On March 30th, Evergrande Real Estate (HK.3333) published 2014 performance report in HK. This report revealed that 10 core indexes in 2014 such as gross assets, business volume, area under construction, completed area and so on took the first place in China.

”For the sales target of 150 billion Yuan, Chairman Hui Ka Yan said at the conference held in HK: “Evergrande has fulfilled its annual targets for years. We are especially confident that we will fulfill half of the target in the first half of this year.”

2014 performance report conference, Chairman Hui Ka Yan in the middle, Deputy Chairman and President Xia Haijun on the right, CFO and Executive Director Xie Huihua on the left

First place in 10 core indexes

Evergrande annual report revealed that its 10 core indexes in 2014 took the first place in China. Among which, gross assets amounted to 474.5 billion Yuan, with year-on-year growth of 36.3%, took the first place of real estate company in HK; business volume amounted to 111.4 billion Yuan, took the first place in China; net profit amounted to 18 billion Yuan, reached a new record, with year-on-year growth of 31.4%, taking the first place in China; the rate of return for shareholders 25.3%, occupied the first place in China; sales volume 131.5 billion Yuan, with year-on-year growth of 31%, fulfilled 119.6% of year target, occupied the first place in China; area under construction 413,500,000,000 square meters, occupied the first place in China; completed area 206,300,000,000 square meters, occupied the first place in China; entering 147 cities, its city coverage took the first place in China; cash reverse increased by 10.8% to 59.5 billion Yuan compared with the same period last year, occupied the first place in China; brand value 29.186 billion Yuan, occupied the first place in China.

Market participants thought that most of Evergrande projects were located in area with exuberant rigid demand or central place of the cities, which met requirements of people’s livehood and with high growth potential. Evergrande mastered the market window phase and stood out with its high cost performance products meeting rigid demands and.its precise marketing strategy fluctuating along with market changes.

Chairman Hui Ka Yan answering reporters’ questions

6-year continuous increase in core indexes

Data revealed that from its listing in2009 to 2014, total sales volume increased to 131.5 billion Yuan from 30.3 billion Yuan, with average annual increase 66.8%; net profit increased to 18 billion Yuan from 1.12 billion Yuan, with average annual increase 301.8%; core net profit increased to 12 billion Yuan from 0.29 billion Yuan, with average annual increase 810.3%; land reserve increased to 147,000,000 square meters from 55,000,000 square meters, with average annual increase 33.5%.

Meanwhile, Evergrande’s average annual increase of construction area by the end of the year was 30%, average annual increase of project under construction was 113.7%, average annual increase of newly constructed area was 22.2% and average annual increase of completed area was 30%.

Insider thought that the listing period and real estate policy control period almost kept the same pace. 6-year continuous increase under this industry environment presented its real strength.

When Evergrande obtained good results in real estate, it also made breakthroughs in industrial expansion. Since 2013, Evergrande appointed more than 1100 persons, set up various professional research teams. After more than 1-year research and analysis, Evergrande decided to enter mineral water, grain and oil, milk and health industry.

Evergrande 2014 performance conference

Prediction optimistic to Evergrande for stable finance condition

As capital-intensive industry, with aggravation of survival of the fittest, stable financial condition is not only an important index for powerful real estate companies, but also significant guarantee for quick development.

The annual report revealed that Evergrande’s cash reserve increased by 10.8% to 59.5 billion Yuan compared with the same period last year, with available cash 110.5 billion Yuan, occupied the first place in real estate industry.

Meanwhile, Evergrande has paid land funds 195.55 billion Yuan, occupies 90% of gross land funds, with payable land funds remained 10% that is 24.46 billion Yuan, reduced by 57.2% compared with end 2013.

Large financial organizations are in favor of Evergrande due to its stable development. In the first quarter of this year, Large-scale financial organizations including Bank of China, China Agricultural Bank, Postal Savings Bank of China, China Minsheng Bank, China Citic Bank have signed strategic cooperation agreements with Evergrande successively.

As a Shanghai and HK underlying stock, Evergrande stock has been increasing sharply, but the price earnings ratio is only 3 to 4 times. Securities analysts introduce that Evergrande’s real estate section has been always the price depression. The average price earnings ratio of HK real estate stock is only 5 times, which has a great difference with 10-time price earnings ratio of A share.

Haitong International also published report, indicating that Evergrande’s contract sale had a year-on-year growth of 31%, and the quick increase made Evergrande’s “Buy” rating re-declared.