October 9, 2009 Evergrande Real Estate Group Limited

March 1, 2010

ACTION Buy Evergrande Real Estate Group (3333.HK) Return Potential: 29% Scalability potential not priced in; initiate with a Buy rating

Source of opportunity Investment Profile We believe that Evergrande’s current valuation does not price in the scalability Low High potential of the company on the back of its: (1) strong balance sheet with optimal Growth Growth Returns * Returns * debt structure post its recent IPO and overseas note issuance; (2) attractive land Multiple Multiple bank portfolio located in 17 key municipalities and provincial capitals throughout Volatility Volatility China, with an average land cost of only 9% of 2009 ASP; (3) a standardized Percentile 20th 40th 60th 80th 100th Evergrande Real Estate Group (3333.HK) operation and product line that helps reduce execution risks during times of rapid Asia Pacific Property Peer Group Average scale expansion; and (4) a seasoned management team that is highly motivated * Returns = Return on Capital For a complete description of the investment profile measures please refer to to achieve its growth targets. We initiate coverage on Evergrande with a Buy the disclosure section of this document. rating and a 12-month NAV-based TP of HK$4.15.

Catalyst Key data Current Price (HK$) 3.21 (1) We expect stronger-than-peers property sales performance to be achieved by 12 month price target (HK$) 4.15 Market cap (HK$ mn / US$ mn) 48,150.0 / 6,202.2 Evergrande through: (a) providing affordable, quality-competitive, mid-end Foreign ownership (%) -- properties to capitalize on the fast growing housing upgrade needs of less developed provincial capitals in China, and (b) setting asset turnover rather than 12/08 12/09E 12/10E 12/11E EPS (Rmb) 0.21 0.07 0.52 0.59 margin expansion as the business objective in a policy tightening environment, EPS growth (%) (53.9) (65.8) 630.7 13.9 which we think is practical. (2) We expect a big wave of land bank replenishment EPS (diluted) (Rmb) 0.21 0.07 0.52 0.59 EPS (basic pre-ex) (Rmb) 0.21 0.07 0.52 0.59 from Evergrande given its 2010 completion target of GFA 8mn sqm. With a P/E (X) 13.6 39.7 5.4 4.8 P/B (X) 0.9 3.5 2.2 1.6 possible slowdown in China’s property/land market due to government EV/EBITDA (X) NM 25.4 3.5 2.6 tightening, we believe Evergrande should be able to conclude these land Dividend yield (%) 1.8 0.3 1.8 2.1 ROE (%) 11.8 10.6 50.4 38.7 acquisitions at a favorable, NAV accretive price.

Valuation Price performance chart 5.0 80 The stock is currently trading at a 47% discount to our end-2010E NAV estimate of 4.8 75 4.6 70 HK$5.93, 3% below our bear-case NAV estimate of HK$3.21, 5.3X 2010E P/E, vs. 4.4 65 H-share peers’ average 39% discount, 12% premium to our bear-case NAV and 4.2 60 4.0 55 11.5X 2010 P/E. We set our 12-month target price at a 30% discount to end-2010E 3.8 50 NAV, implying 29% upside potential. 3.6 45 3.4 40 3.2 35 3.0 30 Key risks Feb-09 Jun-09 Sep-09 Dec-09 Key risks include execution slippage and a macro hard landing. Evergrande Real Estate Group (L) MSCI China (R)

INVESTMENT LIST MEMBERSHIP Share price performance (%) 3 month 6 month 12 month Absolute (21.7) -- -- Asia Pacific Buy List Rel. to MSCI China (15.4) -- --

Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 2/26/2010 close. Coverage View: Attractive China: Real Estate

Yi Wang, CFA Beijing Gao Hua Securities Company Limited and its affiliates do and +86(21)2401-8930 | [email protected] Beijing Gao Hua Securities Company Limited seek to do business with companies covered in its research reports. As Vicky Li a result, investors should be aware that the firm may have a conflict of +86(21)2401-8926 | [email protected] Beijing Gao Hua Securities Company Limited interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For analyst certification, see the end of the text. Other important disclosures follow the Reg AC certification, or contact your investment representative.

Beijing Gao Hua Securities Company Limited Investment Research Goldman Sachs (Asia) L.L.C. Equity Research 1 October 9, 2009 Evergrande Real Estate Group Limited

Evergrande Real Estate Group: Summary financials

Profit model (Rmb mn) 12/08 12/09E 12/10E 12/11E Balance sheet (Rmb mn) 12/08 12/09E 12/10E 12/11E

Total revenue 3,606.8 5,410.7 41,346.8 40,857.6 Cash & equivalents 749.7 12,580.4 13,104.4 13,048.6 Cost of goods sold (2,124.4) (3,346.9) (26,560.6) (23,056.5) Accounts receivable 4,790.1 4,490.0 4,041.0 3,636.9 SG&A (1,210.6) (1,649.0) (1,946.9) (2,183.5) Inventory 19,934.2 33,441.4 36,643.2 35,149.2 R&D ------Other current assets 0.0 0.0 0.0 0.0 Other operating profit/(expense) 539.6 1,248.8 50.0 50.0 Total current assets 25,474.0 50,511.8 53,788.6 51,834.7 EBITDA 811.4 1,663.6 12,889.4 15,667.7 Net PP&E 450.1 611.4 771.3 928.9 Depreciation & amortization (24.1) (67.9) (85.7) (103.2) Net intangibles 0.0 0.0 0.0 0.0 EBIT 787.3 1,595.7 12,803.7 15,564.4 Total investments 1,992.3 3,446.8 4,855.0 6,112.5 Interest income 34.5 11.2 188.7 196.6 Other long-term assets 606.2 636.5 668.3 701.8 Interest expense (15.4) (57.2) (70.6) (66.5) Total assets 28,522.6 55,206.5 60,083.3 59,577.9 Income/(loss) from uncons. subs. 0.0 0.0 0.0 0.0 Others 160.0 1.9 19.7 37.2 Accounts payable 4,469.2 3,667.8 4,365.8 4,638.7 Pretax profits 966.4 1,551.7 12,941.5 15,731.7 Short-term loans 6,213.8 8,213.8 6,458.5 1,458.5 Income tax (334.0) (406.8) (4,595.3) (6,231.1) Other current liabilities 4,578.5 26,275.3 19,511.2 15,111.2 Minorities (107.7) (77.8) (549.2) (619.8) Total current liabilities 15,261.5 38,157.0 30,335.6 21,208.4 Long-term debt 4,226.4 4,226.4 9,348.9 9,348.9 Net income pre-preferred dividends 524.8 1,067.1 7,796.9 8,880.7 Other long-term liabilities 451.5 460.6 469.8 479.2 Preferred dividends 0.0 0.0 0.0 0.0 Total long-term liabilities 4,677.9 4,687.0 9,818.7 9,828.1 Net income (pre-exceptionals) 524.8 1,067.1 7,796.9 8,880.7 Total liabilities 19,939.5 42,844.0 40,154.3 31,036.5 Post-tax exceptionals 0.0 0.0 0.0 0.0 Net income 524.8 1,067.1 7,796.9 8,880.7 Preferred shares 0.0 0.0 0.0 0.0 Total common equity 8,261.9 11,963.5 18,980.7 26,973.4 EPS (basic, pre-except) (Rmb) 0.21 0.07 0.52 0.59 Minority interest 321.3 399.1 948.3 1,568.1 EPS (basic, post-except) (Rmb) 0.21 0.07 0.52 0.59 Total liabilities & equity 28,522.6 55,206.5 60,083.3 59,577.9 EPS (diluted, post-except) (Rmb) 0.21 0.07 0.52 0.59 BVPS (Rmb) 3.27 0.80 1.27 1.80 DPS (Rmb) 0.05 0.01 0.05 0.06 RNAV (Rmb mn) -- 64,792.9 76,472.2 -- Dividend payout ratio (%) 23.9 10.0 10.0 10.0 RNAVPS (Rmb) -- 4.32 5.10 -- Free cash flow yield (%) NM 20.5 (2.9) 16.8

Growth & margins (%) 12/08 12/09E 12/10E 12/11E Ratios 12/08 12/09E 12/10E 12/11E Sales growth 13.9 50.0 664.2 (1.2) ROE (%) 11.8 10.6 50.4 38.7 EBITDA growth (58.0) 105.0 674.8 21.6 ROA (%) 2.1 2.5 13.5 14.8 EBIT growth (58.9) 102.7 702.4 21.6 ROACE (%) 4.1 7.7 47.4 38.4 Net income growth (51.5) 103.3 630.7 13.9 Inventory days 2,639.2 2,910.5 481.6 568.3 EPS growth (53.9) (65.8) 630.7 13.9 Receivables days 574.9 313.0 37.7 34.3 Gross margin 41.1 38.1 35.8 43.6 Payable days 744.2 443.7 55.2 71.3 EBITDA margin 22.5 30.7 31.2 38.3 Net debt/equity (%) 112.9 (1.1) 13.6 (7.9) EBIT margin 21.8 29.5 31.0 38.1 Interest cover - EBIT (X) NM 34.7 NM NM

Cash flow statement (Rmb mn) 12/08 12/09E 12/10E 12/11E Valuation 12/08 12/09E 12/10E 12/11E Net income pre-preferred dividends 524.8 1,067.1 7,796.9 8,880.7 P/E basic (X) 13.6 39.7 5.4 4.8 D&A add-back 24.1 67.9 85.7 103.2 P/B (X) 0.9 3.5 2.2 1.6 Minorities interests add-back 107.7 77.8 549.2 619.8 EV/EBITDA (X) NM 25.4 3.5 2.6 Net (inc)/dec working capital (4,945.3) 7,707.3 (9,492.0) (2,337.4) Dividend yield (%) 1.8 0.3 1.8 2.1 Other operating cash flow (897.4) 9.0 9.2 9.4 Cash flow from operations (5,186.3) 8,929.2 (1,050.9) 7,275.7 Underlying valuation 12/08 12/09E 12/10E 12/11E Capital expenditures (168.9) (229.2) (245.5) (260.9) Underlying profit (Rmb mn) 474.1 443.8 7,796.9 8,880.7 Acquisitions 0.0 0.0 0.0 0.0 Underlying EPS (Rmb) 0.19 0.03 0.52 0.59 Divestitures 0.0 0.0 0.0 0.0 Others 33.5 (1,484.9) (1,440.1) (1,290.9) Underlying ROE (%) 10.7 4.4 50.4 38.7 Cash flow from investments (135.4) (1,714.1) (1,685.6) (1,551.8) Underlying ROA (%) 1.9 1.1 13.5 14.8 Underlying ROACE (%) 3.8 3.6 47.4 38.4 Dividends paid (common & pref) (0.7) (125.7) (106.7) (779.7) Underlying P/E (X) 15.0 95.4 5.4 4.8 Inc/(dec) in debt 1,078.9 2,000.0 3,367.2 (5,000.0) Underlying dividend payout (%) 26.5 24.0 10.0 10.0 Common stock issuance (repurchase) 3,386.1 2,741.3 0.0 0.0 Underlying EPS growth (%) (26.6) (84.2) 1,656.7 13.9 Other financing cash flows (33.9) 0.0 0.0 0.0 Cash flow from financing 4,430.5 4,615.6 3,260.5 (5,779.7) Total cash flow (891.1) 11,830.7 524.0 (55.7) Note: Last actual year may include reported and estimated data. Source: Company data, Goldman Sachs Research estimates.

