International Finance 2010-7-13 Cheng Huijian

Transactions of new houses continue to be inactive while the new policies have continued to influence the real estate market. For most real estate enterprises, it has been impossible to reach the sales target of the whole year, while some enterprise unexpectedly adjusted the target of the whole year to a higher level to a large extent in this situation. It appears that the market resources are flowing to enterprises with strategic insight when real estate is changing from extensive operation to meticulous operation. The watershed of China real estate enterprises appears.

On Jul. 12, Evergrande Real Estate Group released the sales data of Jun. in Hong Kong, and announced at the same time that the sales target of the whole year would be adjusted to 40 billion yuan, over 30% than the former one. Evergrande thus became the only leading enterprise which adjusted the sales target in adverse market. Estimated data of listed leading real estate enterprises released so far indicates that more than 80% of the enterprises fail to complete 50% of the sales target of the whole year.

The confidence of Evergrande does not only come from the sales performance but also comes from the cash in hand. The monthly net increase of cash balance provides Evergrande a situation of stable operation. The released data also indicated that the cash balance of Evergrande Real Estate had been 21.04 billion HKD by Jun. 30, 2010, hitting the highest level since Evergrande was listed. The balance is 4.68 billion yuan more than that of Dec. 2009, with an increase of 28.6%.