On August 31, Evergrande Real Estate (HK.3333), a target stock of Shanghai-Hong Kong Stock Connect, released its 2015 interim results in Hong Kong. Despite the overall downturn of the real estate market, the performance of Evergrande has been improving year by year, with several key indicators such as total assets and cash balance ranked first in China.

The announcement data shows that in the first half of 2015, both its net profits and profits from key business hit a record high compared to corresponding historical periods, and exceeded 10 billion yuan within just half a year, which took the lead in the industry. Net profits amounted to 13.29 billion yuan, representing a year-on-year increase of 40%, while the profits from key business amounted to 10.16 billion yuan, representing a year-on-year increase of 56.5%, and both growth rates ranked first in China. In addition, the key business profit margin was 13.1%, representing a year-on-year increase of 2.8%; turnover was 77.74 billion yuan, representing a year-on-year increase of 22.7%.


Scene of the 2015 Interim Results Release Conference. In the middle is Hui Ka Yan, Chairman of the Board, on the right is Xia Haijun, Vice Chairman of the Board and President, and on the left is Xie Huihua, CFO and Executive Director.

Evergrande continues to rank first in China in terms of scale. As at June 30, Evergrande had established its presence in 154 cities in China, with a total of 335 projects, and total assets of 539.85 billion yuan, which ranked first in China, with a 13.8% increase compared to the end of 2014.

In the first half of 2015, Evergrande experienced an increase in both its trading volume and prices, while the amount of sales, area sold and average selling price all hit a record high. The contractual amount of sales was 87.11 billion yuan, representing a year-on-year increase of 25.7%; contractual area sold was 113.78 billion, representing a year-on-year increase of 16.1%, making Evergrande the only real estate company in China with an area sold exceeding 10 million square meters; average selling price was 7656 yuan/square meter, representing a year-on-year increase of 8.2%.

The rapid profit growth has brought about abundant cash flows for Evergrande. By the end of the first half of this year, Evergrande had a cash balance of 81.57 billion yuan, which ranked first in the industry, with unused banking facilities of 134.2 billion yuan, and available funds of 215.77 billion yuan.

At the Results Release Conference in Hong Kong, Board Chairman Hui Ka Yan emphasized that:"When the market is bad, the capabilities of Evergrande become more apparent. When the market is bad and the performance of many companies is deteriorating, there is significant year-on-year growth in various data of Evergrande, which shows the five advantages of Evergrande, i.e. high product quality, strong capabilities of cost control, orientation of product lines towards rigid demand, quick development capabilities and delivery of all houses with fine decoration. This is also why Evergrande is able to guarantee a refund without reasons, and shows the high competitiveness of the company."


Scene of the Results Release Conference

Relevant data shows that Evergrande has maintained year-by-year healthy and rapid growth from its listing in 2009 to 2014: the contractual amount of sales increased from 30.3 billion yuan to 131.5 billion yuan, contractual average selling price increased from 5375 yuan/square meter to 7227 yuan/square meter, net profits increased from 1.12 billion yuan to 18.02 billion yuan, profits from key business increased from 290 million yuan to 12.04 billion yuan, and cash balance increased from 14.38 billion yuan to 59.5 billion yuan. In the first half of 2015, various indicators of Evergrande continued to maintain a rapid growth.

At the Release Conference, Chairman Hui Ka Yan said that a few years ago, Evergrande had pointed out the need to build a solid foundation, and clearly required that healthy and rapid development should be maintained for the primary business of the company, which is real estate, at the level of strategic decision-making. Development is of overriding importance. Ever since its listing, Evergrande has maintained an annual growth of about 30%, and expects to continue to maintain an average annual growth of about 30% in various indicators in the next five years.

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