Analyst Contributors

Yi Wang, CFA [email protected]

Vicky Li [email protected]

Goldman Sachs (Asia) L.L.C. Equity Research 2 October 9, 2009 Evergrande Real Estate Group Limited

Table of contents

Investment view: Scalability potential not priced in 3 Valuation 4

Risks to our view: Execution and macroeconomic changes 9

Earnings drivers: Volume growth and margin recovery 12

Competitive analysis: Attractive land bank and a standardized operation 16

Financial strengths and weaknesses: Strong financial position to fuel land bank replenishment 23 Company profile and strategy 25 Appendix 30 Disclosures 35

The prices in the body of this report are based on the market close of February 25, 2010.

Investment view: Scalability potential not priced in

Right product and geographical focus to ensure rapid scale expansion Evergrande is looking to transform itself from a large-scale Guangdong developer into a leading national homebuilder in a much shorter time frame than it took the current market leaders to build out their businesses.

In order to achieve its business objective, Evergrande has focused its attention on building affordable, quality-competitive, mid-end properties in China’s major provincial capitals. Since late 2006, Evergrande has steadily built up a large-scale (GFA 51mn sqm), cost- competitive (land cost represents about 9% of its 2009 ASP) land bank in 24 cities, including 17 key municipalities and provincial capitals of China. We expect higher income growth in these provincial capitals than other Tier-2 or Tier-3 cities within the provinces, to drive more rapid housing market development and thus the company’s future earnings growth.

A standardized operation and product line to help reduce execution risks In addition to identifying the right product and geographical focus, we believe Evergrande’s strategy of: (1) establishing alliances with industry professionals that specialize in different aspects along the property development chain; and (2) standardizing its operating process and product series, will help the company to reduce its execution risks and achieve economies of scale.

At the sweet spot for land bank replenishment Evergrande’s objective is to complete projects totaling GFA 8mn sqm this year. This means that the company needs to replenish at least the same size of projects in order to keep its rolling land bank size at a minimum GFA 50mn sqm as targeted by company management. We believe that recent measures by the government to tighten China’s property/land market, particularly the measures directed at the land market should help slow land price appreciation. This should enable Evergrande to replenish its land bank at a favorable, NAV accretive price.

Goldman Sachs (Asia) L.L.C. Equity Research 3 October 9, 2009 Evergrande Real Estate Group Limited

We estimate 17-fold yoy growth of underlying profit in 2010E, driven by volume expansion We expect a 6% yoy decline in underlying profit in 2009E due to margin deterioration (underlying profit margin down to 8% from 13% in 2008), followed by a 17-fold yoy increase in 2010E, mainly driven by volume growth and a recovery in net margins. We estimate that 100% and 66% of our 2009E/2010E revenue estimates were locked in through presales in 2009.

Risks: Execution and macroeconomic changes We believe Evergrande faces execution risks brought on by the rapid pace of expansion the company has undertaken over the past two years (in an effort to increase its completion scale from GFA 460k sqm in 2008 to almost 8mn sqm in 2010E). We believe any execution slippage will lead to higher earnings fluctuations and/or lower investment returns than its peers.

We believe Evergrande, which could be more managerially challenged than its peers, is likely to have to face bigger-scale execution risks than its peers should the macroeconomic backdrop deteriorate significantly.

Valuation

We estimate 2010E NAV of HK$5.93/share, one single project (Qidong) accounts for 25% of total gross asset value (GAV) We estimate Evergrande’s end-2010E NAV at HK$5.93/share, based on its existing land bank. We assume a 10% price increase from the average level in 2009 for 2010E (or about a 10% decline from its current level), a 10% per year increase for 2011E and 2012E, respectively, and flat thereafter.

As illustrated in Exhibit 1, similar to many other developers in our coverage universe, Evergrande is mainly focused on developing and selling residential properties.

Exhibit 1: Estimated 2010E GAV by product type

Development propertiesInvestment properties Total end-10E GAV

(mn Rmb) (%) (mn Rmb) (%) (mn Rmb) (%) Residential 73,180 88% 0 0% 73,180 88% Office 188 0% 0 0% 188 0% Retail 4,493 5% 986 1% 5,478 7% Hotel 0 0% 1,884 2% 1,884 2% Car Parks 2,410 3% 281 0% 2,692 3% Gross asset value 80,270 96% 3,151 4% 83,421 100% Add: Net cash/(debt) as of end-2008 (9,691) IPO proceeds 2,741 End-10E NAV 76,472 Forward exchange rate (HK$/Rmb) 0.86 No. of outstanding shares, diluted (mn) 15,000 NAV/share (HK$) 5.93

Source: Gao Hua Securities Research estimates.

Meanwhile, we estimate Evergrande has the highest NAV concentration of all leading nationwide homebuilders in one single project – Evergrande Qidong project (see details in the Appendix), which accounts for 25% of our estimated end-2010E GAV for the company.

Goldman Sachs (Asia) L.L.C. Equity Research 4 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 2: Qidong project accounts for 25% of our total GAV estimate for the company End-2010E GAV breakdown by city

Others, 24% Qidong, 25%

Changsha, 4%

Guangzhou, 9% Baotou, 5%

Qingyuan, 5% Chongqing, 7% Shenyang, 5%

Wuhan, 6% Chengdu, 6% Luoyang, 6%

Note: Pengshan is included in Chengdu. Others include: Nanjing (provincial capital of Jiangsu), Taiyuan (provincial capital of Shanxi), Nanchang (provincial capital of Jiangxi), Zhengzhou (provincial capital of Henan), Xi’an (provincial capital of Shaanxi), Shijiazhuang (provincial capital of Hubei), E'Zhou (adjacent to Wuhan), Hefei (provincial capital of Anhui), Kunming (provincial capital of Yunnan), Tianjin (municipality), Nanning (provincial capital of Guangxi), Foshan (adjacent to Guangzhou), Guiyang (provincial capital of Guizhou).

Source: Gao Hua Securities Research estimates.

Our 12-month target price of HK$4.15 is set at a 30% discount to our end-2010E NAV estimate We think R&F and Country Garden are Evergrande’s closest comparables given the similarities that exist in terms of their nationwide geographical exposure, product focus, and the point at which they all are in their respective business development cycles.

Goldman Sachs (Asia) L.L.C. Equity Research 5 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 3: Evergrande is currently trading at a 47% discount to its 2010E NAV, 5.3X 2010E EPS, and 2.2X 2010E P/B, vs. H-share peers’ 39% discount, 11.5X, and 1.4X Valuation comparison between listed Chinese developers

EPS End-10E Share price Growth Company Ticker Price as of -2% FD Core P/E (x) (%) P/B(x) Mkt existing (disc)/prem Cap 12 mth Potential NAV per to 10E (US$ Price upside/ share potential Bear-case Worst-case 09E - bn) Rating 25/Feb/10 target downside (LCY) NAV (%) valuation valuation 08 09E 10E 11E 11E 08 09E 10E 11E Evergrande 3333.HK 6.1 Buy 3.16 (HK$) 4.15 31% 5.93 (47) 3.21 1.82 15.0 95.1 5.3 4.7 347% 0.9 3.5 2.2 1.5

Hong Kong Listed Agile Property 3383.HK 4.7 Buy 9.80 (HK$) 12.88 31% 16.10 (39) 8.20 4.56 6.0 16.2 11.4 9.2 31% 2.5 2.4 1.9 1.7 China Overseas Land 0688.HK 16.5 Neutral 15.40 (HK$) 17.37 13% 19.30 (20) 12.11 8.76 30.2 18.9 14.0 11.2 30% 3.7 3.1 2.6 2.2 China Resources Land 1109.HK 10.4 Sell 16.02 (HK$) 15.84 -1% 19.81 (19) 11.06 7.80 39.8 25.0 23.3 16.0 25% 2.2 1.9 1.8 1.7 Country Garden 2007.HK 5.5 Neutral 2.64 (HK$) 3.05 16% 3.81 (31) 2.01 1.09 27.8 17.2 13.4 12.4 17% 2.0 1.8 1.6 1.5 Fantasia 1777.HK 1.1 Buy* 1.70 (HK$) 2.63 54% 3.75 (55) 2.10 1.66 23.3 21.7 5.1 5.0 107% 1.6 2.0 1.5 1.2 Franshion 0817.HK 2.8 Neutral 2.53 (HK$) 2.82 11% 3.13 (19) 2.31 1.65 19.9 24.6 17.8 20.4 10% 1.5 1.4 1.3 1.2 Greentown China 3900.HK 2.1 Sell 9.92 (HK$) 10.62 7% 17.69 (44) 7.36 4.11 25.3 9.4 8.5 7.4 12% 1.7 1.4 1.2 1.1 Guangzhou R&F Property 2777.HK 4.7 Buy* 11.32 (HK$) 15.54 37% 22.20 (49) 9.89 6.21 16.0 12.5 8.8 7.1 32% 2.2 2.0 1.6 1.4 KWG 1813.HK 1.9 Neutral 5.12 (HK$) 5.89 15% 8.42 (39) 3.92 2.31 30.5 18.6 12.1 10.7 31% 1.4 1.3 1.1 1.0 Powerlong 1238.HK 1.1 Buy 2.09 (HK$) 2.96 42% 4.94 (58) 2.86 2.02 25.2 6.2 5.5 4.9 12% 2.8 1.1 0.8 0.7 Shanghai Forte Land 2337.HK 0.7 Neutral 2.05 (HK$) 2.41 18% 3.45 (40) 1.90 0.92 13.1 11.6 4.1 6.6 32% 0.9 0.8 0.7 0.7 Shenzhen Investment 0604.HK 1.2 Sell* 2.73 (HK$) 2.83 4% 4.71 (42) 2.18 1.25 13.1 11.4 9.3 8.7 14% 0.8 0.8 0.7 0.7 Shimao Property 0813.HK 5.9 Buy 12.78 (HK$) 16.35 28% 20.43 (37) 9.78 6.38 40.3 13.3 10.5 8.6 24% 2.0 1.7 1.5 1.3 Shui On Land 0272.HK 2.6 Neutral 3.74 (HK$) 4.63 24% 6.62 (43) 4.18 2.32 7.2 14.7 29.3 18.1 -11% 0.9 0.8 0.8 0.7 Sino Ocean 3377.HK 4.9 Buy 6.83 (HK$) 8.45 24% 10.56 (35) 6.20 3.76 19.6 26.2 13.3 11.6 49% 1.6 1.4 1.3 1.2 SOHO China 0410.HK 2.7 Neutral 3.67 (HK$) 4.38 19% 6.25 (41) 4.29 3.51 42.7 10.5 4.8 7.4 18% 1.2 1.2 1.0 0.9 Simple average 22% (39) 23.2 20.8 11.6 10.0 46% 1.8 1.7 1.4 1.2

