons. Evergrande never hoards houses for speculation.