BEIJING, July 11, 2011 /PRNewswire-Asia/ -- Despite the constant macro-control and monetary tightening policies in China's real estate market in 2011, Evergrande, a domestically leading real estate enterprise, has achieved good momentum of steady growth due to its deep development in second- and third-tier cities. On July 11, Evergrande (3333.HK) released its sales performance in Hong Kong. Evergrande achieved the single-month sales volume of 8.59 billion yuan (RMB, the same below), and the sales area of 1.253 million square meters in June, with an increase of 79% and 55.6% respectively on a year-on-year basis. Thus, Evergrande achieved the sales volume of 42.32 billion yuan and the sales area of 6.117 million square meters in January through June, with an increase of 101.7% and 83.2% respectively compared to that in the same period of 2010. Evergrande ranked first among the domestic real estate enterprises in terms of sales area, and also ranked first in Mainland real estate enterprises listed in Hong Kong in terms of sales growth rate. In addition, compared to the full-year sales target of 70 billion, Evergrande has completed 60.5% of the full-year target in the first half of the year. An original report from Sina Leju follows:
All the enterprises with good growth in the first half of the year are considered to have a universal commonality, i.e. they all keep the business model of high turnover under the broad environment where the real estate market controlled by the government tends to be normalized. It is reported that Evergrande newly launched 33 projects in the first half of the year. Hui Ka Yan, Chairman of the Board of Directors of Evergrande Group, also revealed previously that in the second half of the year, Evergrande would newly launch 11 or 12 projects every month on average. Such project-launching speed will effectively guarantee the sustained month-on-month and year-on-year sales growth of Evergrande in the second half of the year, and will contribute to the achievement of the full-year sales target of 100 billion yuan. Based on the positive sales momentum and the confidence of capital markets in Evergrande, the stock market of Evergrande has been going up constantly since July. On July 11 when Evergrande released its sales performance, the stock price rose to HKD 6.27, with an increase of 7.87% on that day, and Evergrande created a new high again since its listing. Thus, the aggregate market value of Evergrande has been up to HKD 91.5 million.
In addition, the intensive development in the third-tier cities has brought good sales performance for Evergrande. It is reported that Evergrande newly launched 11 projects in June, among which, 7 projects are located in third-tier cities. Up to now, Evergrande has had 89 projects on sale, among which, 33 projects are located in third-tier cities; the total sales volume of newly launched projects in the first half of the year is 12.26 billion yuan, and the sales volume of projects in third-tier cities is 7.41 billion yuan, accounting for 60.4%. Among the sales volume of 42.32 billion yuan of Evergrande in the first half of the year, the sales volume of projects in third-tier cities is 12.81 billion yuan, accounting for 30.3%.
In addition to the high-speed growth, Evergrande has adhered to the strategy of steady operation and kept the abundant cash flow in the face of the increasingly monetary tightening financial environment. By June 28, 2011, Evergrande had had the cash balance of HKD 33.24 billion, and plus the unused bank credit line of HKD 40.67 billion, the total available cash had been HKD 73.91 billion. According to the insiders, cash flow will become the standard to measure the strength of developers in the future, and will also decide the depth and width of nationwide development of real estate enterprises in the future. The abundant cash flow of Evergrande has created the solid capital backup force for its nationwide development.
It is estimated by the insiders that after over-fulfillment of the half-year target, there will be no suspense that Evergrande will complete the full-year target of 70 billion yuan smoothly in advance, and to enter into the 100-billion club might become the new annual target of Evergrande.