A/B-share listed China Merchants Property (A) 000024.SZ 5.8 Neutral 23.00 (Rmb) 26.16 14% 37.37 (38) 22.20 18.90 32.2 22.5 16.6 14.8 23% 2.7 2.4 2.1 1.9 China Vanke (A) 000002.SZ 15.3 Buy 9.48 (Rmb) 12.47 32% 13.85 (32) 8.38 5.91 25.8 20.8 15.3 10.4 41% 3.3 2.9 2.5 2.0 China Vanke (B) 200002.SZ 1.6 Buy 8.22 (HK$) 11.27 37% 16.11 (49) 9.74 6.87 19.9 16.0 11.6 7.9 41% 2.5 2.2 1.9 1.6 China World Trade Center 600007.SS 1.7 Sell 11.31 (Rmb) 8.49 -25% 12.13 (7) 7.88 6.06 32.1 37.3 35.8 34.4 4% 2.7 2.6 2.4 2.3 Financial Street 000402.SZ 3.9 Neutral 10.76 (Rmb) 12.20 13% 15.25 (29) 11.63 9.20 24.6 26.7 13.6 12.4 47% 1.8 1.7 1.6 1.4 Huafa 600325.SS 1.9 Neutral 16.08 (Rmb) 19.82 23% 28.31 (43) 12.22 9.49 20.2 17.9 14.9 12.5 19% 2.9 2.6 2.3 2.0 Gemdale Corp. 600383.SS 4.6 Buy 12.71 (Rmb) 17.45 37% 21.81 (42) 10.33 7.03 33.0 24.1 16.8 14.8 28% 3.0 2.2 2.0 1.8 Overseas Chinese Town 000069.SZ 7.0 Neutral 15.37 (Rmb) 18.81 22% 23.51 (35) 13.60 10.70 33.6 25.3 18.8 15.1 29% 5.1 4.4 3.7 3.2 Poly Real Estate 600048.SS 10.3 Buy 19.96 (Rmb) 25.51 28% 28.34 (30) 16.00 9.15 28.4 20.0 15.3 12.3 27% 4.5 2.8 2.4 2.1 Simple average 20% (34) 27.8 23.4 17.6 15.0 29% 3.2 2.6 2.3 2.0

Singapore listed Yanlord YNLG.SI 2.9 Buy 1.77 (S$) 2.30 30% 2.88 (38) 1.65 1.16 21.0 16.7 13.0 10.6 26% 1.7 1.4 1.3 1.2 US listed E-House EJ 1.4 Buy 17.66 (US$) 22.78 29% NA NA 15.08 8.62 36.8 14.5 12.9 10.5 17% 3.6 1.8 1.7 1.5

Simple average of above 22% (37) 25.1 21.2 13.6 11.6 39% 2.3 2.0 1.7 1.5 Notes: (1) *Indicates the stock is on our Regional Conviction List. (2) Our 12-month target prices are based on end-2010E NAV. For important disclosures, please go to http://www.gs.com/research/hedge.html. For methodology and specific risks associated with our target prices, please see our previously published research. (3) Base-case: We assume a 5%-10% price increase from the average level in 2009 for 2010E (or about a 10% decline from December 2009 level). A 10% per year increase for 2011E and 2012E, respectively, and flat thereafter; 15% volume decrease in 2010 from 2009 level. Bear-case: We assume a 30% reduction in property price from current levels and a 35% fall in volume over 2009. Worst-case: We assume a 45% price fall from current levels and a 35% fall in volume.

Source: Datastream, Company data, Gao Hua Securities Research estimates.

Evergrande’s underlying profit and ROE outlook is similar to that of Guangzhou R&F, in our view That said, as illustrated in Exhibit 4, we note that Evergrande is at a similar stage as R&F in terms of combined contract sales, underlying profit, margins, and ROE levels during 2009E-2011E. We note, however, that R&F is more exposed to Bohai Rim (Beijing and Tianjin) and R&F also has a longer and quite successful track record in expanding outside its home market. In addition, we believe that, as a large-scale developer, R&F has been prudent when it comes to expanding its geographical footprint (Exhibit 10).

Goldman Sachs (Asia) L.L.C. Equity Research 6 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 4: Evergrande and comparables’ financial data

Country Evergrande R&F Garden Vanke COLI CRL Contract sales (Rmb bn) 2009 30 24 23 63 43 25 2010E 36 24 19 73 53 26 2011E 38 23 21 95 58 32

Underlying profit (Rmb mn) 2009E 444 2,607 2,235 5,017 5,961 2,845 2010E 7,797 3,625 2,811 6,819 8,088 3,055 2011E 8,881 4,519 3,040 10,023 10,091 4,437

Underlying profit margin (%) 2009E 8% 13% 14% 9% 17% 18% 2010E 19% 16% 15% 11% 18% 13% 2011E 22% 16% 15% 14% 19% 14%

Asset turnover (X) 2009E 0.13 0.34 0.30 0.43 0.39 0.22 2010E 0.72 0.35 0.31 0.41 0.41 0.26 2011E 0.68 0.41 0.31 0.44 0.44 0.29

Adj. ROE (%) 2009E 4% 22% 10% 10% 18% 8% 2010E 40% 24% 11% 11% 20% 8% 2011E 32% 24% 11% 12% 20% 10%

Net gearing (%) 2009E -1% 92% 51% 14% 14% 36% 2010E 14% 56% 44% -27% -14% 55% 2011E -8% 39% 35% -71% -60% 33%

Note: Adjusted ROE is calculated by using underlying profit divided by shareholders’ equity excluding revaluation gains from investment properties.

Source: Company data, Gao Hua Securities Research estimates.

Evergrande’s land bank scale is similar to Country Garden but with a different geographical focus Country Garden’s land bank size is second to Evergrande as of late 2009 (Exhibit 32). Country Garden is likewise heavily exposed to middle China in much the same way Evergrande is. Evergrande’s ASP in 2009 is also at a similar level to that achieved by Country Garden over the same period.

Exhibit 5: Country Garden’s expansion of land bank Exhibit 6: Blended ASP achieved by Country Garden has also been aggressive is at a similar level to that of Evergrande Land bank balance between 2006 and 2009 ASP comparison between Country Garden and Evergrande

CG land bank (LHS) Evergrande land bank (LHS) Country Garden contracted sales Evergrande contracted sales (mn sqm) CG no.of cities with exposure (RHS) Evergrande no.of cities with exposure (RHS) (Rmb mn) (Rmb Country Garden ASP Evergrande ASP 60 CG no. of projects (RHS) Evergrande no. of projects (RHS) 45,000 54 54 6,962 55 40,000 50 6,358 45 35,000 46 5,313 5,375 44 40 30,000 5,417 5,147 5,069 25,000 4,884 30 30 28 23 20,000 22 24 22 15,000 20 21 19 10,000

10 9 5,000 6

0 0 2008 2009 2010E 2011E 2006 2007 2008 2009 Sep

Source: Company data, Gao Hua Securities Research estimates. Source: Company data, Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 7 October 9, 2009 Evergrande Real Estate Group Limited

That said, we believe there are two main differences between Country Garden and Evergrande: (1) Country Garden’s land bank and near-term earnings are more concentrated in Guangdong. About half of Country Garden’s land bank is located in Guangdong vs. 9% for Evergrande; and (2) most of Country Garden’s land bank is located in the suburban areas of large cities or the city centers of midsized, Tier-3 cities, while Evergrande’s land bank is spread throughout the cities it has chosen for its product series with a higher concentration in provincial capitals or Tier-2 cities.

Exhibit 7: Evergrande has the largest portion of its land bank in middle China Land bank, end-2010E GAV and 2010E gross profit breakdown by region

Country (%) Evergrande R&F Vanke COLI CRL Garden Land bank breakdown YRD 31 3 1 27 17 21 PRD 10 21 49 26 14 7 Bohai Rim 4 22 0 16 16 10 Northern-China 6 0 9 11 34 17 Western China 9 38 1 9 14 31 Mid-China 40 16 40 10 5 15 100 100 100 100 100 100 End-10E GAV breakdown YRD 28 5 1 37 23 35 PRD 14 28 72 30 21 17 Bohai Rim 4 31 0 13 26 17 Northern-China 5 0 9 8 16 9 Western China 14 22 1 6 11 16 Mid-China 36 13 17 6 2 5 100 100 100 100 100 100 2010E gross profit breakdown YRD 2 4 2 46 29 39 PRD 36 50 67 32 22 6 Bohai Rim 14 23 0 7 36 19 Northern-China 8 5 13 6 6 18 Western China 27 11 1 3 5 14 Mid-China 12 7 17 6 1 4

Notes: YRD = Yangtze River Delta, including cities such as Shanghai, Nanjing, Hangzhou, Suzhou, Ningbo. PRD = Pearl River Delta, including cities such as Guangzhou, Shenzhen, Foshan, Zhuhai, Dongguan, Hainan, Fuzhou, Xiamen. Bohai Rim includes cities such as Beijing, Tianjin, Shijiazhuang, Qingdao, Jinan. Northern China includes cities such as Shenyang, Dalian, Anshan, Changchun, Harbin. Middle China includes cities such as Hefei, Taiyuan, Zhengzhou, Luoyang, Xi’an, Wuhan, Changsha, Nanchang, Nanning. Western China includes cities such as Chengdu, Chongqing, Urumqi, Guiyang.

Source: Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 8 October 9, 2009 Evergrande Real Estate Group Limited

Our 12-month target price of HK$4.15 implies an ASP of Rmb5,700/sqm for its entire portfolio, similar to the level it achieved in 3Q09.

Exhibit 8: Steady price appreciation in 2009 on the back of strong volumes GFA sold and ASP comparisons for 2009 and beyond

(mn sqm) GFA sold (LHS) ASP (RHS) (Rmb/sqm) 35 No. of projects selling 10,000

43 30 21 25 32 32 41 41 9,000

25 8,000 7,449 20 6,962 7,000

15 6,325 6,358 28.8

6,000 10 5,483

4,852 5,000 5 4,511 5.7 5.5 0.7 1.5 2.3 1.1 0 4,000 1Q 09 2Q 09 3Q 09 4Q 09 2010E 2011E 2011E afterward

Note: We exclude those mostly completed "Jinbi" series projects in Guangzhou in calculating the number of selling projects.

Source: Company data, Gao Hua Securities Research estimates.

Evergrande is trading below our bear-case valuation, which we view as an attractive entry level

Our bear-case valuation of HK$3.21 (Exhibit 19) is based on the assumption that prices will decline by 30% from end-2009 level, volumes will be 35% below that of 2009 in 2010 (see February 22, 2010, “Reshuffling picks on new risk/reward analysis amid tightening”). Such price assumptions are likely to send the ASP of Evergrande’s portfolio to a similar level of that achieved in 1Q09 when the company struggled, as a result of its over-stretched balance sheet. It was at this time that the company was forced to sell its stock of already built accommodation at knockdown prices in order to survive. In our view, such a scenario is unlikely to repeat itself, given that today Evergrande has a much stronger balance sheet.

Risks to our view: Execution and macroeconomic changes

Although, in our view, the progress of its development pipeline is on track, we believe Evergrande continues to face significant execution risks. We believe that should the company fail to execute projects correctly then it could lead to high earnings volatility and/or low investment returns relative to its more established peers. In addition, we believe Evergrande is likely to have to face bigger-scale execution risks than its peers should the macroeconomic backdrop deteriorate significantly.

Goldman Sachs (Asia) L.L.C. Equity Research 9 October 9, 2009 Evergrande Real Estate Group Limited

Lack of a track record in terms of volume growth; challenges of an expanding footprint

1. Limited track record in expanding scale Between 2004 and 2008 Evergrande achieved low sales volumes compared with established national participants such as COLI and Vanke, in our view (Exhibit 9).

