Sohu Finance 2010-5-17 Xiaoding

Sohu Finance Message: Since a series of new polices on real estate market unveiled, the vast majority of developers have been silent and waiting, and the housing price has not been substantially affected. However, Evergrande Real Estate Group took the lead in responding to the new policies on real estate market from the government, and started to sell the houses at a discount of 15% in about 40 regions in the whole country on May 5.Xia Haijun, the vice chairman of the Board of Directors and the president of Evergrande Real Estate Group, said, “Since the new polices unveiled, there has not been very obvious decline in the achievements of Evergrande, and the sales volume of these ten days after the discounted sales has an increase of several times.” But Xia Haijun didn’t identify the sales data.

In the opening ceremony of Evergrande Town in Hefei, Anhui on May 16, Xia Haijun said, “The reason for the release of 15% discount sales plan was that we recognized the housing price started to enter into a decline cycle after the new polices on real estate market unveiled, and we decided to make the discount for the purpose of seizing the upper hand.” Meanwhile, Xia Haijun denied the point from the market that “The reason for Evergande’s price reduction was its obviously sufficient cash flow”. “I can clearly tell you that by the end of April, Evergrande had the cash flow over 20 billion Hong Kong dollars, and Evergande’s price reduction was absolutely unrelated to cash flow.” emphasized Xia Haijun.

For the forecast of the company’s achievements in 2010, Xia Haijun said, “We expect the sales volume of 2010 would increase by 20%-30% compared to that of 2009. The sales volume of 2009 was 30.3 billion yuan, and the sales volume of 2010 is expected to be 36 billion yuan. The sales volume of the current quarter is expected to be over 8 billion yuan.”

It was reported by Sohu Finance that the current discounted promotion plan of Evergrande Real Estate Group was selling all the Evergrande’s houses in the whole country at a discount of 15%, but Xia Haijun didn’t give the clear answer to the preferential period. “We will decide whether to continue the discounted sales according to the market situation until the completion of this 15% discounted preference at the end of this month.” said Xia Haijun.

The future development of Evergrande would possibly focus more on the second- and third- tier cities, and Xia Haijun said Evergrande would not rashly enter into the first-tier cities like Beijing and Shanghai where the housing price was sky-high. “We would not rashly enter into the first-tier cities until the low-price has enough temptation and we can have enough profit margins.”