Subsequent to successful price cuts in its Shanghai and Zhejiang projects, the company began paring property prices in Jiangsu Province. It recently offered discounts in two of its housing projects in Nanjing, the capital of Jiangsu. One of the projects offered a 20% discount for 70-square meter houses, thus, the previous price of RMB 11,500 per square meter was reduced to RMB 8,500.

As of the end of August, eight of the company's housing properties in Shanghai were on sale under the Mid-autumn Day Promotions, providing discounts of between 5% and 20%. Concurrently, another 436 housing units in four other projects in Hangzhou were also discounted for sale.

Certain sources disclosed that the company had long ago formulated the price cut scheme for its businesses in the Changjiang Delta Region. Citing a company executive in charge of the Delta Region, the company's move to make decisive and prompt adjustments rather than wait and see was a wise decision following the obvious overall market situation in 1H 2008.

Certain analyst pointed out that those actions were made after careful consideration and taking into account that the company had switched its focus to the Changjiang Delta Region, instead of the Pearl River Delta Region, as the former is more likely to be profitable.

Indeed, the sales figures of the company reflected positive results from its price cut. It sold 474,000 sq. meters of housing and gained sales revenue of RMB 4.07 bln in August, increasing by 114,000 sq. meters and RMB 940 mln from the previous month, but decreased respectively by 32.8% and 35.2% YOY.


Source: Shanghai Securities News

Date: 11 Sept 2008

CN01/RL/JL/BT/KM