Exhibit 9: Volume growth in GFA sold between 2004 and 2008 has been uninspiring Annual GFA sold of Evergrande, Vanke, and COLI

(k sqm) 9,000 Evergrande Vanke COLI

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0 2004 2005 2006 2007 2008 2009 2010E 2011E

Source: Company data, Gao Hua Securities Research estimates.

2. We expect Evergrande to face significant managerial challenges on the back of aggressive geographical and workforce expansion plans

As indicated in Exhibit 10, no other established national developer has indicated or shown a similarly aggressive expansion plan as that of Evergrande.

We believe that for Evergrande to succeed with such rapid expansion, the company will need to recruit and train new managers and other employees and build its operations and reputation in these new markets within a short period of time as we believe management’s knowledge, experience, and the way it operates in its home market, may not necessarily be easily replicated in new markets.

Goldman Sachs (Asia) L.L.C. Equity Research 10 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 10: It took Vanke and COLI 20 years to build out in 33 cities and 20 cities, respectively; while Evergrande expanded to 24 cities in only four years Incremental no. of cities Evergrande, Vanke, COLI, and R&F have gained exposure to during their development history

No. of cities 36 33 34 32 2009 30 2008 28 2007 24 26 24 2006 20 2008-2009 2009 22 2008 20 2005 2008-2009 18 16 2004 2007 2003 12 14 2007 2006 12 2005 2002 2007-2009 10 2004 1997-2001 8 1996 2003 6 2006 1995 1997-2002 2006 4 2005 1996 2004 1994 2 1994-1995 1995-2003 1998-2005 0 1988-1993 1988-19931994 1997 Vanke COLI R&F Evergrande

Source: Company data, Gao Hua Securities Research estimates.

Exhibit 11: Fast ramp-up of workforce since 2007 No. of employees at Evergrande vs. that of Vanke

(ppl) 4,000 Vanke Evergrande

3,500 3,342 3,344 3,068 3,000 2,715 2,602 2,500

1,924 2,000

1,500 1,181 1,096 1,000

500

0 2005 2006 2007 2008

Note: The calculation of number of employees does not include those engaged in property management.

Source: Company data, Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 11 October 9, 2009 Evergrande Real Estate Group Limited

We estimate that about 83% of Evergrande’s 2010E presale proceeds will come from 38 projects that the company acquired outside its home market of Guangzhou between late 2006 and 2009. We believe any construction and/or presale slippage and completion delays in these new markets may lead to a significant earnings gap.

Exhibit 12: 83% of our estimated 2010E contract sales will come from cities outside its home market of Guangzhou 2010E contract sales breakdown by city

Guangzhou, 17%

Others, 26%

Changsha, 11%

Taiyuan, 4%

Xian, 5% Chongqing, 8%

Hefei, 5% Wuhan, 7% Nanchang, 6% Shijiangzhuang, 6% Chengdu, 6%

Note: Pengshan project is included in Chengdu; Others include Nanning (provincial capital of Guangxi), Nanjing (provincial capital of Jiangsu), Shenyang (provincial capital of Liaoning), Qingyuan (city in Guangdong Province), Tianjin (municipality), Baotou (city in Inner Mongolia), Luoyang (provincial capital of Henan), E'Zhou (adjacent to Wuhan), Guiyang (provincial capital of Guizhou), Kunming (provincial capital of Yunnan), Qidong (City in Jiangsu Province), Foshan (adjacent to Guangzhou), Zhengzhou (provincial capital of Henan).

Source: Gao Hua Securities Research estimates.

In our view, developers that are overly stretched managerially are more likely to feel the pain during a downturn Although our Global ECS Research team expects 11.4% yoy real GDP growth in 2010E, any unexpected missteps or tightening in lending, fiscal or monetary-related policies may have a significant effect on housing demand. We believe Evergrande, which is more managerially challenged than its peers, is likely to have to face bigger-scale execution risks than its peers should the macroeconomic backdrop deteriorate significantly.

Earnings drivers: Volume growth and margin recovery

For the year ended December 31, 2009, Evergrande achieved contract sales totaling Rmb30.3bn, a record-high in terms of the company’s development history, which helped ease the financial pressure stemming from its expansionary business practices since 2007. We expect a 6% yoy decline in underlying profit in 2009E due to margin deterioration (underlying profit margin (i.e. excluding revaluation gains on investment

Goldman Sachs (Asia) L.L.C. Equity Research 12 October 9, 2009 Evergrande Real Estate Group Limited

properties) down to 8% from 13% due to rising land costs) followed by a 17-fold yoy increase in 2010E, mainly driven by volume growth and a recovery in net margins.

66% of our 2010E revenue booking forecast has been locked in, above the average level of our coverage universe On the back of strong sales and steady price increases achieved by Evergrande in 2009 (up to December, the average selling price for its portfolio has appreciated 35% from the January 2009 level), we estimate that 100% and 66% of our 2009E and 2010E revenue estimates, respectively, have already been locked in.

This is above our average of 57% that we estimate for the sector as a whole. In addition, we expect Evergrande to further boost its sales performance in 2010E given that the company targets new launches this year totaling GFA 10.2mn sqm. Company management also indicated that it has no intention of further increasing its ASP over the near term but instead is looking to achieve increased volume growth (or asset turnover). We believe this strategy is more practical than focusing purely on margin expansion given the government’s current policy tightening measures, which are designed to slow the pace at which property prices appreciate.

Exhibit 13: Total GFA 10.2mn sqm to be launched in 2010E including 9 new projects vs. 6.0mn sqm launched in 2009 Presale launch during October 2007-2010E

(k sqm) 5,000

41 projects will be selling in 22 cities 4,500 Total GFA 10.2mn sqm to be launched including 9 new 32 projects are selling in 18 cities 4,000 projects in 4 cities

3,500 Total GFA 6.0mn sqm launched in 2009 including 14 new projects in 7 cities 3,000 2,738 27 projects were selling in 11 cities 2,500 2,353 2,238 Total GFA 2.8mn 2,000 sqm launched including 16 new 1,645 1,603 projects in 11 cities 1,500 9 projects 1,181 were selling 1,069 1,000 in 2 cities 727 683 563 527 500 344 373 401 309 291 303 269285 193 253 227 169 127175 67 102 4 0 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10E Apr-10E Jul-10E Oct-10E

Note: We exclude those mostly completed "Jinbi" series projects in Guangzhou in calculating the number of selling projects for 2009-2010E.

Source: Company data, Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 13 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 14: We estimate Evergrande’s 2010E contract sales to be Rmb36bn, a 19% yoy rise from 2009 level, which is comparable to the growth rate we estimated for Vanke Contract sales comparison between Vanke and Evergrande

(Rmb mn) 100,000 Evergrande Vanke

90,000

80,000 Vanke 09-11E 22% CAGR 70,000

60,000

50,000

40,000 Evergrande 09-11E 12% CAGR

30,000

Vanke 04-06 20,000 CAGR 52%

10,000

0 2004 2005 2006 2007 2008 2009 2010E 2011E

Source: Company data, Gao Hua Securities Research estimates.

Volume growth is the key driver of exponential earnings growth in 2009E-2010E As discussed earlier, volume growth will be the key earnings driver for 2009E-2010E, in our view. As illustrated in Exhibit 15, we expect the company to book GFA 0.96mn sqm and 8.02mn sqm, representing a 1.7-fold and 7.4-fold yoy increase, respectively in 2009E-2010E or an average of 106% presale to completion compared with 126% that the company achieved for most of the projects that it developed in the past. Meanwhile, given that we expect residential prices in 2010E to increase by 10% from average 2009 levels for Evergrande, we estimate gross margins to expand for individual projects. However, due to higher contributions from lower-margin projects in 2010E, gross margin is likely to decline by 2ppts from 2009E levels.

Goldman Sachs (Asia) L.L.C. Equity Research 14 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 15: We estimate booked GFA will grow 1.7-fold Exhibit 16: Margins peaked in 2008 for its property and 7.4-fold yoy, respectively in 2009E and 2010E development business GFA of projects completed (to be completed) and booked (to Average selling price booked (to be booked) and gross be booked), 2004-2011E margins, 2004-2011E

(k sqm) (RMB/sqm) GFA completed GFA booked 12,000 12,000 Booked ASP (LHS) 50% 10,934 Gross margin (RHS) 45% 10,000 10,000 40% 8,335 8,022 35% 8,000 8,000

6,617 30%

6,000 6,000 25%

20%

4,000 4,000 15%

2,344 10% 2,000 2,000 958 5% 430338 340296 400378 428432 460355 0 0 0% 2004 2005 2006 2007 2008 2009E 2010E 2011E 2004 2005 2006 2007 2008 2009E 2010E 2011E

Source: Company data, Gao Hua Securities Research estimates. Source: Company data, Gao Hua Securities Research estimates.

Exhibit 17: Rising land cost to be booked is the main Exhibit 18: Higher portion of lower-margin projects reason for margins to decline in 2009E contribution is the main reason for margins to decline in Land cost for GFA sold (to be sold) and booked (to be 2010E booked), 2006-2011E Property sales revenue breakdown by product grade

GFA sold (LHS) GFA booked (LHS) Gross margin of projects' revenue booked distribution (k sqm) Avg land cost of GFA sold (RHS) Avg land cost of GFA booked (RHS) (Rmb/sqm) (%) Below 20% 20%-25% 25%-30% 30%-35% Above 35% 9,000 900 100% 800 90% 8,000 760 800 702 80% 772 46% 7,000 700 70% 607 702 686 68% 71% 6,000 600 60% 597 5,000 500 50% 16% 40% 4,000 400 337 328 4% 30% 3% 376 3,000 300 4% 17% 4% 13% 20% 282 2,000 200 21% 10% 17% 12% 2% 1,000 100 0% 2% 2009E 2010E 2011E 0 0 2006 2007 2008 2009E 2010E 2011E

Source: Company data, Gao Hua Securities Research estimates. Source: Gao Hua Securities Research estimates.

2010E earnings are sensitive to property price and volume fluctuations Our base-case 2010E earnings forecast assumes Evergrande’s property prices will appreciate 10% from average 2009 levels. All things being equal, in our bear-case scenario, if property prices fall 30% from their current level and volume falls 35% then Evergrande’s 2010E underlying profit would fall by 24% to Rmb5,889mn, according to our sensitivity analysis. Similarly, in our worst-case scenario, if the average selling price for all the projects fall by 45% from their current level and volume falls by 35%, we estimate there would be 38% downside potential from our base-case earnings forecast.

Goldman Sachs (Asia) L.L.C. Equity Research 15 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 19: Evergrande sensitivity estimates in relation to property price and volume changes

Net cash flow Existing before cash flow NAV Underlying profit Gross Margin Contracted Sales from financing Net gearing End- 2010 2010E 2011E 2010E 2011E 2010E 2011E 2010E 2011E 2010E 2011E (HK$) (Rmb mn) (Rmb mn) (Rmb mn) (Rmb mn) (Rmb mn) (Rmb mn) Base case 5.93 7,797 8,881 36% 44% 36,066 38,320 (2,737) 5,724 14% -8% Evergrande Bear case 3.21 5,889 3,086 30% 29% 18,538 18,460 (19,617) (8,225) 108% 135% Worst case 1.82 4,858 824 26% 14% 14,587 14,982 (23,099) (9,986) 135% 188% Note: Base-case: We assume a 5%-10% price increase from the average level in 2009 for 2010E (or about a 10% decline from December 2009 level). A 10% per year increase for 2011E and 2012E, respectively, and flat thereafter; 15% volume decrease in 2010 from 2009 level. Bear-case: We assume a 30% reduction in property price from current levels and a 35% fall in volume over 2009. Worst-case: We assume a 45% price fall from current levels and a 35% fall in volume.

