The effect of “high growth, scale control, and debt reduction” is beginning to show
On the afternoon of August 31, China Evergrande (03333.HK) released its 2020 interim results report.
The announcement shows that in the first half of 2020, China Evergrande achieved sales of 348.8 billion yuan, an increase of 24% year-on-year, and 54% of its annual target of 650 billion;The sales return was 312 billion yuan, an increase of 67% year-on-year, and the sales return rate was 89.4%, an increase of 23% year-on-year. Both sales and payment collection reached new highs, and the trend of high growth was obvious.
At the same time, operating income in the first half of the year reached 266.6 billion yuan, core net profit 19.3 billion yuan, and cash balance 204.6 billion yuan, all core indicators ranked in the industry Forefront.
In the first half of the year, the traditional real estate sales model stalled due to the epidemic. Evergrande took the lead in implementing disruptive online house selling measures, and successively launched “3000 yuan house purchase”, “78% discount house purchase” and “619 house purchases” nationwide. Preferential policies such as “Full disclosure of real estate and housing prices” have created a new closed-loop model combining online and offline, taking the lead in running the market, and ultimately achieving sales growth against the trend.
This is also Evergrande’s proposal at the end of March to implement “high growth, scale control, After the “debt” development strategy, various core data are fully presented for the first time. Data show that Evergrande’s interest-bearing liabilities have been significantly reduced by about 40 billion yuan compared with when the new strategy was proposed at the end of March. The effect of reducing debt is beginning to show, and the quality of development has been further improved.
In the past six months, Evergrande has strictly controlled the scale of land and increased the promotion of land reserves. According to the announcement, as of June 30, 2020, the scale of Evergrande’s residential land bank has been reduced to 240 million square meters, and the effect of “scale control” has been further improved.