On August 28th, Chinese Evergrande (HK.3333) released 2017 annual performance in the first half year and several core indicators took the lead in the industry. The first half year of turnover reached 187.98 billion yuan, an increase of 114.8% on year-on-year basis; net profit of 23.13 billion yuan, an increase of 224% on year-on-year basis; as of June 30th, the company's total assets amounted to 1,493 billion yuan. While significant increase in performance, Evergrande fell half of the net debt ratio sharply in the first half year.

Earlier this year, Evergrande launched strategic transformation, proposed to implement the transformation of development strategy and development model firmly. For the development strategy, "scale" development strategy was transformed into "scale plus benefit" development strategy; for the development mode, the previous  "three high and one low" mode-high debt, leverage, turnover and low cost was changed into “three low and one high” -- low cost, debt and leverage and high turnover. Evergrande this time submitted its best ever semi-annual report, reflecting the remarkable results of its strategic transformation.

Evergrande CEO Xia Haijun and other senior leaders attended this press conference

The semi-annual report showed that, in addition to sharp increase of net profit 23.1 billion yuan, Evergrande achieved the core business profit of 27.3 million yuan in the first half, an increase of 249.6% on year-on-year basis. Shareholder profits of 18.83 billion yuan increases 832% on year-on-year basis. The rate of return from shareholders was 51.8%, an increase of 43.6% on year-on-year basis. Each profit index had reached a record high since listing.

In order to further reduce the debt ratio, Evergrande would implement three measures. The first was to plan negative growth of land reserve in the next three years, namely, land reserve would decline 5%-10% annually. Second, Evergrande real estate planned to introduce strategic investors for the third time and to raise funds about 30 to 50 billion yuan. Third, Evergrande would further reduce cost, improve product quality, increase value added of products, enhance profitability, and increase net assets.

Evergrande firmly implements strategic transformation. Namely, "scale" development strategy was transformed into "scale plus benefit" development strategy; the previous  "three high and one low" mode-high debt, leverage, turnover and low cost was changed into “three low and one high” -- low cost, debt and leverage and high turnover. Evergrande believed the transformation would further enhance the quality, prevent risks and achieve sustainable and stable development.

China Evergrande 2017 semi-annual performance press conference scene