Date: July 12th, 2010
Place: Shangri-La Hotel, Hong Kong

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Presider: Hello, everyone. Welcome to the Press Briefing of Evergrande Real Estate Group on its Sales in June 2010. First of all, I would like to introduce the representatives of the management of the Group present today.
     Dr. Xia Haijun, Vice-Chairman of the Board of Directors and President
     Mr. Xie Huihua, Executive Director and CFO
     Mr. Lai Lixin, Executive Director and Vice-President

Lai Lixin: Now I would like to give you an overview of the sales amount of Evergrande in June 2010.
In June 2010, the contracted sales amount of the Group was 4.8 billion yuan, setting the single-month record since 2010. The contracted sales area was 806,000 square meters, and the contracted average sales price was 5952 yuan per square meter. In June, the contracted sales amount of the Group increased by 26.6% compared with that in the same period of 2009. The sales area increased by 1.9% compared with that in the same period of last year, and the average sales price increased by 24.2% compared with that in the same period of last year.
From January to June in 2010, the Group achieved the contracted sales amount of 20.98 billion yuan accumulatively, with the total contracted sales area of 3,339,000 square meters and the contracted average sales price of 6282 yuan per square meter. From January to June in 2010, the contracted sales amount of the Group increased by 104.9% compared with that in the same period of 2009. The sales area increased by 54.7% compared with that in the same period of last year, and the average sales price increased by 32.5% compared with that in the same period of last year. Accumulatively, over 58% of the planned yearly contracted sales amount, which is 36 billion yuan, was achieved.
With the stabilized average sales price, the sales amount tended to increase month by month. In June, in particular, the sales policy extended based on that for May. Under the macro control, another single-month record of sales amount was achieved.
The Group always adheres to the steady management tactics and has been keeping sufficient cash flow since being listed. Up to June 30, 2010, the cash balance of the Group was 21.04 billion Hong Kong dollars, with a net growth of 1.05 billion Hong Kong dollars compared with that in last month, and a sequential growth of 5.3%, which was the highest level since the Group was listed. The cash flow benefits from the foresight of the Group, and from the accurate prediction at the beginning of the year on the tendency of the international capital market and the tendency of the tightened-up monetary policy in the macro control in China. The Group seized two opportunities to issue bonds successfully, adhered to the strategy of 'Cash is the King’ and the product strategy of high cost performance, strengthened the strategic marketing, and achieved the contracted sales amount of 20.98 billion yuan in the first half of the year, fulfilling 58% of the target for the whole year, and continuing to keep a good sales momentum.
Based on a number of factors in the future, the Group decided to adjust the contracted sales target for the whole year of 2010, from an increase of more than 20% than that in 2009 (which was 30.3 billion yuan) to an increase of 30% than that in 2009, i.e. to reaching 40 billion yuan. With our layout in the second and third-tier cities, and through the cost-reducing bidding and the quality control system, we will surely achieve this goal.

Presider: Now it’s time for reporters to ask questions.
Netease Finance: What is your prediction on the tendency of the housing price in the second half of the year? Will Evergrande further adopt the strategy of price reduction ?
Xia Haijun: Evergrande has well predicted the tendency of the real estate industry in China. Therefore, we first adjusted the sales price on May 6, and our sales amount kept increasing in May and June. This relies on the forward-looking judgment and scientific strategic decision of the Group. The excellent sales performance again proves our strong adaptability to the market.
As to the tendency in the second half of the year, judging from the present situations, there is no tendency of adjustment within the near future. The macro-policy is the important factor that affects the price. If all the developers in China, particularly those of the nationwide scale, adopt the active market-oriented pricing strategies, the current situation of the real estate market can be maintained.

Sina.com: Will the second and third-tier cities become the focus of the real estate developers? Does this mean the development tendency of the real estate in the future?
Xia Haijun: The rapid development of Evergrande in recent years is closely related to the strategic planning of the Group. We allocate our limited fund to the second- and third-tier cities where the land price is low and the rigid demand is strong, and have realized the leap-forward development in recent years.
This is because, on one hand, the land price in the second- and third-tier cities is relatively cheap; on the other hand, the living area is small and the living quality is low for the people there. Therefore, these cities should be the main battlefield and direction for the real estate development in China. I believe that those developers of nationwide scale will compete for the second- and third-tier cities in the future.

