Real Estate Sector China

Transcription

1 Real Estate Sector China August 2014 Produced by: - 1 -

2 Table of Contents I. Sector Overview 1. Sector Highlights 2. Main Sector Indicators 3. Sector Revenues & Profits 4. Sector Costs Overview 5. Investments 6. Employment & Wages 7. Business Climate 8. Prices 9. Sector Forecast 10.Government Policy II. Residential Property Market 1. Subsector Highlights 2. Investments & Sales 3. Residential Floor Space 4. Residential Property Regional Markets 5. Housing Mortgages III.Office & Commercial Property 1. Subsector Highlights 2. Investments 3. Sales 4. Office & Commercial Floor Space IV.Land Market 1. Land Market Activity 2. Local Land Markets 3. Land Supply 4. Land Prices 5. Land Prices by City V. Main Players 1. China Vanke Co.,Ltd. 2. China Vanke Co.,Ltd. (cont d) 3. Evergrande Real Estate Group Ltd. 4. Evergrande Real Estate Group Ltd. (cont d) 5. Poly Real Estate Group Co.,Ltd 6. Poly Real Estate Group Co.,Ltd (cont d) 7. China Overseas Land & Investment Ltd. 8. China Overseas Land & Investment Ltd. (cont d) 9. Country Garden Holdings Co., Ltd. 10.Country Garden Holdings Co., Ltd. (cont d) - 2 -

3 I. Sector Overview - 3 -

4 Sector Highlights Development After a decade of average growth in the industry of about 25%, a slowdown took place in In 2013, the industry showed some signs of recovery but amid policy controls, stronger competition, rising costs and market oversupply in some places, such rates will not to be achieved again in the foreseeable future. Policy balancing The government finds itself in the difficult position to balance between the interests of both sides of the market. On one hand, high prices are causing discontent in Chinese society. On the other, however, the sector has been a major contributor to the country's GDP growth and is heavily relied on by local governments for revenue generation. New government While a number of tightening measures were announced by the previous government, the new administration which came to power in early 2013 has stepped back on their implementation and left the market to play a larger role. As a result, 2013 saw the biggest property price increase since 2009, as 69 out of the 70 large and middle cities reported rising prices of newly-built commodity housing. Main players The number of property developers with annual sales of more than RMB100bn rose to seven in 2013, up from three in the previous year. Meanwhile, the number of real estate companies in the country's top 500 list of Fortune China reached 40, up from 39 in Consolidation The market slowdown is seen as beneficial for a new wave of M&A activity in the sector. A total of 73 deals took place in the first half of 2014 among China's real estate companies, with a total value of RMB 15.2bn (up 2.1 times on the same period in 2013), and the trend is likely to continue into the next quarters

5 Main Sector Indicators China's Real Estate Sector in Figures GDP, RMB bn 26,581 31,405 34,090 40,151 47,310 51,947 56,885 Sector revenues, RMB bn 2,340 2,670 3,461 4,300 4,449 5,103 n/a Revenues as share of GDP 8.8% 8.5% 10.2% 10.7% 9.4% 9.8% n/a Investments, RMB bn 2,529 3,120 3,624 4,826 6,180 7,180 8,601 Total assets, RMB bn 11,108 14,483 17,018 22,447 28,436 35,186 n/a Total liabilities, RMB bn 8,268 10,478 12,504 16,730 21,447 26,460 n/a Shareholders' equity, RMB bn 2,840 4,005 4,514 5,717 6,989 8,726 n/a Number of employees, mn n/a Number of enterprises 62,518 87,562 80,407 85,218 88,419 89,859 n/a Source: National Bureau of Statistics - 5 -

6 Sector Revenues & Profits Revenues, RMB bn Profit 2,670 3, % 4,300 4, % % % 52 4,746 4,059 4,170 3,251 2, % Total revenues Other, RMB bn Rental income, RMB bn Commodity building sales, RMB bn Land transfer, RMB bn Growth, % y/y % % 26.1% % -6.2% Total profit, RMB bn Growth, % y/y 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Comments According to research company China Real Estate Information Corp (CRIC), the total sales of China's top ten real estate developers in 2013 accounted for 13.27% of the property sales market, up 0.5% over 2012, whereas the floor area sold by them accounted for 8.4%, representing a 0.7% increase over Rising construction, land and marketing costs as well as an increase in the proportion of flats relative to villas, with the former being less profitable, are the major factors putting a downward pressure on profitability in the latest quarters. Source: National Bureau of Statistics - 6 -

7 Sector Costs Overview Cost of Sales Other Costs % Expenses % 3, , , % 25.0% Sales & tax surcharges, RMB bn , % , % Sales expenses % 15.0% % 10.0% Administration expenses % 2.4% % Financial expenses Total profit, RMB bn Growth, % y/y Source: National Bureau of Statistics - 7 -