Source: Gao Hua Securities Research estimates.

Competitive analysis: Attractive land bank and a standardized operation

We think Evergrande has built up an attractive land bank portfolio given that it consists of cost-competitive, large-scale projects, spread throughout many of China’s high-growth cities. We also believe company management’s focus on two key strategies will enable Evergrande to reduce its execution risks and achieve economies of scale: (1) establishing alliances with industry professionals that specialize in different aspects along the property development chain; and (2) standardizing its operating process and product series.

Key positive #1: Cost-competitive, large-scale projects We believe that not only is the size of Evergrande’s existing land bank sufficient for the company to develop over the next five years (given that we expect the company to complete GFA 11mn sqm in 2009E and 2010E in aggregate), but the average land price relative to our estimated selling price is one of the lowest (9%) (Exhibit 20), and average project scale is the largest (GFA 1.17mn sqm) compared with our coverage universe (Exhibit 21).

Goldman Sachs (Asia) L.L.C. Equity Research 16 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 20: We estimate that the average cost of Evergrande’s land bank is Rmb484/sqm, only 9% of our estimated ASP for 2009E vs. an average of 21% for our coverage universe Land cost as a percentage of 2009E average selling price

(Rmb/sqm) Average land cost ASP Land cost as % of ASP

45,000 50%

43% 40,000 45%

40% 35,000 34% 32%32%32% 35% 30,000 31% 28% 27%26% 30% 25,000 24% 22% 25% 21%21%21% 20,000 20%20%19%19% 20% 15% 15,000 13%13% 12% 15% 9% 10,000 9% 8% 10% 6%

5,000 5%

0 0%

I I n T e Z le g HO o OL eet S i de CG Poly CRL dale OC r R&F lon O shi C Forte rag CMP KWG Ag an S n Huafa m St Vanke Yanlord Ave al Shimao rgr Fantasia Fra no OceanGe Greentown Powerve Si anci E Shui On Land Fin

Notes: (1) Our average land bank cost calculation is based on end-2009 unsold sellable GFA. (2) If we exclude the Qidong project, Evergrande’s average land bank cost would be Rmb618/sqm or 11% of our estimated ASP for 2009E.

Source: Company data, Gao Hua Securities Research estimates.

Exhibit 21: The average project size of Evergrande’s land bank portfolio is almost double that of the average GFA 629k sqm of our coverage universe Average project size of Evergrande and major listed residential developers under our coverage

(k sqm) Average project size 1,800 1,650 Avg project size of coverage group 1,600

1,400

1,164 1,200 1,132

1,000

770 800 688 674 619 Avg 629k sqm 600 478 443 393 369 400 331 323 240 164 200

0

e G o LI n ZI C RL O S SOL and R&F C cean C ow Agile KWG t Forte Vanke en anlord rgr Shima o O e Y in Eve S Gr

Note: If we exclude the Qidong project, the average size of Evergrande’s project is GFA 913k sqm.

Source: Company data, Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 17 October 9, 2009 Evergrande Real Estate Group Limited

Key positive #2: Focused geographical expansion in high-growth cities

Evergrande’s expansion into Tier-2 and Tier-3 cities has been deliberately and strategically skewed to China’s provincial capitals, particularly those in middle China. Along the same lines as other national developers, Evergrande has been aggressively expanding into Tier-2 and Tier-3 cities, but where it differs is that its expansion has been more skewed toward provincial capitals.

Exhibit 22: Evergrande’s expansion into Tier-2 and Tier-3 cities has focused more on provincial capitals End-2010E gross asset value (GAV) breakdown by city tier for major listed national developers and Evergrande

Tier-1 cities Provincial capitals (excl. Guangzhou, incl. Tianjin & Chongqing) Other tier 2/3 cities

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% Evergrande Country Garden Vanke COLI R&F CRL

Note: Tier-1 cities are Beijing, Shanghai, Guangzhou, and Shenzhen. Guangzhou is also the provincial capital of Guangdong Province.

Source: Gao Hua Securities Research estimates.

Provincial capitals are usually the political and economic centers of each province. We think land availability in these provincial capitals is better than in Tier-1 cities (Exhibit 23), thereby potentially allowing Evergrande to increase its NAV over the long term should the company manage to further extend its presence in these cities.

Meanwhile, we estimate that the higher-income populace has grown at a faster pace in these provincial capitals than in other cities within these provinces (Exhibit 24). As a consequence, we expect demand for new housing to increase in these cities, which in turn should enable Evergrande to monetize its land bank value relatively quickly.

Goldman Sachs (Asia) L.L.C. Equity Research 18 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 23: Land supply/transactions have fallen slower Exhibit 24: We expect the higher-income populace to in provincial capitals vs. Tier-1 cities grow faster in provincial capitals than other cities in Land supply during 2004-2008 in China, Tier-1, and provincial these provinces capital cities Annual household income/income growth comparison: Provincial capitals, other cities in these provinces, and Tier-1 cities between 2004 and 2008

(mn sqm) (RMB) 2004 2005 2006 2007 2008 450 2004 2005 2006 90,000 406 398 78,577 400 2007 2008 382 80,000 368 368 77,036 69,383 350 70,000 62,438 300 60,000 56,308

49,208 250 50,000 42,842 40,955 200 CAGR -21% CAGR -7% CAGR -2% 40,000 36,677 35,746 32,469 30,457 28,715 150 30,000 27,203 24,394 105 94 100 87 86 79 20,000

50 33 10,000 20 CAGR 8.7% CAGR 14.4% CAGR 13.8% 14 8 13 0 0 Tier-1 cities Provincial cities covered (incl National Ave Tier-1 cities Ave provincial cities covered Ave others tier-2/-3 cities in Tianjin, Chongqing) provinces

Source: CEIC. Source: CEIC.

In addition, a recent study published by McKinsey, “The coming of age, China’s new class of wealthy consumers” dated February 2009, estimates that the total number of affluent households in Tier-2 cities will grow by 180% from the end of 2008 to the end of 2015, which is much faster than the 140% expected increase in Tier-1 cities over the same period. This should also support Evergrande’s strategic geographical focus of expanding into provincial capitals in Tier-2 cities.

Exhibit 25: McKinsey estimates that there are 1.6mn Exhibit 26: Growth in less developed cities to be faster; affluent households in China, more than 30% of which by end-2010, total 4mn wealthy households estimated are concentrated in Tier-1 cities, as of end-2008 Distribution of wealthy households in China across the tiers No. and distribution of affluent households in China of cities by 2015

(mn households) (mn households) 1.8 5.0 Tier1 1.6 - 4.5 Top 10 cities Tier2 4.0 1.4 Tier3-4 1.2 1.2 0.7 3.5 1.2 3.0 1.0 0.9 2.5 1.4 0.8 0.2 1.6 2.0 0.7 0.6 0.3 1.5 0.5 0.4 1.0 0.5 1.8 0.2 0.5 0.5 0.6 0.0 0.0 2008 Tier-1 cities Tier-2 cities Other cities 2015 Tier-1 cities Top 6 tier-2 Other tier-2 Other cities Total cities cities

Note: Tier-1 cities are Shanghai, Beijing, Guangzhou and Shenzhen; Top 6 Tier-2 Source: McKinsey Global Institute, Insights China by McKinsey – 2008 Wealthy cities are Hangzhou, Ningbo, Wenzhou, Dongguan, Foshan, Chengdu; other Chinese Consumer Survey. Tier-2 cities include Tianjin, Nanjing, Suzhou, Wuxi, Xiamen, Shenyang, Jinan, Chongqing, Xi’an, Zhuhai and Zhongshan. An affluent household refers to an annual household income of no less than Rmb250,000.

Source: McKinsey Global Institute, Insights China by McKinsey – 2008 Wealthy Chinese Consumer Survey.

Goldman Sachs (Asia) L.L.C. Equity Research 19 October 9, 2009 Evergrande Real Estate Group Limited

Furthermore, we estimate, that among our coverage universe, Evergrande is the most exposed to these provincial capitals in middle China, which in our view, are less developed and less competitive relative to other regions. Since middle China is less developed the implication is for higher growth potential over the long term should the government’s efforts to balance economic growth in China materialize.

Exhibit 27: Evergrande has 35% of GAV in these provincial capitals in middle China Gross asset value breakdown by region

YRD Mid 28% 35%

PRD 14% Western Bohai 14% 4%

Northern 5%

Source: Gao Hua Securities Research estimates.

The ability to source land bank from a variety of places underpins future land bank growth In our view, Evergrande has a good track record of negotiating and acquiring land bank from other developers, as illustrated in Exhibit 28. Given the level of uncertainty over the availability of land bank in the primary market (as shown in Exhibit 23), we believe it is important for developers to be able to replenish their land bank from multiple sources to ensure the stability of their long-term earnings growth.

Goldman Sachs (Asia) L.L.C. Equity Research 20 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 28: Ability to source land bank from a variety of places underpins future land bank growth End-2010E GAV breakdown by land sourcing

Others, 2%

Merger & Acquisition, 31%

Open tender, auction and listing, 67%

Note: “Others” refers to land bank sourced through agreements with the government.

Source: Company data.

Key positive #3: We think Evergrande is adopting two key strategies to achieve economies of scale and reduce execution risks The two key strategies that Evergrande is implementing to ensure successful monetizing of its land bank value are: (1) establishing alliances with industry professionals that specialize in different aspects along the property development chain; and (2) standardizing its operating process and product series.

As illustrated in Exhibit 29, along the project development chain Evergrande has established business ties with well-known industry professionals. We believe alliances with construction companies, suppliers and fitting-out companies will enable Evergrande to not only ensure quality standards in its final products as the company expands rapidly but also lower overall project development costs to some extent given that it would enjoy good bargaining power for its large-scale projects and land bank, when negotiating with suppliers for large orders. In addition, alliances with renowned sales agencies that have a better understanding of local markets should also help Evergrande achieve its targeted selling prices and sales pace.

Furthermore, Evergrande has also been trying to standardize the operating process as illustrated in Exhibits 29 and 30. Although we understand these processes are in their infancy, we believe it is the right direction for Evergrande to take if the company is looking to lower its execution risks as a result of a rapid increase in scale and geographical expansion.

