China property

China Evergrande raised 2016 property sales target to 300 billion yuan

New target is even higher than the record annual sales of 262.7 billion yuan posted by China Vanke last year

PUBLISHED : Tuesday, 09 August, 2016, 6:40pm
UPDATED : Tuesday, 09 August, 2016, 10:33pm

Guangdong-based China Evergrande Group, the country’s second largest property developer, has raised its 2016 full-year sales target by 50 per cent to 300 billion yuan amid strong home sales.

The new target is even higher than the record annual sales of 262.7 billion yuan posted last year by China Vanke, China’s largest property developer.

In the first seven months of this year, Evergrande had already achieved contracted sales of 184.8 billion yuan, reaching 92 per cent of its original sales target.

“The group is fully confident on reaching the adjusted contract sales target for 2016 and will continue to uphold the strategy of ‘fast development, fast sales, fast capital recovery,’” chairman Hui Ka Yan said in a company statement after Tuesday’s market close, adding that its products are widely recognised by home buyers for being “high value-for-money”.

Separately, China Vanke said in a stock exchange filing on Tuesday night that it told the Shenzhen bourse, in response to an exchange query following volatility in its share price, that it has never privately leaked any information on rival Evergrande having become one of its substantial shareholders.

It added that Evergrande confirmed it has not acted in concert with any of Vanke’s 10 largest shareholders.

Evergrande has also denied it has issued any false information to the media or other external parties about its stake purchase in Vanke.

This comes a day after Vanke said Evergrande has amassed a 5 per cent stake in Vanke and became its fourth largest shareholder. Vanke is embroiled in a control fight among its largest shareholders.

In an announcement last Thursday, Evergrande said it paid 9.1 billion yuan for a 4.68 per cent stake of Vanke and that the purchase was for “investment purposes”.

While the total cost of its 5 per cent stake remains unknown, global rating agency S&P said the transaction is credit negative for Evergrande because the purchase will further strain Evergrande’s liquidity and reduce its debt payment capacity.

Vanke’s shares in Hong Kong rose 0.9 per cent to HK$5.66 on Tuesday