8 3, , , , , Investments Real Estate Investments FDI 33.2% 28.1% % % 16.2% Real estate investments, RMB bn Growth, % y/y FDI utilized, USD mn Number of contracts Comments Facing a stronger competition and tighter policy controls aimed at curbing demand, many of China's leading developers are stepping up their investments in overseas real estate, with the Southeast Asian region appearing to be especially attractive for them. At home, property investment growth is still strong, remaining in the double-digit area, although off its peak levels of nearly 30% in 2010 and A negative impact on FDI is expected from the fall of the RMB exchange rate which has made investments in yuan-denominated assets less appealing to foreign investors. Source: National Bureau of Statistics, Ministry of Commerce - 8 -

9 Investments (cont'd) Residential 68.5% Investment Distribution by Type (2013) Office buildings 5.4% Commercial buildings 13.9% Other buildings 12.2% Investment Distribution by Funding Source (2013) Domestic funded: others 84.1% Domestic funded: collective owned 0.7% HMT funded enterprises 6.3% Foreign funded enterprises 3.4% Domestic funded: state owned 5.5% Investment Distribution by Region, in RMB bn Indicator Jiangsu Guangdong Liaoning Zhejiang Shangdong Anhui Sichuan Henan Fujian Beijing Hebei Hubei Chongqing Shanghai Hunan Yunnan Shaanxi Guizhou Guangxi Heilongjiang Other regions Source: National Bureau of Statistics - 9 -

10 Employment & wages Average wages 35,870 30,118 32,242 33,967 19,489 21,334 23,228 28,471 30,800 46,764 42,837 43,814 43,464 30,778 27,017 51,048 35, Private real estate management enterprise average wage, RMB Urban non-private real estate management enterprise average wage, RMB Staet-owned real estate management enterprise average wage, RMB Employees 2, , , ,257 2, No of employee, thou Source: National Bureau of Statistics

11 Jun, 2010 Jul, 2010 Aug, 2010 Sep, 2010 Oct, 2010 Nov, 2010 Dec, 2010 Feb, 2011 Mar, 2011 Apr, 2011 May, 2011 Jun, 2011 Jul, 2011 Aug, 2011 Sep, 2011 Oct, 2011 Nov, 2011 Dec, 2011 Feb, 2012 Mar, 2012 Apr, 2012 May, 2012 Jun, 2012 Jul, 2012 Aug, 2012 Sep, 2012 Oct, 2012 Nov, 2012 Dec, 2012 Feb, 2013 Mar, 2013 Apr, 2013 May, 2013 Jun, 2013 Jul, 2013 Aug, 2013 Sep, 2013 Oct, 2013 Nov, 2013 Dec, 2013 Feb, 2014 Mar, 2014 Apr, 2014 May, 2014 Jun, 2014 Jul, 2014 Business Climate Real Estate Climate Index (RECI), 2000=100 RECI Comments Following a decline which started in early 2010, the index has stabilised over the last two years, but it remains at levels between 94 and 98 which is below the neutral level of 100. Increasing uncertainty in the market has been taking its toll on the confidence of market participants. Source: National Bureau of Statistics

12 Prices Average Property Selling Price by Type, RMB/sq.m. Average Property Selling Price by City, RMB/sq.m. 50% 40% 30% 20% 10% 0% 8,378 3,800 5,886 3,576 12,997 12,327 12,306 11,406 10,608 9,777 8,488 9,021 7,747 4,681 5,032 5,357 5,791 6,237 6,871 4,459 4,725 4,993 5,430 5,850 3,219 3,671 4,099 4,182 4,306 Expectations % of respondents expecting higher housing prices 4, Average price Residential Office building Other building type Commercial bldg City Shenzhen Beijing Shanghai Guangzhou Hangzhou Xiamen Nanjing Fuzhou Ningbo Tianjin Qingdao Dalian Wuhan Haikou Chengdu Source: National Bureau of Statistics, PBoC

13 Sector Forecast Real Estate Market Value Rental Market Size % 9, , % 11, % 12, % 13, % 30% 25% 20% 15% 10% 5% % 0.0% 0.0% 0.0% -0.1% 0.3% 0.2% 0.1% -0.1% -0.2% Market value, RMB bn Annual growth 0% Rented properties, mn Annual growth -0.3% Office Rents, Expected Net Yield Comments E 2014 F 2015 F 2016 F 2017 F 2018 F Shanghai 2-8% 4-5% 4-5% 2-8% 2-8% 2-8% 2-8% Beijing 3-10% 3-10% 3-10% 3-10% 3-10% 3-10% 3-10% Wuhan 7-9% 7-9% 7-9% 7-9% 7-9% 7-9% 7-9% Shenzhen 4-7% 4-7% 4-7% 4-7% 4-7% 4-7% 4-7% Research firm MarketLine expects the Chinese real estate market to grow by 70% in value between 2013 and 2018, with a CAGR of 11.2% for the period. Weakening in the mid- and long term is seen as a consequence of slower overall growth and industrial production and the corresponding drop in demand across the economy. Office rentals are to remain solid, supported by strong demand in major cities. BMI expects rental rates to largely remain the same by the end of Source: Marketline, BMI