Goldman Sachs (Asia) L.L.C. Equity Research 21 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 29: Evergrande has established strong alliances with leading industry professionals and standardized operating procedures to facilitate its rapid expansion

Value chain Standardized operational procedure Alliances

1. Selection of location

- New urban districts in large cities with a population of over five million

- Those cities have track records of rapid growth in recent years - Have a beautiful environment, well-developed transportation system and significant profitability potential 2. Project scale - Generally 0.5 to 2.0 mn square meters in GFA and appropriate for multi- City and site selection phase development on a rolling basis 3. Project positioning - Target portion of 10%,70% and 20% in terms of the total numbers of projects distributed among high-end, mid to mid-high-end, mid-end and tourism-related series

4. Project status - Minimized relocation requirement, and land use right certificates already in place for acquired projects - Identifying potentially undervalued land reserves and competitive land price is critical

Land acquisition - Maintain sufficient land reserved at c.50mn sqm and GFA under construction at c.15mn sqm to fulfill company development

requirements for the next 3-5 years on a rolling basis

- Created more than 150 types of standard residential unit layouts - Wimberly Allison Tong & Goona, Inc. Designed 5 standard series of products including Evergrande Palace, - Atkins Shenzhen Evergrande Oasis, Evergrande City Evergrande Metropolis and Project planning and Evergrande Splendor - Shenzhen General Institute of Architectural Design and Research design - Their projects are generally equipped with luxurious clubhouse, sports - China Construction Design International (Beijing) centers, commercial centers and nursery schools - The Architectural Design and Research Institute of Guangdong Province - Outsource substantially all projects construction work to independent Interior design and decoration: contractors - Organize tender and invite primarily first-rate construction companies to Centralized tender - Suzhou Gold Mantis Construction & Decoration Co., Ltd. participate in the bidding for interior decoration, gardening and landscaping - Shenzhen Grandland Decoration & Construction Co., Ltd. - Signed long-term procurement agreements with reputable service and - Elevators: OTIS product suppliers - Established a unified national distribution system and manage regional - Power switches: SIEMENS offices directly by headquarters - Require the difference between the actual monthly purchased quantities Centralized - Kitchen electric appliances: Rinnai and the procurement plans should not exceed procurement 10% under normal circumstances - Bathroom fixtures: TOTO, KOHLER and American Standard

- Switch boards: Panasonic

- Air conditioners and cabinets: Haier More than 100 professional staff collect and analyze information on project - China State Construction Engineering Corporation progress and construction quality from all regional offices on a Project construction weekly basis through their in-house information management system - Zhong-Tie Construction Group Corporation Limited - Each regional office is responsible for day-to-day management of project construction - Provision of professional guidance and technical support to our regional offices for the purpose of overseeing and supervising the construction of all our projects Quality control and - Compilation of various standardized technical guidelines and assessment construction systems supervision - Results evaluation conducted through the monthly plans and weekly progress reports - Dispatch of qualified personnel to conduct on-site quality inspections on a random basis - 200 personnel manage and coordinate marketing and sales including - E-house Sales and marketing market research, brand promotion, sales planning, property pricing and sales management. - Hopefluent

- Commence pre-sale after completion of landscaping, gardening and Pre-sale - Guangdong Advertising Company Limited construction of on-site show units and lobby

- Typically require purchasers to pay a non-refundable deposit upon Payment arrangement entering into provisional purchase contracts

- Engage Jinbi Property Management, a subsidiary, to manage properties After-sales services and prior to delivery to customers property management - Engage well-known external professional property management or consultancy companies to manage high-end projects

Source: Company data.

Goldman Sachs (Asia) L.L.C. Equity Research 22 October 9, 2009 Evergrande Real Estate Group Limited

Apart from the standardization of its operation process along the valuation chain, Evergrande has already established three standardized product series, which we believe, will help the company reduce product development costs and shorten the development cycle.

Exhibit 30: Evergrande has strategically selected three product series for different land bank locations to capture housing upgrade-related demand

High-end Mid to mid-high-end Tourism-related

Evergrande Name of products Evergrande Palace City/Evergrande Evergrande Oasis/Atrium Evergrande Splendor Metropolis No. of projects/in no. of 6/6 14/11 15/14 9/9 cities

Share of total GAV for properties for sale 13% 45% 42%

Average 2009E-2011E development profit 21% 57% 22%

Scenic suburban 30-40km Traditional city center or Fringe of city center with Location (eg. km to city center) Fringe of city center away from city centers and CBD natural landscape adjacent to highway exits

Project size (GFA k sqm) 400-1600 (usually 500) 400-1200 (usually 800) 300-3000 300-12000

Plot ratio (X) 2.06-3.80 1.46-4.54 1.96-5.07 0.37-2.00

Flat size breakdown (%) 60-90 sqm 0% 25% 30% 95-135 sqm 0% 50% 60% Mainly low-density 140-180 sqm 0% 25% 10% properties, such as villa, 220-270 sqm 80% 0% 0% townhouses, low-rise 220-320 sqm 10% 0% 0% apartments 320-370 sqm 10% 0% 0% 370-520 sqm 0% 0% 0%

Average fully-fitting cost (Rmb/sqm) 1500-2000 500-1000 500-1000 500-1000

Target buyer's profile Upper-middle class, either Upper-middle class, either Upper-middle class, mainly Annual income > Rmb 500,000 first-time buyers or first-time buyers or second-home purchaser upgraders upgraders

Price -2009 selling price range Rmb5k-22k/sqm Rmb3.5k-11k/sqm Rmb 3.0k-6.0k/sqm

Note: The project assortment does not include Jinbi series projects as most of the projects are completed.

Source: Company data, Gao Hua Securities Research estimates.

Financial strengths and weaknesses: Strong financial position to fuel land bank replenishment

By the end of 2008, we estimate that the total outstanding land premium for Evergrande’s existing land bank (including those without land titles but which have signed land grant contracts with their respective governments) amounted to about Rmb12bn, with 41% and 45% scheduled to be paid in 2009E and 2010E, respectively. On top of the land premium, we estimate that the company needs to spend Rmb12bn and Rmb25bn for project construction in 2009E and 2010E, respectively, based on its project development plan. On

Goldman Sachs (Asia) L.L.C. Equity Research 23 October 9, 2009 Evergrande Real Estate Group Limited

January 21, 2010, the company issued US$750mn guaranteed senior notes at an interest rate of 13% per year with a bullet repayment mechanism to repay in full the outstanding principal amount of US$257mn of the US$433mn Structured Secured Loan from 2007, to finance existing and new property projects and for general corporate purposes. Since the company’s 2010E net debt-to-equity ratio will remain at a healthy level of 14%, which is below our coverage universe average of 32%, we believe the company should be able to either roll over existing financing or secure replacement lines. In addition, we estimate that over 40% of its total outstanding debt post its notes issuance (Rmb16bn) is due to mature over a period of two or more years, which suggests to us that the company has minimal debt repayment pressure over the near term.

Exhibit 31: Evergrande’s strong financial position Net debt to equity and capex during 2004-2011E

Capex (LHS) Base-case net gearing (RHS) Worst-case net gearing wih 35% CAPEX cut (RHS) (RMB mn) Bear-case net gearing with 35% CAPEX cut (RHS) 100,000 950%

930%

95,000

90,000 900% 35,000 200% 148% 30,000 150% 101% 25,000 121% 100% 113% 100% 84% 60% 20,000 50%

15,000 0% 14% -1% -8% 10,000 -50%

5,000 -100%

-118% 0 -150% 2004 2005 2006 2007 2008 2009E 2010E 2011E

Note: (1) Base-case: We assume a 5%-10% price increase from the average level in 2009 for 2010E (or about a 10% decline from December 2009 level). A 10% per year increase for 2011E and 2012E, respectively, and flat thereafter; 15% volume decrease in 2010 from 2009 level. Bear-case: We assume a 30% reduction in property price from current levels and a 35% fall in volume over 2009. Worst-case: We assume a 45% price fall from current levels and a 35% fall in volume. (2) CAPEX cut in Bear-case scenario and Worst-case scenario means construction cost only. We did not assume any cutback in unpaid land premiums in this analysis.

Source: Company data, Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 24 October 9, 2009 Evergrande Real Estate Group Limited

Company profile and strategy

Evergrande’s land bank is now the largest in China... Evergrande was established in Guangzhou in 1996 and has become a well known, large-scale developer in Guangdong. Since 2005 the company has started to expand outside its home market, and has now built up a land bank portfolio totaling GFA 51mn sqm, making it the largest developer in China in terms of land bank scale.

Exhibit 32: Evergrande’s land bank size is now the largest in China Land bank size comparison among our coverage universe

(mn sqm) 60

Tier-1 cities Tier-2/3 cities

50

40

30

20

10

0

I e L ly F P v g O ao & nd n rd nd wn CRL ean a M I lo H a CO Agile Po o im R C OCT Forte KWG O r ardenVanke SZ rlon Huafa S CWTC G Oc n L e an nshion rg eent Sh Average O FantasiaY ra e r Gemdale ow F G ui P Ev Sino h ountry S C Financial Street

Notes: (1) Tier-1 cities refer to Beijing, Shanghai, Guangzhou and Shenzhen. The others are all ranked Tier-2 or Tier-3 cities. (2) All numbers above refer to total GFA.

Source: Company data, Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 25 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 33: Evergrande is a large-scale developer in Exhibit 34: Evergrande has significantly increased its Guangdong land bank and the no. of cities it has exposure to since 2004-2008 aggregated property sales revenue achieved by late 2006 major large-scale Guangdong developers Evergrande’s land bank, and the no. of cities it has exposure to between 2004 and 2009 (Rmb mn) (mn sqm) 45,000 4.0% 60 2004-2008 aggregated property sales in Guangdong (LHS) Total Land bank 3.5% 40,000 Share of total property sales in Guangdong (RHS) 3.5% No of cities with exposure

35,000 50 2.8% 3.0%

30,000 2.5% 2.2% 40 25,000 2.0% 20,000 1.6% 30 1.3% 1.5% 15,000 1.1% 24 22 0.9% 21 0.9% 1.0% 10,000 20

5,000 0.5%

0 0.0% 10 6 KWG Evergrande Guangzhou Vanke Hopson R&F Agile Country Investment Garden 22

0 2004 2005 2006 2007 2008 2009 Sep

Source: CEIC, Gao Hua Securities Research estimates. Source: Company data.

…it is also one of the most geographically diverse, second only to China Vanke. Evergrande’s land bank is spread widely over 24 cities in China, including 2 municipalities (Tianjin and Chongqing), 15 provincial capitals and 7 other Tier-2 and Tier-3 cities in China, making the company’s level of exposure second only to China Vanke (33 cities).

