Site Situation of News Conference on the Sales Performance of Evergrande in January 2011

Host: Good afternoon, friends from the press circles. First of all, welcome to attend the news conference on the sales performance of Evergrande Real Estate Group in January 2011. Now please Dr. Xia Haijun, Vice-chairman of the Board of Directors and President, introduce the contracted sales of Evergrande in January 2011.

President Xia Haijun: In January 2011, the Group achieved the contracted sales amount of 9.79 billion yuan, and the contracted sales area of 1.408 million square meters, with an increase of 181.6% and 139.9% respectively on a year-on-year basis. Although the government controls the market constantly, we still have the capacity to manage the risk of the control, and obtained a good start in 2011. We are full of confidence in completing the full-year sales target of 70 billion yuan.
In January, the Group newly launched 5 projects, 3 of which are located in the third-tier cities, including Baotou, Danzhou and Liuyang. In the whole month, the total sales amount was 1.42 billion yuan, an outstanding market performance. We have effectively developed the markets in the second- and third-tier cities, and at the same time avoided the risk of macro-control in China, enabling us to grow steadily under the national macro-control.
Faced with three controls and long-term adverse market environment, we took the lead in adopting the forward-looking promotion strategy, and have always kept strong growth in the sales amount, showing powerful team executive force and super-high cost effectiveness of competitive products.

Host: Thank you, President Xia. Next, it is the question time.

Hong Kong Apple Daily: At the end of January, the central government introduced a new policy. Does the policy have any impact on the sales of your Company in the second- and third-tier cities? Is there any change in the plan this year?
President Xia Haijun: Firstly, we can see from the sales data that the sales amount of Evergrande of nearly 10 billion yuan increased by 181% compared to that last year. Accordingly, in our opinion, there will be good growth in the following few months. This can also indicate that the target set by us Evergrande is strategic and forward-looking.
Secondly, we have basically completed the layout in the second-tier provincial capitals. In our view, the developed prefectural-level cities surrounding each provincial capital will be the third-tier cities we focus on.

Hong Kong Wen Wei Po: Will the full-year target of 70 billion yuan be increased since the sales amount in January was nearly 10 billion yuan? You will focus on the third-tier cities this year, so will the average selling price be a little lower than that last year?
President Xia Haijun: There is a huge space between 10 billion yuan and 70 billion yuan, and we have no plan to increase the target now. The unit price this year will not be lower than that last year. On one hand, the projects in the third-tier cities have superior geographic positions, less than 6km away from the cities, and the rigid demand in the third-tier cities is very strong. Therefore, the gap between the unit price of projects in the third-tier cities and the unit price of projects in the second-tier cities will not be too far. On the other hand, in addition to the third-tier cities, the second-tier cities will continue to make contributions. Phase II and Phase III of these projects will be developed and sold successively, and we will keep the average price stable.

Hong Kong Commercial Radio: There is financial strain in most of the real estate enterprises this year are relatively nervous, but Evergrande has abundant capitals. Then, is there greater advantage for the expansion of Evergrande?
President Xia Haijun: Since being listed, Evergrande has always kept financial soundness, and this is our primary goal. The land reserve had an great increase last year, but for Evergrande, a real estate company with the annual sales amount of 50 billion yuan, this growth is not great enough. In our opinion, the annual increase of land reserve will be controlled within a reasonable range, enabling our financial index always in a steady status. The Company will purchase lands over the index when doing anything. In case of a very good project, the Company will get well prepared in advance.

Hong Kong Ming Pao Daily: There is rumor in the market that you will issue convertible bonds. Is that true?
President Xia Haijun: I have also heard of the rumor. I felt very strange when some investors once asked me. Firstly, at present, the Company has abundant capitals, and the share price is so low. It is impossible for us to issue convertible bonds. Secondly, we are disgusted with those who distribute irresponsible information for individual purposes. I hope at the news conference, we can make it clear that the Company will impossibly issue convertible bonds in a short time.

Hong Kong Sing Tao Daily: Evergrande entered into the third-tier cities last year. According to the experience of Evergrande, How much is the approximate annual increase of real estate price in the third-tier cities?
President Xia Haijun: The third-tier cities are the markets where the majority of real estate developers in China have not entered. Our forward layout has the guide significance. The price set by Evergrande in the city will lay the foundation for the basic price of the city. Therefore, it is difficult to make statistics how much the increase is. However, I believe in the future two or three years, there will be many developers following the step of Evergrande to enter into the third-tier cities.