Guangzhou Daily: What do you think of the present market and its tendency?
Xia Haijun: If the price in the real estate market in China could be stabilized or slightly reduced, including the price adjustment of the overall real estate market, then no new macro-policy would be issued. This is my judgment.
Simply restricting the demands will inevitably hurt the macro-economy in China, because the relevance of the real estate industry is of a large scale. In the long run, the suppression on the real estate market will affect the national macro-economy. The central government has seen this. After the real estate price returns to the reasonable growth, I believe there will be sequential polices, but no suppressing policies at short intervals.

Guandian.cn: What is the progress of the projects in Shanghai? How long will the 15%-discount policy last? Will there be any active marketing strategies in the second half of the year? Thank you.
Xia Haijun: The projects in Shanghai are now in the preparatory stage. The projects will start at an appropriate time. After they start, we will tell you as soon as possible. At present, we have operated in more than 20 provincial capitals. There are Evergrande projects in almost all the provincial capitals with developed economy. We will enter Beijing when appropriate.
Evergrande has a clear strategy regarding the price. That is, we fluctuate in line with the market conditions. No matter how the market adjusts, we always find the price acceptable to the ordinary people from the market development rules. The reason that we adjust our price based on the market discipline is closely related to the strategic layout and the overall strength of the Group. We have large land reserve, and a wide layout in the second- and third-tier cities in China, which enhance our capability against risks.
The strategic objective of the Group is an increase of 20%—30% of the annual total net profit. How to achieve the growth of the total profit depends on the expansion of our total volume in both the high point and low point of the real estate market. If the price in the market rises fast, then the development volume this year will be smaller to ensure the growth of the profit. If the State carries out macro adjustments and controls, then we will increase the sales and expand our market shares, which also ensure the growth of the total profit.

Reporter: Will Evergrande adjust its goal for the whole year? What is the land-purchasing strategy of the Group in the second half of the year?
Xia Haijun: At the beginning of this year, the Group issued the announcement at the SEHK that the sales target for the whole year was an increase of 20% than that in the last year. The target we set then was 36 billion yuan. Judging from the present conditions, with our products of high cost performance launched into the market, we are confident that our 20%-increase target this year can be adjusted to 30%-increase, that is, reaching 40 billion yuan.
Having accumulated sufficient cash through price adjustment, the Group is able to absorb and reserve land under the present conditions. I think 2010 is a good opportunity to expand the land. Through international financing and price adjustment, Evergrande has obtained this development opportunity. By the end of June, the cash balance of the Group was 21 billion yuan. Such large sum of cash is to guarantee that the Group can reserve high-quality land and carry out development mainly in the second- and third-tier cities while maintaining a stable operation. We will disclose the details of our land reserve and project progress to you in our semiannual report.

Southern Metropolis Daily: What is Evergrande’s viewpoint on entering the construction of low-income housing? Do you have plans in this respect?
Xia Haijun: The construction of low-income housing and the relevant guarantee policies have very good considerations and may satisfy the needs of the ordinary people with low- and medium-level incomes for houses, but the construction and development of low-income housing mainly rely on the financial capabilities of the government. As an enterprise focusing on the development of commercial residential buildings, we still regard the commercial residential buildings as our main development direction in the future.
If the government requires developers to assist them to build the low-rent housing and economically affordable housing, Evergrande will be very glad to shoulder its social responsibility and help the government to facilitate the construction in order to achieve the goal of Home Ownership Scheme.

Netease Real Estate: It is said that you have commercial projects in Sanya. Do you plan to put more resources in the commercial projects?
Xia Haijun: The commercial real estate is an important means for the real estate enterprises to keep a steady cash flow. With the economic strength of an enterprise gradually enhanced, the enterprise will increase the proportion of the commercial real estate progressively.
As to Evergrande, we will surely enter the commercial real estate market in the future, but will be very cautious. We will gradually expand the volume of commercial real estate while developing and constructing the existing commodity houses. It will take some time. As to Sanya or other cities in China, we will progressively launch our commercial real estate projects in an effective way under the condition that the cash flow is guaranteed. We will enter the market in Hainan this year, and will continue to expand our influence in Hainan.

Presider: That's the end of the press briefing today.