China Evergrande Group (恒大集團) yesterday began a nationwide sales promotion with its deepest-ever discount on all real-estate properties, part of the developer’s effort to boost sales and meet its target of cutting debt by half.
The promotion on residential real estate comes with a 30 percent price cut, according to a statement from the property developer.
That is the heaviest base discount Evergrande has ever offered since it began a signature promotion twice a year in 2011, according to Bloomberg calculations based on previous marketing material.
The sales campaign is to last until Oct. 8, which marks the end of China’s weeklong national holiday. While Evergrande routinely offers discounts during holidays when Chinese tend to shop for apartments, the promotion has also come earlier this year.
Last week, Evergrande vowed to increase sales as part of its efforts to meet an aggressive deleveraging target — cutting borrowings by about 150 billion yuan (US$22 billion) each year from this year to 2022, or about half its current debt load.
So far it has fallen short of the pledge. Total debt rose 4 percent to 835 billion yuan as of June 30, compared with 800 billion yuan at the end of last year, according to its most recent earnings report.
Hui Ka Yan (許家印), chairman of the builder and electric-vehicle developer, announced a monthly sales target of at least 100 billion yuan for this month and next month during an internal meeting at 10pm on Sunday to mobilize staff.
He described the monthly goal, which would be the biggest-ever among Chinese developers, as a “military order,” according to the company’s statement.
The move also came after China’s housing watchdog and the central bank created draft rules to monitor developers’ capital last month. The proposal might lead to a tightening of overall financing, S&P Global Ratings said.
“I would call it neutral or slightly positive, depending on the outcome,” Loomis Sayles Investments Asia Pte Ltd senior credit analyst Feng Zhi Wei (馮之瑋) said. “Evergrande needs high asset turnover and needs to act in advance since China is tightening policies again.”
However, some market watchers are skeptical whether the price cuts would be as deep as described. Local authorities in China usually control housing price through so-called “pre-sales permits,” and might have a say in the final offering price.
“Evergrande likes to use discount marketing strategy,” said Tan Songheng, head of fixed income at Bank of Sanxiang Co (三湘銀行) in Hunan Province. “Maybe it can first pull up the prices, and then give a 30 percent discount. Time will test the authenticity of this announcement.”
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
STABLE DEMAND: Delta supplies US clients in the aerospace, defense and machinery segments, and expects second-half sales to be similar to the first half Delta Electronics Inc (台達電) expects its US automation business to remain steady in the second half, with no signs of weakening client demand. With demand from US clients remaining solid, its performance in the second half is expected to be similar to that of the first half, Andy Liu (劉佳容), general manager of the company’s industrial automation business group, said on the sidelines of the Taiwan Automation Intelligence and Robot Show in Taipei on Wednesday. The company earlier reported that revenue from its automation business grew 7 percent year-on-year to NT$27.22 billion (US$889.98 million) in the first half, accounting for 11 percent
RSS