China Evergrande offers 30% discount for all properties to boost sales

Chairman Hui Ka Yan said in an internal meeting on Saturday that Evergrande was targeting 100 billion yuan ($14.64 billion) of sales in September and October each.

HONG KONG: China Evergrande Group, the country's No.2 property developer by sales, said it is offering a 30% discount on properties for a month from Monday as it seeks to meet ambitious sales targets.

Chairman Hui Ka Yan said in an internal meeting on Saturday that Evergrande was targeting 100 billion yuan ($14.64 billion) of sales in September and October each, according to a company statement, as it aims for 800 billion yuan worth of 2020 sales and seeks to cut its debt ratio.

Evergrande, which has the largest debt pile among developers in China, would offer additional discounts of up to 12% on developments selling at a slow rate, the company said.

The moves come as China seeks to control the level of liquidity in the real estate market, which has seen a steady recovery from the coronavirus pandemic, on concerns of overheating.

"If we can successfully achieve 200 billion yuan sales during the 'golden and silver months' of September and October, it means...it'll give us a solid base for achieving the 800 billion yuan internal sales target," Evergrande said.

Evergrande posted 450.6 billion yuan in sales in the first eight months of 2020,22% higher than a year ago.

A 22-25% discount and an aggressive online promotion campaign in February and March of this year also helped the firm record bumper transactions as the market suffered from the coronavirus pandemic.

But the increase in sales from the heavy discounts, have come at cost to margins. Evergrande posted last week a core profit of 19.3 billion yuan in the first six months of this year, 36.5% lower than 30.4 billion yuan a year ago. ($1 = 6.8309 Chinese yuan) - Reuters