14 Regulations The new government has announced its commitment to market-oriented reform of the real estate sector through ongoing policy measures such as limiting property purchases, reform on property tax, and region-specific property market controls. Chinese Prime Minister Li Keqiang has recently highlighted the importance of local control measures as opposed to nationwide property regulations. New major regulations, long-awaited by the market, are likely to be published by the end of this year or in early The regulations are to be directed at increasing housing supply and curbing property price increases. In May 2014, China established a government agency to supervise property registration as part of an effort to accelerate the registration process. The bureau, under the Ministry of Land and Resources, is to be in charge of the registration of land, real estate, forest, grassland and maritime space. Beijing is planning to build a national property registration system in about three years and make it operational for information sharing and queries in four years. The system is expected to make the property market more transparent and serve as a foundation for better market regulation. The cooling of China's property market is likely to encourage authorities to speed up property tax reforms. A legislation plan to establish a property sector taxation system is to be submitted to the Standing Committee of the National People's Congress later this year. The legislation process is to be completed by the end of 2016, and the related taxes are to be implemented in Major proposed reforms include a real estate tax levied on homeowners and a land tax on property developers. With a real estate tax, a homeowner has to pay taxes in proportion to the monetary value of their housing at a certain tax rate each year. In China, taxes are currently imposed only when a housing transaction takes place, which makes it easier for speculation. In August 2014, the Ministry of Commerce announced that foreign real estate investors only need to apply at the ministry online, rather than previous practice of handing in paper applications, thus simplifying the procedure for foreign investment in the property market of China. In July 2014, the National Development and Reform Commission announced that the government will no longer be provide guidance for real estate consulting prices, which will be determined by the market. Source: Mergent, Xinhua, China Daily

15 II. Residential Property Market

16 Subsector Highlights Development Following a strong year in 2013, when consumers were back on the market as the new government was hesitant in implementing new property curbs, the residential real estate market has again started to lose momentum in early 2014 as bank credit was tightened, supply is growing and homebuyers' sentiment is waning. Divergence As the market changes drastically from the past decade, an increasingly notable difference between major and smaller cities is emerging. Demand in first and, to a large degree, second-tier cities, where purchasing power is stronger, remains robust, and supply of residential property is not always sufficient. On the contrary, in third- and forth-tier cities, supply exceeds demand and price growth has been fading. Affordable housing In order to protect families from the increasingly unaffordable house prices, the government has stepped up the construction of subsidised housing million units have been started from 2011 to 2013, which constitutes some 70% of the planning period target of 36 million, and 15.8 million units have been completed. In 2014, the central government plans to spend RMB 116bn on subsidised homes. The availability of affordable housing is seen as a major factor in bringing down home prices while supporting demand. Rents up As housing prices in major cities become less affordable for newcomers while demand has shown few signs of weakening, the home renting market is gaining steam. In 2013, rental prices in the 11 leading cities have risen by an average of 5.4%, much higher than overall price level. However, supply in the segment is falling short as much property in older and more affordable areas is being demolished, while homebuyers tend to be more interested in asset appreciation than generating rental income

17 Investments & Sales Residential Investments Residential Property Sales 5,895 6,769 6,749 4,432 4,937 5,171 4,862 5,347 5,778 5,482 3,403 3,816 4,395 3,948 3,605 3,972 4,380 2,561 2,599 3,047 2,964 2,042 1, , Residential property investments, RMB bn Residential property investments: villa & deluxe apartments, RMB bn Residential property investments:economic housing, RMB bn Value of buildings sold, RMB bn Value of buildings sold: existing, RMB bn Value of buildings sold: in advance, RMB bn Value or residential buildings completed, RMB bn Source: National Bureau of Statistics

18 , , , , , , , , , ,863.5 Residential Floor Space Residential Commodity Building Floor Space Started Res. Commodity Building Floor Space Under Construction Total, sq.m. mn Villa & deluxe apartments, sq.m. mn Economic housing, sq.m. mn Total, sq.m. mn Villa & deluxe apartments, sq.m. mn Economic housing, sq.m. mn Residential Commodity Building Floor Space Completed Total, sq.m. mn Villa & deluxe apartments, sq.m. mn Economic housing, sq.m. mn Source: National Bureau of Statistics

