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Site Record on the Press Conference of Evergrande’s Sales Performance in October 2010

 Date:2010.11.08   Publisher:Evergrande Group

Time: November 8, 2010
        Place: Floor 5, Phase I of Pacific Place, Hong Kong

Vice-president Lai Lixin, the Host: Good afternoon, friends from the media circles. Welcome to attend the press conference of Evergrande Real Estate Group Limited’s sales performance in October 2010. Next, please allow me to introduce the management officers of our Company:
Professor Hui Ka Yan, Chairman of the Board of Directors of Evergrande Real Estate
Dr. Xia Haijun, Vice-chairman of the Board of Directors and President of Evergrande Real Estate
Mr. Xie Huihua, Executive Director and CFO of Evergrande Real Estate
Now, please President Xia introduce the contracted sales performance in October for us.

President Xia Haijun: Nice to see you again. Now please allow me to announce the Group’s sales performance in October 2010 to the media. In October 2010, the Group achieved the contracted sales volume of 5.56 billion yuan, with an increase of 984.5% compared to that of the same period in 2009, which was 513 million yuan, setting a new record of the single-month sales again in the year. Although the country had a second macro-control in early October, Evergrande was able to manage the risks of the macro-control, so that the Company could create a new historic record in terms of single-month sales.
By the end of October, there had been 52 projects on sale, distributed in 25 major cities in China. In October, we had 4 new projects, and started to enter 4 second- and third-tier cities, namely, Changchu, Huaian, Yichang and Liaoyang, showing that the Group has developed new markets effectively in the third-tier cities. Moving to the third-tier cities will become an important mark of Evergrande Real Estate Group and other real estate enterprises in China in the future, and will make Evergrande in a state of steady growth in the future macro-control of the country.
We now announce to the investors that, in January through October 2010, the Group accumulatively achieved the contracted sales volume of 41.16 billion yuan. That is to say, we had successfully completed the full-year target of 40 billion yuan by October in advance on the basis of raised target, showing that Evergrande is a company of good faith. Both in the past and in the future, Evergrande has fulfilled and will fulfill the promise on the investment of the international and domestic investors faithfully.
In October, 3 properties in the third-tier cities was launched in the market. In the following several months through next year, quantities of properties in the third-tier cities will also be launched in the market. The third-tier cities have become the important growth regions for the future turnover and the profit of the Company, and the important growth points for the profit of the Company.
We had completed the raised contracted sales target two months earlier, not only fulfilling our promise at the beginning of the year, but also demonstrating the team executive force and the huge growth potential of the Company again; in particular, in face of the second round of real estate market control and the sluggish market in September, we adhered to the forward-looking and flexible sales strategies, and by virtue of our high value-added products welcomed by the market and the successively new monthly turnover within the year, our image of high-quality brand has rooted deeply in people’s mind.

Host: Next comes to the session of questions and answers. Please tell us which organization you are from before questioning.

Tencent Finance: November 5 was the first anniversary for the listing of Evergrande. I wonder what President Hui feels most deeply on the lots of things that happened this year. And what is the next change in the face of the Company?
Chairman Hui Ka Yan: For the one year of the listing of Evergrande, I feel that the development of the Company has been more steady and smooth than when it was not listed. After being listed, the Company has been keeping abundant cash flow, with the cash of over 20 billion yuan in most cases, and never less than 15 billion yuan. The Company has made great progress in the steady development.
The one year of the listing of Evergrande was also one year when the government introduced the most and the strictest macro-control policy on the real estate industry in China. From this year we realize that Evergrande won in the strategy. The reason is that Evergrande took the lead in moving to the second- and third-tier cities, with multiple and reasonable product orientation. After outreach to the whole country, Evergrande has obtained the exceptional anti-risk capability, the effective cost control capability, and the advanced quality creation capability by virtue of the standardized centralized management mode, showing that the strategies of the Company are successful.

Apple Daily, Hong Kong: It is estimated that part of developers will launch some properties in the market in the following two months. In the case of great supply, will the property price decrease? In your opinion, will Evergrande continue the 15%-off policy until next year?
Chairman Hui Ka Yan: Evergrande is relatively sensitive to the market, and the operation strategies of the Company depend on the market changes. In addition, we have better basic conditions. We have been developing high-quality products. The quality of every product is the best among the similar products. This is the root cause why our products are most popular in the ordinary people.
Evergrande moved to the second- and third-tier cities as well as the cities and regions with great potential in advance, determining that the land cost of Evergrande is relatively low. Moreover, the rigorous and scientific management and the powerful executive force of Evergrande have formed the effective cost control capability. Due to the good products and the low costs, Evergrande has a great chance in the market competition. No matter what will happen in the market, Evergrande will take the corresponding measures along with the market changes.

Netease Finance: You just mentioned that Evergrande began to move to the third-tier cities in March this year. Does it mean that the house demand of the second-tier cities has been saturated? But Vanke, Polytech and other real estate developers have moved to the second-tier cities.
Chairman Hui Ka Yan: It does not mean that the house demand of the second-tier cities has been saturated. The quantity demand of China is very great. The macro-control policy of China has a crackdown effect on the demand and the investment, but the demand is still strong. It is hopeful that the ordinary people can improve their housing conditions and housing environments. In my opinion, the great quantity demand does not mean saturation.
How does an enterprise can stand on a higher ground and seize more and better business opportunities? It is after we move to the third-tier cities that we realize that many large-scale real estate developers in China have not entered 90% of the third-tier cities. Therefore, the house demand of the second-tier cities has not been saturated.

National Business Daily: You just mentioned that Evergrande began to move to the third-tier cities this year. But the third-tier cities can be regarded as the depressions of the depressions. Will the project pricing be affected accordingly? In view of the full-year sales performance, will the overall profit be diluted?
Chairman Hui Ka Yan: House demand exists anywhere there are people. And there are people who can afford houses in any city. Although the houses are located in the third-tier cities, the opening prices are not low, because the locations are different. The principle of land selection after we move to the third-tier cities is different from the standard in the second-tier cities. We have made appropriate adjustment on the project scale. Therefore, although the houses are located in the third-tier cities, the locations are superior and the prices are not low. Our land costs are relatively low, because of price depression and land cost depression.

Apple Daily, Hong Kong: President Hui is in good mood today. May I ask what is the target and hope of Evergrande next year?
Chairman Hui Ka Yan: I’m smiling not due to my good mood today. I’m in good mood in every news conference. Our sales target next year will increase by 20%—30%. You can reckon the planned sales target of Evergrande. Evergrande is sure to overachieve the target in advance.

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