On Dec. 8, Evergrande Real Estate (3333.HK) released the performance in Hong Kong. The Company realized the contracted sales amount of 6.56 billion yuan in November, with an increase of 18% on a month-on-month basis, hitting a new high again in the year. The accumulative contracted sales amount of the Company from January to November reached 47.72 billion yuan and the contracted sales area reached 7.563 million square meters, respectively increasing by 81.7% and 51.8% on a year-on-year basis. It is predicted by insiders that the sales amount of Evergrande Real Estate of this whole year will exceed 50 billion yuan.

The sales amounts of Evergrande in several areas have substantially increased in November on a month-on-month basis. For example, the sales amounts in Xi’an, Nanchang, Chongqing, and Jinan respectively increased by 140.5%, 89.2%, 55%, and 36.1%. In November, Evergrande newly launched four projects to the market. At present, the number of projects on sale reaches 56, among which, the number of projects launched to the third-tier market in cities that are not provincial capitals reaches four, showing that the contribution rate of third-tier cities is gradually increasing.

Insiders hold the opinion that Evergrande’s increase in performance is due to its strategic layout in second- and third-tier cities. Compared with the high pressure caused by regulations and controls faced by first-tier cities this year, the urbanization development in second- and third-tier cities, especially in third-tier cities, is providing huge space for the growth of real estate development and also arousing great rigid demand at the same time. At present, Evergrande is the developer which has developed projects in the largest number of provincial capitals.

The two times of regulation and control since the end of October have tested again the cash flow strength of developers. As for this issue, Evergrande said, after the Company was listed, its cash flow had been guaranteed more than 20 billion yuan in most cases and had never been lower than 15 billion yuan at a minimum. (Reported by Journalist Lin Zhe)