19 Residential Floor Space (cont'd) Residential Commodity Building Floor Space Sold 1, Residential Commodity Building Floor Space Presold Total, sq.m. mn Villa & deluxe apartments, sq.m. mn Economic housing, sq.m. mn Total, sq.m. mn Villa & deluxe apartments, sq.m. mn Economic housing, sq.m. mn Residential Commodity Building Floor Space Leased Residential Commodity Building Floor Space Waiting For Sale (Vacant) Total, sq.m. mn Villa & deluxe apartments, sq.m. mn Economic housing, sq.m. mn Total, sq.m. mn Villa & deluxe apartments, sq.m. mn Economic housing, sq.m. mn Source: National Bureau of Statistics

20 Residential Floor Space (cont d) Residential Commodity Building Flats Completed Residential Commodity Building Flats Sold 4, , , , , , , , , , Total, units th Villa & deluxe apartments, units th Economic housing, units th Total, units th Villa & deluxe apartments, units th Economic housing, units th 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Social Housing 4,320 4,536 5,440 10,430 7,688 6, Number of flats completed, units th Number of flats started, units th Source: National Bureau of Statistics, Ministry of Housing and Urban-Rural Development

21 Residential Floor Space (cont d) Residential Floor Space in Selected Cities, in sq.m. mn Started Under construction Completed Sold Chongqing Shenyang Chengdu Wuhan Suzhou Changsha Zhengzhou Xian Kunming Tianjin Beijing Shanghai Dalian Hefei Guiyang Guangzhou Hohhot Nanjing Fuzhou Qingdao Hangzhou Source: National Bureau of Statistics

22 Residential Property Regional Markets Residential Property Investments, RMB bn Average Res. Property Price in Municipalities, RMB/sq.m Eastern China 1, , , , ,269.7 Central China , ,326.5 Western China , ,298.9 Beijing Tianjin ,648 10,661 8,253 8,115 5,576 5,598 2,588 2,640 13,224 12,364 6,605 3,266 17,151 14,213 7,913 4,040 17,854 15,518 16,553 16,192 13,448 13,870 8,539 8,010 8,390 4,492 4,805 5,239 Shanghai Chongqing Shanghai Chongqing Beijing Tianjin Comments In first- and second-tier cities where demand is strong and prices are skyrocketing, more tightening policies are expected to be implemented in However, unlike many other countries, even if a price correction takes place in major cities, it is not seen as likely to lead to a national housing or financial crisis, unlike most mature Western markets, due to the fact that such cities only represent a small share of the total market. For instance, first-tier cities account for 4.7% of the total population and 3.8% of the residential property transactions. Source: National Bureau of Statistics

23 Housing Mortgages Housing Mortgage Loans to Individuals, RMB bn 6,927 7,137 7,300 7,490 7,800 8,100 8,570 9,070 9,470 9,800 10,290 10,740 Q3/2011 Q4/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2012 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Comments Chinese commercial banks are becoming increasingly reluctant to provide mortgage lending, bringing about new fears about a future market correction. As the market is reaching a more mature stage and the downward risks are rising while profitability from individual loans is wearing thin, banks are much more conservative in their approach. The country's central bank, the People's Bank of China, has recently urged banks to speed up lending to homebuyers, especially first-timers but their reaction has so far been subdued. Source: PBoC

24 III. Office & Commercial Property

25 Subsector Highlights Development Unlike residential property, office and commercial real estate has retained its uniform strength and, with demand significantly outpacing supply, has become one of the most lucrative investment segments in China. Due to the exponential growth of the e- commerce industry and its need for storage facilities, logistics property has become especially attractive. Multinational demand In spite of rising costs and the bleak economic outlook, over two thirds of multinational companies expect to be adding new staff in China over the next three years, while more than half of them are planning to expand their presence in the country geographically. Most of the companies view Eastern China as the best region for expansion or relocation, with the city of Shanghai standing out as most preferable. Improved transparency According to the JLL and LaSalle Investment's biennial Global Real Estate Transparency report, transparency in the commercial real estate sector in China, especially in first-tier cities, has shown some improvement over the recent years. The report attributes the relative improvement of mainland China s market fundamentals to the stronger presence of global real estate advisers. The most improving areas are land use planning and compulsory purchase by a public body, while taxation consistency and predictability, as well as the accuracy of data in real estate debt are the main factors hindering further development

26 Investments Office & Commercial Property Investments 1, Office building investments, RMB bn Commercial building investments, RMB bn Comments Real estate research firm Insite expects 15 million square meters of new commercial property to enter China's major 20 cities in The number is to reach 35mn sq m by the end of 2016, which would represent a rise of 54% over the existing stock in The new supply of office space is to reach 58mn sq m in 2016, a 73% increase over the existing stock. Source: National Bureau of Statistics