Goldman Sachs (Asia) L.L.C. Equity Research 26 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 35: Mapping Evergrande’s land bank

Evergrande Oasis Luoyang

Evergrande Oasis Taiyuan Evergrande Oasis Zhengzhou

HEILONGJIANG Evergrande Palace Har bin

Changchun

Urumqi JILIN

Evergrande City Evergrande Metropolis Shenyang LIAONING Evergrande Oasis XINJIANG Evergrande Oasis Baotou BEIJING Hohhot Evergrande City INNER MONGOLIA Dalian TIANJIN HEBEI Evergrande Splendor Taiyuan Lanzhou Yinchuan Qingdao Evergrande City Evergrande City Shijiazhuang Evergrande Splendor Xining NINGXIA SHANXI Jinan Evergrande Oasis Luoyang QINGHAI SHANDONG Evergrande Palace Evergrande Splendor Evergrande Splendor Xi'an Evergrande Oasis Evergrande City GANSU Zhengzhou JIANGSU ANHUI SHAANXI Evergrande Splendor HENAN Nanjing Qidong

TIBET Evergrande Oasis SHANGHAI Evergrande Splendor He fe i Chengdu HUBEI Evergrande Palace Evergrande Metropolis Ningbo Evergrande City Wuhan Lhasa Hangzhou Evergrande Palace SICHUAN CHONGQING E'zhou ZHEJIANG Changsha Nanchang Evergrande City Evergrande Oasis Evergrande Palace Wenzhou Evergrande Oasis JIANGXI Evergrande City Evergrande Metropolis HUNAN Guiyang Evergrande Splendor E'zhou Evergrande City FUJIAN Fu zho u Evergrande Oasis Evergrande Oasis GUIZHOU Kunming Xiamen TAIWAN YUNNAN Presence of Evergrande projects GUANGDONG GUANGXI Foshan Guangzhou Shenzhen Province with 2008 GDP/capita Cities with 2008 population size Jinbi Bay Garden Jinbi Junhong Garden Nanning Above Rmb 30,000 Above 9 million Jinbi Palace Evergrande Royal Scenic Peninsula Ji bi P l Haik ou Jinbi Garden No.1 Evergrande Scenic Garden Rmb 17,500 - Rmb30,000 5 — 9 million

Jinbi Garden No.2 Evergrande Oasis Below Rmb 17,500 Below 5 million Evergrande Splendor HAINAN Evergrande Metropolis Foshan Evergrande Splendor Qingyuan Evergrande Oasis Jinbi Garden No.3

Jinbi City Plaza

Jinbi Emeral Court

Jinbi Atrium

Jinbi New City Garden

Jinbi Century Garden

Note: Projects named with “Palace” and “Royal” are luxury/high-end projects, projects named with “City”, “Metropolis”, “Oasis”, and “Atrium” are upper middle-end projects, and projects named with “Splendor” are resort projects. Others named with “Jinbi” in Guangzhou are mostly completed projects.

Source: CEIC, Gao Hua Securities Research estimates.

Focus on developing residential properties, similar to most other listed developers. Evergrande tends to be concentrated in building and selling residential properties, with more than 93% and 97% of its land bank being used for residential property development and for sale, respectively.

Goldman Sachs (Asia) L.L.C. Equity Research 27 October 9, 2009 Evergrande Real Estate Group Limited

Exhibit 36: Evergrande’s projects are spread widely over 24 cities in China Land bank size breakdown by city

Shijiangzhuang, 3%

Qidong, 28% Others, 24%

Chengdu, 4%

Luoyang, 7% Baotou, 4%

Wuhan, 4% Changsha, 6% Chongqing, 5% Nanchang, 6% Qingyuan, 6% Shenyang, 6%

Note: Pengshan project is included in Chengdu; Others include Shijiazhuang (provincial capital of Hubei), Zhengzhou (provincial capital of Henan), Guangzhou(provincial capital of Guangdong), Taiyuan (provincial capital of Shanxi), Hefei (provincial capital of Anhui), Nanjing (provincial capital of Jiangsu), Xi’an (provincial capital of Shaanxi), Nanning (provincial capital of Guangxi), Foshan (adjacent to Guangzhou), E'Zhou (adjacent to Wuhan), Kunming (provincial capital of Yunnan), Tianjin (municipality), and Guiyang (provincial capital of Guizhou).

Source: Gao Hua Securities Research estimates.

Exhibit 37: Similar to many other listed developers, Evergrande tends to be more focused on building and selling residential projects Land bank breakdown by usage and product type

Development Investment Total properties properties land bank (k sqm) (%) (k sqm) (%) (k sqm) (%) Above ground Residential 38,123 93% 0 0% 38,123 93% Office 39 0% 0 0% 39 0% Retail 1,730 4% 220 1% 1,949 5% Hotel 0 0% 838 2% 838 2% Total 39,892 97% 1,057 3% 40,949 100%

Under ground (k unit) (k unit) (k unit) Car Park 74 6 79

Note: Above ground GFA refers to total end-2009 unsold sellable GFA.

Source: Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 28 October 9, 2009 Evergrande Real Estate Group Limited

We believe Evergrande is looking to become a leading homebuilder in the industry not only in terms of land bank scale but also overall profitability. Evergrande is currently embarking on an aggressive development pipeline, the scale of which has never been seen among China homebuilders.

We estimate it will take China Vanke, the most established homebuilder in China with the longest development history, 11 years to reach an annual project completion scale of GFA 8mn sqm in 2010E from GFA 386k sqm in 1999. Evergrande, on the other hand, is looking to achieve a similar upgrade to its completion scale in only two years (Exhibit 38).

Exhibit 38: Evergrande is looking to achieve project completion of GFA 8mn sqm in 2010E from an average of 412k sqm during 2004-2008 and 2mn sqm in 2009E Annual completion targets comparison between Evergrande, Vanke, and COLI

(k sqm) Vanke Evergrande COLI 12,000

10,000

8,000

6,000

4,000

2,000

0 2004 2005 2006 2007 2008 2009E 2010E 2011E

Note: Annual GFA completion during 2009E-2011E for Evergrande is based on company reports; numbers for Vanke and COLI are our estimates.

Source: Company data, Gao Hua Securities Research estimates.

Goldman Sachs (Asia) L.L.C. Equity Research 29 October 9, 2009 Evergrande Real Estate Group Limited

Appendix

Exhibit 39: Board of directors: Composition and background

Name Age Joined in Background/most recent experience Chairman Hui Ka Yan (Chairman) 50 1997 - Responsible for formulating the company's overall development strategies. - 26 years' experience in real estate investment, property development and corporate management. - A member of the 11th National Committee of the Chinese People's Political Consultative Conference. - Vice-chairman of the China Enterprise Confederation, China Enterprise Directors Association, and China Real Estate Association. - Accredited as a "National Model Worker" (one of the highest civilian honors in China) by the State Council. Executive directors Xia Haijun (Vice Chairman, CEO) 45 2007 - Mainly in charge of the day-to-day management of the company's nationwide business operations including business expansion, procurement, marketing and corporate brand promotion, management information system and hotel management. - 16 years' experience in property development and property management and is accredited as a senior economist in China - Executive vice general manager of CITIC South China (Group) Co., Ltd. between 2000 and 2003. Li Gang (Vice Chairman. Executive Vice President) 45 2003 - Responsible for the operation and management of the company's property projects outside Guangdong Province. - 15 years' experience in property development, operation and management. - Vice-chairman of Guangzhou Pengda Group Company Ltd. and vice president of Shenzhen Zhongda Group Co. Ltd. and chairman of Shanghai Wanbang Enterprises Group Corporation from 1999 to 2003. Tse Wai Wah (CFO) 42 2008 - Responsible for financial management and overseeing the investor relationship department. - 16 years' experience in auditing, accounting and finance. - CFO for China Aoyuan Property Group Ltd. for more than 12 years. Xu Xiangwu 45 1997 - Responsible for the company's engineering construction system. - More than 23 years' experience in project management, construction, research and development and design. Xu Wen 45 1999 - More than 16 years' experience in project management, construction research and design, and is the chairman of the board of directors of Guangzhou Evergrande Materials and Equipment Company Ltd. - Assistant engineer and then engineer in Design Studio of Number 4 Construction Bureau at the Ministry of Railway from 1985 to 1994. Lai Lixin 37 2000 - Responsible for company's capital operations, investment strategies and management of development plans. - More than 14 years' experience in the operation and management of real estate projects. - Worked at Guangzhou Pengda Group Company Ltd. from 1995 to 2000. He Miaoling 43 1997 - Responsible for the company's marketing and brand promotion, acting as the company's sales manager, the general manager of the sales department and an assistant president. - More than 11 years' experience in the real estate industry.

Independent non-executive directors (INED) Yu Kam Kee, Lawrence 63 2009 - Executive director and Chairman of See Corporation Ltd. - Honorary Life President of the Hong Kong Dyestuffs Merchantse Association Ltd. - Co-Chairman of the Campaign Committee of The Community Chest of Hong Kong, Governor of the Hong Kong Automobile Association, Director of the Hong Kong Football Association Ltd. and Chairman of the Campaign Committee of the Road Safety Council. - Executive director of China Renji Medical Group Ltd., See Corporation Ltd. and Wing On Travel (Holdings) Ltd, the non-executive Chairman of Trasy Gold Ex Ltd and an independent non-executive director of Great China Holdings Ltd. and Global Flex Holdings Ltd. Chau Shing Yim, David 45 2009 - More than 20 years' experience in corporate finance, working on projects ranging from IPOs and restructuring of PRC enterprises for cross-border and domestic takeovers. - Formally a partner of one of the big-four accounting firms in Hong Kong. - Member of the Hong Kong Securities Institute, the Institute of Chartered Accountants of England and Wales with the Corporate Finance Qualification granted by ICAEW, and the Hong Kong Institute of Certified Public Accountants (HKICPA). - Ex-committee memeber of the Disciplinary Panel of HKICPA. - Executive director of Lee & Man Paper Manufacturing Ltd, Shandong Molong Petroleum Machinery Company Ltd. and Varitronix Int'l Ltd. He Qi 51 2009 - Deputy Secretary o f China Real Estate Association, as well as the director of the training center and intermediary professional committee of the China Real Estate Association.

Source: Company data.

Evergrande Splendor Qidong Project Evergrande Splendor Qidong has a sellable GFA of about 11.6mn sqm, which accounts for 28%/25% of total sellable land bank and our estimated end-2010E GAV. This project faces the ocean on three sides with a coastline totaling 4.8km.

According to the Qidong city government’s website, Qidong County is a small city in Jiangsu Province, located to the north of Shanghai, at the mouth of the Yangtze River. The city’s total land area is about 1.21sq. km with a population of about 1.12mn people. It is named the “Leap Pearl” due to its pleasant climate, abundance of natural resources, and beautiful scenery. As it formed part of the first batch of coastal cities to open up to economic development and trade, Qidong has consistently been ranked in the top-100

Goldman Sachs (Asia) L.L.C. Equity Research 30 October 9, 2009 Evergrande Real Estate Group Limited

rural counties in China in terms of overall economic strength for five consecutive years between 2004 and 2008.

Exhibit 40: Upon the completion of the Shanghai-Chongming Island-Qidong bridge (2012), the travel time between Shanghai and Qidong will be reduced to 50 minutes from 3 hours at present A map of Qidong

Qidong Evergrande Splendor Qidong

ChongQi Bridge (under construction)

Chongming Island

Changxing Island North Bridge

Shanghai Yangtze River Crossing Project Shanghai South Tunnel

Source: Company reports, Gao Hua Securities Research.

According to the Qidong city government, Qidong recorded a yoy GDP growth rate of 14.6% to Rmb32.5bn or GDP per capita rising to Rmb34,205, in 2008. Disposable income per capita also registered a similar growth rate (13% yoy) to Rmb16,600 vs. the national average of Rmb15,781.

