Evergrande Real Estate speeds up push into new businesses

Evergrande Real Estate Group, a mass-market homebuilder on the mainland, is speeding up diversification of its business even as it outperformed the slowing housing industry.

"Almost all top 500 companies [in the world] diversified when their scale came to a certain level, so will Evergrande," Hui Ka-yan, the firm's chairman and founder, told reporters. "We'll move very fast and you'll hear a lot of news very soon."

A rebalance towards first and second-tier cities since last year is yielding results, pushing Evergrande's core profits up by 39.3 per cent from a year earlier to 6.49 billion yuan (HK$8.2 billion) in the first half.

The company is confident that it could top the full-year target of 110 billion yuan in contracted sales, with 73 per cent of that already locked up in the first seven months of the year.

Evergrande said early this month it would diversify into other businesses such as agriculture, animal husbandry, grains, cooking oil and even infant milk powder as part of its efforts to become one of the world's top 500 firms next year. It has also invested in the mineral water business, which now employs 16,000 of the group's 76,000 workers.

Hui sold half of his cash-burning soccer club to e-commerce giant Alibaba Group Holding for 1.2 billion yuan in June and told reporters that he was busy picking other strategic investors.

The announcement came after Evergrande almost finished its national expansion, with first and second-tier cities combined now accounting for almost half of its outstanding land reserves and sales.