27 Sales Office Property Sales Commercial Property Sales Value of buildings sold: in advance, RMB bn Value of buildings sold: in advance, RMB bn Value of buildings sold: existing, RMB bn Value of buildings sold: existing, RMB bn Source: National Bureau of Statistics

28 Office & Commercial Floor Space Office & Commercial Commodity Building Floor Space Started Office & Commercial Commodity Building Floor Space Under Construction Office, sq.m. mn Commercial, sq.m. mn Office, sq.m. mn Commercial, sq.m. mn Office & Commercial Commodity Building Floor Space Completed Office, sq.m. mn Commercial, sq.m. mn Source: National Bureau of Statistics

29 Office & Commercial Floor Space (cont'd) Office & Commercial Commodity Building Floor Space Sold Office & Commercial Commodity Building Floor Space Presold Office, sq.m. mn Commercial, sq.m. mn Office & Commercial Commodity Building Floor Space Leased Office, sq.m. mn Commercial, sq.m. mn Office & Commercial Commodity Building Floor Space Waiting For Sale (Vacant) Office, sq.m. mn Commercial, sq.m. mn Office, sq.m. mn Commercial, sq.m. mn Source: National Bureau of Statistics

30 Office & Commercial Floor Space (cont'd) Office & Commercial Floor Space In Selected Cities (2013), in sq.m. mn Started Under construction Completed Sold Office Commercial Office Commercial Office Commercial Office Commercial Chongqing Beijing Shanghai Chengdu Tianjin Shenyang Zhengzhou Guangzhou Hangzhou Suzhou Ningbo Hefei Wuxi Changsha Wuhan Qingdao Xian Kunming Hohhot Harbin Changchun Source: National Bureau of Statistics

31 Office & Commercial Property Regional Markets Average Office Property Selling Price, RMB/sq.m.n Average Commercial Property Selling Price, RMB/sq.m.n 25,997 23,413 23,702 23,623 23,426 21,598 22,114 21,000 16,554 16,857 18,888 11,134 13,855 9,783 11,783 12,306 11,441 13,349 10,608 11,406 12,327 12,997 8,907 11,495 8,378 9,537 11,687 11,370 4,667 5, Shanghai Chongqing Beijing Tianjin Nationwide 24,920 26,405 22,452 19,091 19,527 20,476 17,148 19,294 16,550 15,237 8,955 15,779 16,218 10,338 10,546 11,222 13,008 9,021 9,576 9,777 6,610 10,780 5,886 6,871 7,747 8,488 7,145 8,003 8,132 5, Shanghai Chongqing Beijing Tianjin Nationwide Office & Commercial Property Investments, RMB bn Office Commercial Office Commercial Office Commercial Office Commercial Office Commercial Nationwide Beijing n/a n/a Tianjin n/a n/a Shanghai n/a n/a Chongqing n/a n/a Source: National Bureau of Statistics

32 IV. Land Market

33 1,591 1, ,710 2,600 2,690 2, ,150 3, ,200 4,040 Land Market Activity Land Area on the Market Land Transfer Revenues Land area purchased, sq.m. mn Land area developed, sq.m. mn Land area to be developed, sq.m. mn Land transfer revenues, RMB bn Land transfer revenues: bid, auction, listed, RMB bn Comments In 2013, land sales in China reached a record high. However, since the beginning of 2014 real estate enterprises have become increasingly cautious about land purchases as the financing environment has worsened and demand for housing in most places outside the biggest cities has cooled down. According to market observers, land sales account for more than 50% of local governments' income in China. Source: National Bureau of Statistics, Ministry of Land and Resources

34 Local Land Markets Land Area Purchased by Region, in sq.m. mn Beijing Tianjin Shanghai Chongqing Rest of the country Comments Companies in the sector have shifted their focus from smaller cities to bigger ones, particularly first-tier cities where more people are arriving from the rest of the country and the undersupply of residential property is increasing. Therefore, demand for land in major cities is being driven to new heights and the trend is not expected to end anytime soon. Source: National Bureau of Statistics

35 Land Supply Land Supply, in ha th Land Supply Usage, in ha th Land supply: transferred Land supply: total Other use Property use Residential Industrial, mining & storage use Source: Ministry of Land and Resources

36 Land Prices Land Prices, 105 Major Cities, RMB/sq.m. 5,018 5,185 5,358 5,506 5,615 5,654 5,705 5,728 5,793 5,843 5,964 6,044 6,201 6,306 6,415 6,475 4,085 4,245 4,349 4,443 4,518 4,518 4,516 4,522 4,564 4,620 4,702 4,799 4,910 5,033 5,139 5,214 2,805 2,882 2,945 3,000 3,040 3,049 3,057 3,069 3,093 3,129 3,175 3,226 3,286 3,349 3,412 3, / / / / / / / / / / / / / / / /2014 Average price Average price: commercial Average price: residential Average price: indusrial Comments The government's measures to curb prices growth in major cities had no significant effect in 2013 as they registered a 35% rise in land prices. There was some minor adjustment in price growth rates in early 2014 on the back of tighter credit and slower growth in individual mortgage loans but any significant downward trend is yet to be observed. Source: Ministry of Land and Resources

