In the first 10 months this year, Evergrande (3333) had powerful sales performance, and had overachieved the full-year contracted sales target of 40 billion yuan (RMB, the same below), with the recorded contracted sales volume of over 41.1 billion yuan, an increase of 74% on a year-on-year basis. According to Chairman Hui Ka Yan, the contracted sales volume this year is expected to be 50 billion yuan, and the sales target next year is expected to increase by 20%-30% on the basis of the target this year, namely, at least 60 billion yuan.

Meanwhile, the contracted sales volume of Evergrande in October set a new record again in terms of single-month sales performance this year, which was 5.56 billion yuan, an increase of 9.84 times on a year-on-year basis; the sales area was 890,000 square meters, an increase of 9.5 times on a year-on-year basis.

Sales Volume in October Had an Increase of 9.84 Times

At present, there are 52 projects on sale in total. Mr. Hui Ka Yan said, there will be more than 10 projects to be launched within the year. It’s believed that there will be more than 60 projects on sales by the end of the year. He added that the Company expects that there will be 130-150 projects on sale next year.

The Company launched 4 new properties in the market in October, among which, 3 are located in the third-tier cities, non-provincial capitals. According to Mr. Xia Haijun, Vice-chairman and CEO of Evergrande, there will still be quantities of projects to be launched in the third-tier cities, which will become the important regions for the turnover and profit growth of the Company.

He explained that the Company has expanded the development of projects in the third-tier cities, not because the house demand of the second-tier cities has been saturated, but because the demand of the third-tier cities has been stronger and stronger. Mr. Xia added that 90% of the third-tier cities where we move to have not been developed by other large-scale developers. Therefore, the business opportunity is relatively great.

Cash Flow Up to 20 Billion Yuan

For the issue whether the Company will continue the discount policy to promote the sales of properties, Mr. Hui Ka Yan said, the development strategies in the future will depend on the market changes. But he also said, the average selling price of the projects located in the third-tier cities will not be too low, mainly because of the superior locations.

Mr. Hui Ka Yan added that at present, the cash flow of the Company is abundant, which is over 20 billion yuan in most cases, and never less than 15 billion yuan. It’s believed that in the short term or even within three years, there will no financing plans of share placement or bond issuance.

According to the report released by Goldman Sachs yesterday, Goldman Sachs increased the target price of Evergrande from 5.08 HKD to 5.93 HKD, and reiterated the Buy rating for Evergrande. According to Goldman Sachs, the excellent sales performance of Evergrande in the first 10 months this year has boosted the confidence of the market; it is expected the contracted sales volume of Evergrande in the first quarter next year will be up to 20 billion yuan.