Jiayin Xu: The affection of failure in going public is far beyond that of the financial crisis.
Source: Oriental Morning Post   Journalist: Xiuhao Liu

On July 10th, Jiayin Xu, Chairman of Evergrande, invited many celebrities and met more than 100 domestic media in the newly-opened hotel of Evergrande and announced in high profile that they had successfully passed the toughest period, they planned to fulfill the yearly goal in sales of 30 billion Yuan and the restart of IPO was just a matter of time.

A Party of Main Investment Banks

On July 10th, Jiayin Xu made the opening ceremony of a newly-built hotel in Guangzhou into a big-show. Apart from the routine style at each opening ceremony of a project by inviting super star such as Jackie Chan, they invited , to the ceremony, all the partners in real estate industry such as Yutong Zheng, chairman of New World Development Co., Ltd., who all presented at the ceremony under the sun.

Although a clear time table for going public is not provided, the collective presentation of management of many investment banks on that day had given us enough hint. The representatives present included representatives from BOC International (China) Limited, ICBC International (China) Limited, Temasek Holdings, CarVal Investors, Kuwait Investment Authority and Shikumen Capital Management Co. Ltd and many members from the banks for recommendation such as Merrill Lynch, Goldman Sachs and Credit Suisse.

Merrill Lynch, the biggest equity investor of Evergrande, will organize a review tour of the products of domestic real estate enterprises, including many projects under the name of Evergrande, on July 15 to 17.

During the sequential meeting of communication, Xu was obviously prepared for the question of going public. “IPO is not an issue decided by us but by the international capital market. We may restart it once the conditions of capital market are ripe. In addition, it is easy for Evergrande to restart IPO. I believe it is only a matter of time.”

Fulfill the Goal of more than 30 Billion in Sales this Year

It has been more than a year since last March when the plan of Evergrande of going public in HK was delayed. On that day, Jiayin Xu admitted for the first time that the strike of the failure in going public was “far beyond the affection of the consequential global economic crisis.”

Evergrande announced that the plan of going public stopped on 19:00H of March 20th, 2008. In order to fill the gap of more than 10 billion Yuan, Xu transferred 16% of the group’s shares into private offered 506 million USD, which was equal to small-size IPO, and sold their products at cost price.

On the 6th day of last July, Evergrande held its working conference of the first half of year. As indicated in the achievements publicized during the conference, they had sold 20285 apartments and houses in the first half of year, with 2.65 million square meters of sales area and 12.7 billion of sales amounts, which makes it the only enterprise of real estate that had not gone public but exceeded 10 billion Yuan in sales in China.

Jiayin Xu announced that Evergrande will increase newly as-built area by 5 million square meters and the yearly as-built area will reach 15 million square meters. They plans to fulfill 18 billion Yuan of sales amount in the second half of this year and the yearly sales amount will exceed 30 billion Yuan.

As for land reservation, they currently hold 46 million square meters of reserved lands and plans to enlarge the total area to about 50 million square meters, which are expected to be maintained in the coming a few years.