Dramatic 50% Increase in Net Profits Gives Evergrande a Rosy Outlook
BEIJING, March 29, 2012 /PRNewswire-Asia/ — Evergrande has released its 2011 results, which include 11.38 billion yuan of net profits, up 49.9% from 2010 and equal to a per share profit of 0.7671 yuan. The planned distribution is 19 fen per share, up 49.8%. The better than expected results have impressed investment banks, including Citibank and Credit Suisse, which have all raised the target price of Evergrande. Hui Ka Yan, chairman of Evergrande, is upbeat about the prospects of his company, predicting that the selling price of its properties would rise this year and noted that he is confident that the 2012 sales target of 80 billion yuan will be reached. An original report from Sina Leju follows:
According to company records, Evergrande, which started its business operations in 1997, has gone through 5 three-year plans and also achieved rapid growth in sales and total assets. Sales increased from 2.1 billion yuan in 2005 to 80.4 billion yuan in 2011. Total assets grew from 6.1 billion yuan in 2005 to 179.02 billion yuan in 2011, a year-on-year growth of 71.4%. Total assets in 2010 amounted to 104.45 billion yuan.
According to the performance report, by December 31, 2011, the amount of cash on hand reached 28.2 billion yuan, up 41.4%. There are also 36.91 billion yuan in bank credit lines that have not yet been used, amounting to 65.11 billion yuan of funds that can be utilized in total, up 11.9 billion yuan from the same period in 2010.
“The net debt ratio of Evergrande in the second half of 2011 fell considerably by 7.9% from the first half. This plus the 65.11 billion yuan of funds available ensures the stability and sustainability of the development of Evergrande,” noted Hui.
Evergrande’s performance has resulted in positive response from leading investment banks. Pointing out that the earnings of Evergrande in the last year are in line with expectations, Credit Suisse believes that the sales target of 80 billion yuan for this year will also be reached and has slightly raised its target price from 5.1 yuan to 5.2 yuan, maintaining its “outperforming the market” rating. Citibank has lifted the target price of Evergrande from 6.01 yuan to 6.23 yuan and gives it a rating of “Buy In”; Lyon Bank has moved up the target price of Evergrande from 3.5 yuan to 4.3 yuan.
Evergrande has maintained its growth and is expected to have 58 billion yuan of capital expenditures in 2012, including 5 ~ 6 billion yuan that will be used to purchase new land. By last year, the land reserves of Evergrande totaled 137 million m2, up 42.5% from 2010. The average cost of land in the reserves was 616 yuan/m2 while the area of the projects under construction at the end of the year was approximately 3,652.4 million m2. Currently, Evergrande has 187 property projects that are distributed throughout 103 cities across China.
SOURCE Sina Leju