37 Land Prices by City Source: Ministry of Land and Resources Land Prices, RMB/sq.m. Commercial Residential Industrial June 2013 June 2014 June 2013 June 2014 June 2013 June 2014 Shenzhen Shanghai Guangzhou Hangzhou Beijing Fuzhou Nanjing Kunming Wenzhou Chengdu Ningbo Tianjin Qingdao Quanzhou Land Prices, RMB/sq.m. (cont d) Commercial Residential Industrial June 2013 June 2014 June 2013 June 2014 June 2013 June 2014 Dongguan Guiyang Nanchang Foshan Liuzhou Shantou Hefei Harbin Suzhou Jinan Nanning Dalian Changzhou Haikou

38 V. Main Players

39 China Vanke Co.,Ltd. Financial Performance 127,454 96,860 67,709 47,764 31,406 34,639 24,460 18,235 7,283 9,625 12,551 15, Revenue, RMB mn Gross profit, RMB mn Net profit, RMB mn Other Financial Data Indicator Cost of sales, RMB mn 29,529 43,249 65,454 92,814 Total assets, RMB mn 215, , , ,475 Total liabilities, RMB mn 161, , , ,035 Total stockholders' equity, RMB mn 54,586 67,833 82, ,439 Earnings per share Highlights China Vanke Co.,Ltd.was founded in Shenzhen in 1984 and became engaged in real estate in It was the second listed company on the Shenzhen stock exchange (1991). The Company is the world s largest property developer It is the 9 th largest enterprise in China in terms of operating revenue, and the 2 nd in amount of taxes paid. Vanke s business covers 53 large and medium-sized cities in the Pearl River Delta region, the Yangtze River Delta region and the Bohai Economic Rim, as well as the central and western part of China. Amid severe competition for land in mainstream city markets, the Company is staying loyal to its strategic principle of rather forgoing an opportunity than making a wrong acquisition, doing its best to avoid to avoid acquiring overvalued sites. In a move towards further strengthening its management, in late 2013 Vanke established a partnership plan requiring project managers to make personal investments in their development projects in order to align their interests with Company. In June, Vanke established strategic partnership with the country's leading internet company Baidu.com Inc., which is to bring Baidu's location-based services in its commercial property businesses to provide better services and to construct a commercial ecosystem that integrates consumers, merchants and operators. Source: Company data

40 China Vanke Co.,Ltd.(cont d) Company Size Performance by Business (2013, in RMB mn) % 2.06% 2.19% 35, % 31, % 27, , , Number of employees Market share in China, % 3% 2% 2% 1% 1% 0% Property develiopment Property management Amount Revenue % of total Change y/y Cost of sales Amount % of total Change y/y 124, % 31.0% 9, % 41.7% 1, % 71.5% % 65.9% Other business 1, % 71.6% % -17.8% Total 127, % 31.6% 9, % 41.8% Contracted Sales Area Revenues by Region (2013, in RMB mn) % 42% 39% 6,137 5,570 6,636 19% 3,228 2,318 1,638-9% 14,899 12,956 10,753 8,977 35% 20% 20% 15% Contracted sales area, sq.m. th Growth y/y 100% 80% 60% 40% 20% 0% -20% Shanghai 26,308 Guangzhou & Shenzhen 41,931 Beijing 32,036 Chengdu 24,703 Source: Company data

41 Evergrande Real Estate Group Ltd 5,723 3,914 1,117 45,801 Financial Performance 61,918 65,261 18,419 20,274 17,131 8,025 11,785 9,182 Other Financial Data 93,672 26, ,709 Revenue, RMB mn EBITDA, RMB mn Net income, RMB mn Indicator Total operating expenses, RMB mn 2,650 29,022 37,110 43,120 60,846 Sales, general and admin. expenses, RMB mn 1,820 2,959 4,882 5,618 7,782 Total assets, RMB mn 63, , , , ,148 Total liabilities, RMB mn 49,914 83, , , ,806 Total stockholders' equity, RMB mn 13,157 21,366 34,858 41,691 79,343 Earnings per share Highlights Evergrande Real Estate Group, listed on the HK stock exchange, was incorporated in 1996 in Guangzhou. It is the owner of Asia s most successful football club in recent years, Guangzhou Evergrande.F.C. However, a 50% stake in it was sold to Alibaba Group in June The Group which over 2013 was developing 291 large projects in 147 major Chinese cities has over 48,000 employees. It has established branch companies (or regional companies) in all 4 municipalities and 29 provincial capitals across the country. In 2013, it paid13.4 billion RMB in tax and created 600 thousand jobs. Evergrande s recent strategic behaviour has been focusing on replenishing of its land reserves, optimizing the regional layout of residential property projects and acquiring quality land plots in first and second-tier cities. One of its strong competitive advantages is cost efficiency, as at 949 RMB/sq.m on average, the cost of its land reserves tends to be below the one of its major competitors. 45.4% of the aforementioned 291 projects were in first- and second-tier cities across China. Most recently, the Group has sought to diversify its business, expanding into the fields of agricultural products and consumer goods. Source: Company data

