Outperforming the market, Evergrande achieves growth both on link relative ratio and year-to-year growth
BEIJING, July 12 /PRNewswire-Asia/ -- The sales presentation for June released by Evergrande Real Estate in Hong Kong on June 12th showed that in spite of the market downturn, the Company continued to keep a monthly growth on performance in June, and achieved sales growth both on link relative ratio and year-to-year growth.
An original report from Sina Leju assesses the situation as follows:
The presentation showed that Evergrande achieved a contract sales of RMB 4.8 billion in June 2010, with a growth of 26.6% compared to that of RMB 3.79 billion in the same period of 2009, which created the highest sales amount in a single month this year; the contract sales area was 806,000 square meters with a growth of 1.9% compared to that of 791,000 square meters in the same period of 2009; the contract sales average price was RMB 5,952 per square meter with a growth of 24.2% compared to that of RMB 4,791 per square meter in the same period of 2009. Under the harsh macroeconomic regulatory environment, the contract sales link relative ratio of Evergrande in June 2010 increased by 18.5% compared to that of RMB 4.05 billion in May, and the contract sales area link relative ratio increased by 25.9% compared to that of 640,000 square meters in May.
Moving Against Adverse Market Conditions, Evergrande Raised Annual Sales Target Again
In June, Evergrande continued its sales policies from May, and set a record for the highest sales in a single month this year again under the fluctuating market conditions of macroeconomic regulation and control. According to statistics, Evergrande accumulatively had completed more than 58% of RMB 36 billion of the annual contract sales planned originally. Industry insiders said that Evergrande was the only leading enterprise to over-fulfill the intended targets at the beginning of the year.
It is noteworthy that Evergrande announced that it raised the annual sales target by 30% on July 12th, that is, more than RMB 40 billion. Evergrande is now the only current leading enterprise to raise the sales target in adverse market conditions.
As of June 30th, 2010, the cash balance of the Group was HKD 21.04 billion, hitting its highest level since the Group was listed.
Stable growth, success based on unique strategy
Analysts believed that the reason why Evergrande achieved high-speed and stable growth in the first half-year under the market downturn was mainly because it relied on its high product quality and low cost to win the recognition of the market -- a direct result of its advanced strategic plan.
An industry insider having a good knowledge of Evergrande's operations said that Evergrande's high performance in adverse market conditions was also a benefit of its scale strategy, to which Evergrande has attached great importance. Specifically, from the beginning of land purchase, Evergrande selects large-area projects in beautiful environments, completes supporting facilities and low land costs to carry out high-speed scale development and large-area city construction. "Evergrande's scale development is favorable to reduce the development cost of the project, improve the entire image of the city and promote the progress of urbanization," said this insider.
In addition, Evergrande has successfully applied brand strategy and management strategy. For brand strategy, Evergrande has put forward the strategy of creating competitive products with expansion throughout China to constantly achieve product upgrades, and has established strategic alliances with more than 300 well-known enterprises in China and overseas for planning design, primary construction, landscape support facilities, decoration materials and equipment, property management and other industry services to achieve the highest product quality, the best brand and the highest cost performance among the same type of products. For management strategy, Evergrande's intensive collectivized management mode, standardized operation mode and concentrated binding and tendering, and the supply mode of centralized purchase and delivery of materials and equipment ensure the company's efficient operations and control the cost of the project development.
The information shows that Evergrande has successively achieved a number of overseas financing after successfully listing in Hong Kong, of which the international financing amount in the first half-year reached USD 1.35 billion. This timely overseas capital has set a solid foundation for Evergrande's response to the capital market in China and overseas and the adjustment of the real estate market with continuous and stable operations and expansion during adverse market conditions. At the same time, Evergrande adheres to the principles based on cash, and keeps sufficient cash balance every month to ensure the company's strong anti-risk capability, stable operations and sustainable development.
