Zhejiang - Greentown China Holdings Limited

CEO’s Report
Dear Shareholders,
G r e e n t o w n C h i n a H o l d i n g s L i m i t e d
There are always four seasons every year. However, during the six years since 2006, the domestic real estate market has only
experienced summers and winters. From 2009 which represented a mid-summer, 2010 which represented an early winter, to
2011 which represented a frosty winter, Greentown faced up these challenges with an positive attitude and did not complain.
While actively coping with the pressures and impacts of macro-economic tightening policies, Greentown has at the same time
been engaging in self-reflection. We have identified and worked on our shortcomings, repositioned our strategic direction and
creatively redesigned our business development model to ensure that Greentown is well prepared for the boom time ahead and
continues to develop steadily.
2011 Review
Sales: In 2011, Greentown Group recognized total sales revenue of RMB35.3 billion (including contract sales of RMB33.1 billion
and agreement sales of RMB2.2 billion), of which RMB23.3 billion was attributable to the Group . The macroeconomic tightening
measures caused significant impact on the first-tier cities and high-end properties, which suppressed market demand. As such,
the property sales of the Group decreased significantly as compared with the corresponding period of last year. However, it still
ranked among the top ten in terms of the total sales and is recognized as the industry leader in terms of brand recognition and
combined strength.
Project Development: Due to the strict macroeconomic tightening measures and unfavourable market trend, Greentown Group
made a corresponding adjustment on the overall development progress. Our responsive strategies are to lower the development
pace, decrease construction work for new projects and increase the effective use of capital. During 2011, Greentown Group
commenced construction work for new projects with a total GFA of 6.39 million sq.m., representing a shortfall of 29% from the
target set at the beginning of the year. Such adjustment has taken into full consideration of the short and mid-term operating
conditions of each project in order to set a more reasonable development schedule for each project.
Product Service: The Greentown Group insists upon forward-looking positioning, innovative design, quality services and
strives to become a first class brand. Through the commencement of specialized research projects on the third generation
high-rise apartments and townhouses in response to the market demand, it not only diversified the Company’s products but
also won wide recognition and strong support from customers. Meanwhile, Premium Community Service System originated
by Greentown has been widely promoted, and gradually becomes the main support in the residents’ life as well as establishes
a distinguished image in the industry. By organizing quality resources in the community, the Company provides life-cycle
services including junior education, teenage life and senior health services to residents, further enhancing the added value and
competitiveness of the properties.
2012 Outlook
In 2012, China may extend the existing macroeconomic tightening measures in order to consolidate the result of the measures.
Therefore, it is relatively difficult for the real estate industry to undergo a significant change. After a 10-year golden age,
commodity properties is transforming into a housing system with separate tiers and categories. If the real estate industry is to
get through these difficult situations and continues to develop in a sustainable manner, it must implement systematic revolution
and transformation in order to conform with the market demand and sequence. All staff of the Company are mentally and
physically well-prepared to face the future operating condition, particularly in sales and financing. Furthermore, we must
pay close attention to the basic national conditions in China with in-depth consideration and research. We also have to put
more efforts into optimizing the development strategies of the Company, as well as to consolidate and upgrade the Company’s
fundamental industry proficiency.
Sales: The active land purchasing and expansion strategy the Group pursued in the past resulted in the Group’s saleable housing
resources of approximately RMB133.0 billion. Despite the strict purchase restriction policy and assuming that the absorption
rate is only 30%, the sales revenue still amounted to approximately RMB40.0 billion. Given the material effect on customers’
application for mortgage loan due to the implementation of the purchase restrictions, customers who prefer high-end properties
may opt for one-off payment which will benefit the Group from a cash flow perspective. At the same time, the Company is
promoting the “agency model”, which emphasizes “sales among all people”. The Group will actively promote the transformation
of marketing, so as to boost sales growth under difficult business conditions.
Cost Control: Greentown Group insists on maintaining high product quality and satisfying various consumers’ needs by
excellent product quality. However, the Company also clearly recognizes the importance of cost control, and has employed well-
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