42 Evergrande Real Estate Group Limited (cont d) Source: Company data Revenues by Source, in RMB mn Expenses by Type (in RMB mn) Sales of properties 60,474 63,507 92,235 Rental income of investment properties Property management services Other businesses 897 1, , , ,718 3,750 41,532 2, ,887 5,350 59, Others Depreciation & amortisation Sales commissions Advertising costs Staff costs including directors emoluments Region No. of projects Regional Distribution of Business Site area (sq.m. th) Total GFA (sq.m. th) Land reserve GFA (sq.m. th) Share of total Guangdong 24 10,560 19,885 14, % Liaoning 20 5,082 18,229 13, % Jiangsu 20 7,973 16,458 12, % Hebei 17 6,459 14,274 11, % Shandong 16 4,803 13,857 10, % Anhui 17 3,605 13,052 9, % Sichuan 15 6,238 12,532 8, % Henan 12 3,285 10,130 7, % Hunan 15 2,843 9,596 5, % Jiangxi 9 3,692 6,904 4, % Gansu 5 1,967 4,711 4, % Hubei 9 3,720 7,073 4, % Chongqing City 12 3,286 7,666 3, % Shanxi 10 2,262 6,712 3, % Guizhou 6 1,322 4,592 3, % Hainan 8 2,400 4,129 3, % Heilongjiang 10 1,565 4,152 3, % Rest of the country 66 14,761 30,457 23, %

43 Poly Real Estate Group Co.,Ltd Financial Performance Highlights 92,356 35,894 47,036 68,906 22,987 14,568 17,298 7,516 10,575 5,201 3,519 4,920 6,531 8,438 10, Revenue, RMB mn EBITDA, RMB mn Net income, RMB mn Other Financial Data Indicator Total operating expenses, RMB mn 17,766 28,470 37,072 55,512 76,349 Total assets, RMB mn 89, , , , ,940 Total liabilities, RMB mn 64, , , , ,177 Total stockholders' equity, RMB mn 25,088 29,709 35,258 42,486 51,763 Earnings per share Poly Real Estate (Group) Co. Ltd. was established in 1992 in Guangzhou and was listed on the Shanghai Stock Exchange in It is a part of the China Poly Group Corporation. For five successive years, it has ranked at number 1 in terms of comprehensive strength of state-owned real estate enterprise. Its core business involves the development and distribution of residential, commercial, and composite buildings. Its chief operations are concentrated in the cities of Guangzhou, Beijing, Shanghai, Foshan, Shenyang, Changchun, Wuhan, Chongqing, Chengdu, Changsha, Nanchang, Tianjin, Baotou, Hangzhou, and Yangjiang. Poly took advantage of the tight supply in the residential property market in H1 of 2013 and stepped up its sales, which helped it reach an over 18% growth in property area sold over the year in total. Contracted sales value for the same year amounted to RMB15.3 bn, which represented a share of 1.54% in domestic market. Source: Company data

44 Poly Real Estate Group Co.,Ltd (cont d) Employees Costs, in RMB mn , Number of employees, th 60,000 50,000 40,000 30,000 20,000 10, ,269 1,014 34,400 26,541 26,986 16, Other costs Developm ent & constructio n costs Land costs Revenues by Business (2013, in RMB mn) Revenues by Region (2013, in RMB mn) Source: Company data Real estate 89,290 Others 3, Guangdong 14,135 26,801 Beijing 4,677 10,379 Sichuan 9,542 8,677 Hubei 4,288 7,560 Shanghai 6,667 7,506 Chongqing 3,716 6,199 Hangzhou 2,095 4,790 Jiangsu 4,955 4,433 Liaoning 4,465 3,530 Other regions 14,335 12,

