With the Net Profit up to 11.8 Billion Yuan in 2011, Evergrande Becomes the Most Lucrative Real Estate Enterprise in China
BEIJING, March 28, 2012 /PRNewswire-Asia/ — On March 28, Evergrande released the 2011 annual report in Hong Kong. According to the data, in 2011, Evergrande achieved the annual turnover of 61.92 billion yuan, ranking first among the Mainland real estate enterprises in Hong Kong, with an increase of 35.2% on a year-on-year basis, and achieved the total asset amount of 179.02 billion yuan, with an increase of 71.4% on a year-on-year basis. An original report from Sina Leju follows:
Moreover, Evergrande achieved the full-year net profit of 11.78 billion yuan, with an increase of 46.9% on a year-on-year basis, higher than that of Vanke again. Among the leading real estate enterprises in China, Evergrande ranked in the last place in term of core business profit rate, but “went for quantity” by means of small profits but quick turnover. Evergrande, with extremely high market acceptance, created high profit with the lowest profit rate.
Compared to the annual reports of leading real estate enterprises in China, it is observed that the root cause for Evergrande to keep high growth for many consecutive years is clear orientation, small profits but quick turnover and the development mode adapting to the current market and policy orientation.
Under the adverse market environment in the past year, Evergrande still kept substantial growth, and achieved the full-year accumulated sales volume of 80.39 billion yuan, with an increase of 59.4% on a year-on-year basis. It achieved the sales area of 12.199 million square meters, with an increase of 54.7% on a year-on-year basis, ranking first in China. It achieved the target completion percentage of 114.8%, ranking first throughout the country. According to Hui Ka Yan, Chairman of the Board of Directors of Evergrande, at the sales performance news conference in Hong Kong on January 16, “After the high-speed growth, Evergrande has become a 100 billion yuan magnitude enterprise, and will step into a steady growth period in the future development.”
After Evergrande was selected into MSCI Index at the end of 2010, in 2011, Citibank and Deutsche Bank identified Evergrande as one of the preferred Mainland real estate stocks, and Standard Chartered Bank, Goldman Sachs Bank and DBS Bank offered Evergrande the Buy rate respectively. In 2012, Evergrande was listed as direct-management client at general bank level and core client by many domestic banks, so that it can enjoy the treatment equal to that of large-scale central enterprises, becoming the domestic first and sole private enterprise of mixed ownership which obtains the highest grade evaluation of banks.
Meanwhile, due to the current PE estimated value of Evergrande lower than the industrial level, according to the analysis of investment banks, the stock price of Evergrande in the future still has great growth potential. Calculated by the closing price of HKD 4.12 at the fourth week of March, the PE estimated value of Evergrande was only 4.4, but the PE estimated value of enterprises in the same industry was generally 10-15. The high growth of sales performance of Evergrande has been recognized by the stock market. Since April 2011 when Evergrande created a new high of HKD 4.96 for the first time, the stock price of Evergrande has been constantly refreshing the highest record. Compared to the increase in the maximum value and minimum value of Hang Seng Index in the corresponding period which was 32.4%, the increase of Evergrande’s stock price was up to 1.79 times.
By virtue of the forward-looking strategic layout, the high-turnover operation mode, the clear product orientation, the high-cost-effectiveness products and other advantages, since the listing in 2009, Evergrande has overfulfilled the sales target for three consecutive years, and won the championship in term of national sales area for three consecutive years. As the real estate enterprise which covers the most provincial capital cities and has the largest area under construction in China at present, Evergrande has been fully recognized by the industry in terms of growth, scale and profitability.
SOURCE Sina Leju