45 China Overseas Land & Investment Ltd. Financial Performance Highlights 82,469 39,278 12,2597,646 46,650 51,332 23,388 18,914 12,671 15,464 64,581 Other Financial Data 27,070 28,348 23,044 18, Revenue, HKD mn Operating profit, HKD mn Profit attributable to shareholders, HKD mn Indicator Total operating expenses, HKD mn Sales, general and admin. expenses, HKD mn 23,736 21,713 23,298 35,474 51,304 1,327 1,907 1,897 2,037 2,817 Total assets, HKD mn 114, , , , ,522 Total liabilities, HKD mn 71, , , , ,472 Total stockholders' equity, HKD mn 42,330 58,770 71,890 87, ,050 Earnings per share China Overseas Land & Investment Ltd., also known as COLI, was established in 1979 in Hong Kong and listed at the HK stock exchange in COLI is a subsidiary of China State Construction Engineering Corporation, the largest construction conglomerate in China, and operates in 42 cities and regions on the mainland, in Hong Kong and Macau. Its core business is the development and sales of property projects, with a strategic focus on mid- to high-end real estate. It is also engaged in other property-related businesses such as property investment, property management, and planning and construction design etc. Rental income reached HKD860 million in 2013, representing a year-on-year growth of 48.3%. The COLI announced plans to launch up to 30 projects worth HKD110 bn in the second half of the current year. Source: Company data

46 China Overseas Land & Investment Ltd. (cont d) Land Reserves Land Reserves by Region (2013) Northern China 37.0% South China 18.3% East China 21.0% Land reserves, sq.m. mn Northeast China 9.2% HK & Macau 0.6% Western China 13.9% 10,000 8,000 6,000 4,000 2,000 0 Contracted Sales 9,234 7, ,580 4,768 5, Contracted sales area, sq.m. th Contracted sales value, HKD bn Source: Company data

47 Country Garden Holdings Co., Ltd. Financial Performance Other Financial Data Indicator Total operating expenses, RMB mn Sales, general and admin. expenses, RMB mn 12,747 17,412 22,710 26,448 43,649 1,180 1,455 2,448 3,754 6,337 Total assets, RMB mn 63, , , , ,239 Total liabilities, RMB mn 42,399 56,663 77,243 97, ,228 Total stockholders' equity, RMB mn 34,748 41,891 62,682 25,804 17,586 14,064 7,393 10,141 12,228 4,390 2,126 4,318 5,838 6,885 8, Revenue, RMB mn EBITDA, RMB mn Net income, RMB mn 21,300 25,418 30,067 38,884 46,011 Earnings per share Highlights Country Garden Holdings Co., Ltd, based in Foshan, Guangdong province, together with its subsidiaries, is one of China s leading integrated property developers, with businesses comprising construction, installation, fitting, property development, property management, as well as hotel development and management. It has been listed on SEHK since The Group has over 100 high-quality property projects, covering 11 major regions of China and serving over 300,000 home owners. Country Garden said in August it was planning to launch new 37 projects in the second half of 2014, up from 22 in the first six months. Country Garden recently announced expansion plans for new new overseas markets in North America and Southeast Asia, while setting a target for an over 20% contracted sales growth in It currently has two projects in Malaysia and one in Australia. The highest contracted sales contributor for 2013 was Country Garden Danga Bay project in Malaysia, which contributed about RMB7 bn. The Group s management has expressed interest in expanding its positions in the Malaysian property market and is planning to list its local unit on the Bursa Malaysia stock exchange. Source: Company data

48 Country Garden Holdings Co., Ltd. (cont d) 70,000 Revenues by Business Property Business Overview (2013) 60, Indicator GFA, sq.m. th Hotel services 50,000 All projects 99,392 40, Property management services Completed 45,732 30,000 60,043 20,000 40,012 Construction, fitting and decoration services Total completed saleable 43,751 10,000 Property sales Total saleable GFA sold and delivered 39, Total saleable GFA pre-sold pending delivery 1,102 Source: Company data

49 Contact: Corporate Headquarters Nestor House Playhouse Yard London EC4V 5EX UK Voice: Fax: Americas Headquarters 225 Park Avenue South New York, New York US Voice: Fax: Asia Headquarters Eucharistic Congress Bldg. No. III 4th Floor, 5 Convent Street Mumbai India Voice: Fax: Disclaimer: The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional Investor PLC take no responsibility for decisions made on the basis of these opinions. A Euromoney Institutional Investor company. About EMIS Insight EMIS Insight is a unit of EMIS that produces proprietary strategic research and analysis. The service features market overviews, industry trend analysis, legislation and profiles of the leading sector companies provided by locally-based analysts. About EMIS Founded in 1994, EMIS (formerly known as ISI Emerging Markets) was acquired by Euromoney Institutional Investor PLC in EMIS works from over 15 offices around the world to deliver electronic information products, by subscription, to institutional customers globally. EMIS provides hard-to-get information covering more than 100 emerging markets. Its flagship products are EMIS Intelligence and EMIS Professional. EMIS clients include top investment banks, corporations, law firms, consultants, investment and insurance companies, universities and libraries, multilateral organizations, and others