The Shanghai-Chongqing Island-Qidong Expressway comprises two parts: the Shanghai Yangtze River Crossing Project and the Chongqi Bridge. (1) The Shanghai Yangtze River Crossing Project, also called Shanghai Yangtze River Bridge & Tunnel is the name of south part “Shanghai Yangtze River Tunnel” and north part “Shanghai Yangtze River Bridge”. The Shanghai Yangtze River Tunnel starts at Wuhaogou, Pudong, Shanghai, crosses the south part of the Yangtze River and ends southwest of Changxing Island. It is

Goldman Sachs (Asia) L.L.C. Equity Research 31 October 9, 2009 Evergrande Real Estate Group Limited

8.5km in length, and connects to the Shanghai Yangtze River Bridge. The tunnel has two stacked levels. The upper level is for a motorway, and has three lanes in each direction, with a designated top speed of 80km per hour. The lower level is reserved for a future metro line. The Shanghai Yangtze River Bridge starts at the exit of the Shanghai Yangtze River Tunnel, crosses Changxing Island at ground level, then crosses the north part of the Yangtze River, and ends at Chenjia Town, Chongming, Shanghai, where it connects to the Chongqi Bridge. The total length is 16.63km, 6.66km of which is road and 9.97km of which is bridge. The bridge also has three lanes in each direction, with a designated top speed of 80km per hour. Room on both flanks of the bridge is reserved for a future metro line. The local government has completed construction of the main structure and the connection of the tunnel and the bridge, and is expected to be open to traffic in 2012. (2) The Chongqi Bridge starts from Chenjia Town, Chongming, Shanghai, connects the Shanghai Yangtze River Bridge, and ends at Qidong, Jiangsu. The total length is 52km, 7km of bridge, and 45km of connecting roads, all of which have 6 lanes in each direction. The local government laid the foundation for the bridge in August 2008 and launched construction of the Shanghai section in December 2008 while the Jiangsu section was started in February 2009. The whole project is expected to be completed by 2012. Upon completion, it is estimated that the journey will take only 50 minutes to drive from Shanghai to the site of the Evergrande Splendor Qidong project compared with 3 hours at present.

The company plans to develop its Qidong project into an extra-large-scale resort that encompasses a Venetian theme. Its target customers are likely to be mainly business and vacation home buyers from the Yangtze River Delta region or from overseas. This project will consist of villas, semi-detached villas, townhouses, garden-view villas, condominiums, and high-rise residential buildings, as well as ancillary facilities such as an upscale hotel, a large convention center, an upscale clubhouse, a sports center, a commercial center, and a school. The company aims to have the entire project completed by 2029. So far, the company has completed the piping, reclamation, road construction, and drainage elements of the project. We factor in an average selling price of Rmb8,042/sqm for the project, starting with Rmb6,636/sqm when the presale is launched in 2010. We estimate an average all-in development cost of Rmb2,919/sqm for this project.

Goldman Sachs (Asia) L.L.C. Equity Research 32 October 9, 2009 Evergrande Real Estate Group Limited

100% 958 1% 2,655 3% 1,396 2% 80,270 296 162 207 17,414 (Rmb mn) (Rmb GAV End-10E Gross profit booked profit booked Gross 14,396 603 403 123 289 148 19 40,473 2,024 618 441 883 (Rmb mn) (Rmb Revenue to be booked to be booked Revenue 5,249 1,424 1,032 984 41,111 (2010E) Est.ASP Est.ASP (Rmb/sqm) 2009E 2010E 2011E 2009E 2010E 2011E mn) (Rmb of ttl % (%) Gross margin Est cost construction construction cost Est land land Est 52,061 Dec-10 193 3,122 Jun-15 Sep-12 42% Dec-12 Dec-12 352 1,804 6,427 266 630 Jun-11 2,697 605 2,191 Oct-14 Dec-12 2,290 568 35% 2,233 34% 845 Jul-16 848 28% Oct-14 35% 4,931 Dec-11 7,869 2,596 Dec-12 382 1,185 4,639 2,705 1,899 5,091 2,843 148 44 26% 1,138 33% 38% 2,778 2,818 0 834 5,061 988 0 2,727 6,006 2,663 36% 23% 6,279 956 499 171 27% 209 686 22% 175 1,181 6,984 6,035 1,710 37 0 6,412 9 522 7,132 881 0 342 0 0 494 285 561 1,013 348 0 2,150 0 1,058 266 884 56 239 307 1,607 53 699 97 1,640 588 460 0 1,691 133 577 64 1,518 292 1,371 1,228 0 212 1,215 2% 148 0 1,524 486 411 2% 0 317 2% 394 2% 508 22 412 132 745 784 891 1% 2,425 452 1% 568 3,551 1% 3% 583 4% 725 1% 1% Dec-12 Nov-12 Sep-12 Jun-12 589 791 609 528 2,349 2,468 2,257 15% 2,407 36% 48% 39% 4,462 5,344 6,219 5,600 0 0 0 0 767 0 1,384 0 647 1,525 2,005 1,080 0 0 0 0 111 0 252 360 0 553 409 1,067 959 1% 441 921 1,211 1% 1% 2% Mar-05 Oct-12 Oct-12 Nov-05 218 Jun-06 Dec-06 211 231 2,704 Jun-08 Jun-08 346 Mar-07 1,315 706 May-07 5,781 267 Dec-10 4,823 3,214 2,189 169 n.m. Dec-12 n.m. 3,341 Sep-11 226 4,087 n.m. 46% Jun-11 253 May-11 4,112 n.m. 477 n.m. 3,589 2,745 n.m. n.m. 192 23,363 1,321 n.m. 2,773 n.m. 144 n.m. 70% 5,362 n.m. 8 n.m. 4,778 n.m. 0 7 2,586 3,248 n.m. 5 50% 9,366 n.m. 3,137 58% 0 0 31% n.m. 69% 0 37 7,895 4 58 15,567 60% 0 0 2 12,876 5,533 147 0 0 10,358 6 0 397 0 690 0 0 23 431 0 0 0 5 3,386 0 0 0 3 3 0 43 0 845 1,473 0 2,422 0 24 0 0 235 1,509 0 0 928 22 480 0 0 2 0 1 95 203 1,979 0 0 0 0 3 0 294 0 0 0 16 1,661 0 999 265 148 21 0 0 0 0 262 0 5 0 918 11 404 0% 2,654 0 160 0% 0% 0 0 0% 0 3% 2,286 -29 0 -23 938 140 2 0% 3% 0% 0% 0 0% 1% 3 0% 0% 0% 703 1% Jan-17 77 2,496 24% 4,553 0 1,768 716 0 430 305 3,786 5% Jun-17 Jun-16 Dec-13 311 198 398 3,071 2,532 2,608 49% 30% 47% 6,894 4,616 5,900 0 0 0 1,037 1,054 0 1,216 647 0 0 0 0 492 311 0 610 332 0 3,987 885 5% 1,847 1% 2% Dec-11 Dec-29 2,528 Sep-17 155 Dec-15 2,705 342 Sep-12 Dec-10 2,909 Jun-12 11% 344 Dec-14 1,478 502 2,671 2,534 53% 7,230 2,707 2,849 39% 6,636 2,698 2,732 318 2,546 24% 2,599 5,158 31% 19% 905 18% 0 4,436 12% 385 Dec-14 7,108 5,636 513 6,798 170 6,899 0 Dec-10 209 268 181 4 1,469 0 975 1,221 0 1,543 787 2,816 0 97 847 401 8 605 551 23% 2,500 732 153 103 72 703 23 0 Dec-13 19% 4,734 Jun-13 Sep-12 380 0 235 288 932 777 0 638 2,901 4,341 129 685 185 157 1% 20,823 272 1,615 67 8 2,651 0 2,389 26% 190 105 2,157 957 1,618 48% 1,373 89 31% 762 53% 24 1% 2% 944 2% 6,526 205 7,948 817 5,715 369 1% 0 0 1% 0 0 38 144 749 495 811 1,137 1,634 952 64 1,022 0 1% 0 0 431 356 156 1% 431 567 565 549 1,326 766 598 2% 1% 1% Dec-12 360 2,317 63% 8,500 0 893 1,107 0 559 720 1,271 2% Dec-14 Dec-12 Dec-11 296 577 529 2,687 2,159 2,064 39% 32% 38% 6,464 5,681 5,616 423 0 397 1,760 615 982 1,204 625 1,120 185 0 170 194 693 373 243 611 507 1,108 2,439 1,340 1% 3% 2% Jun-15 348 2,492 40% 5,086 111 1,166 245 47 471 109 1,506 2% Oct-14 840 2,621 12% 4,936 138 (%) sqm) (k (Rmb/sqm) (Rmb/sqm) 85% 567 100%100%100% 11,957 307 100%100% 2,291 100% 813 378 466 100%100% 919 313 100%100% 972 951 g g g g g g g g g g g dudu 100% 100% 1,128 629 shasha 100% 51% 841 440 qin qin qin zhouzhou 100%zhou 100%zhou 100%zhou 100%zhou 342 100%zhou 460 100%zhou 137 100%zhou 60% 53 428 100% 89 209 644 752 zhou 80% 1,273 g g g g yuan 100% 2,804 g g g g g g g g g g g g g g Qidon Nanjin Guiyan Kunmin Shenyan Chon Chon Shijiazhuan Shijiazhuan g g sha Chan g Chon g g Nanchan qin g g g g g g shan Chen yuan Qin qin g g g g qin du Chen zhou Zhen g g g g sha Chan g Our development schedule estimates schedule estimates development Our

rande Royal Scenic Royal Peninsularande Scenic Gardenrande Guan rande Splendor Qin Nanjin Oasis rande Guan rande Splendor Qidon rande Splendor Tianjin Shenyan Oasis rande rande Splendor Chon rande Palace Chon Chon Oasis rande Tianjinrande Splendor E'zhou Palace Wuhan rande 100%rande Splendor Pen Chen Oasis rande Metropolis Xi'anrande E'zhou 513 Oasisrande Xi'an Wuhanrande Splendor Kunmin 100% Palace rande Baotou Mixed Oasis Guiyan rande Palace rande Hefei Xi'an Chan Metropolis rande 858 City rande Chan Xi'an 565 100% Baotou Zhen Oasis rande 65% 100% Nanchan Oasis rande Hefei 309 rande City Shijiazhuan rande Splendor Shijiazhuan 100% 410 1,666 516 g g g g g g g g g g g g g g g g g g g g g g g g g g Pearl River Delta Development propertiesDevelopment Location Interest GFA Attri. Completion Yangtze River Delta Yangtze Baohai Rim Total Mid China - West Mid Ever Oasis WuhanEvergrande City Wuhan Evergrande Ever Ever City Xi'anEvergrande Ever Wuhan Wuhan Oasis TiayuanEvergrande Ever 100% 100% Palace ChangshaEvergrande Ever Xi'an 816 Taiyuan 835 Changsha 100% 100% 51% 1,848 690 253 Ever Oasis ChangshaEvergrande Oasis NanningEvergrande Ever Changsha Nanning 100% 80% 747 631 Jinbi Garden No. No. Garden Jinbi 2 No. Garden Jinbi 3 Palace Jinbi Plaza City Jinbi Jinbi Emerald Court City New GardenJinbi Garden Century Jinbi Garden Bay Jinbi Atrium Jinbi JunhongJinbi Garden GuangzhouEver Guan Ever Oasis GuangzhouEvergrande 100% Metropolis Foshan Evergrande Guan Guan Ever Guan Guangzhou Guangzhou 100% 100% Guan Guangzhou Guangzhou 306 Foshan Guan 100% 100% 40% 118 413 197 485 862 Jinbi Garden No. No. Garden Jinbi 1 Guan Evergrande Oasis LuoyangEvergrande City Nanchang Evergrande Ever Luoyang Nanchang 100% 51% 3,165 697 Ever City ChongqingEvergrande Ever Ever Chongqing Metropolis Evergrande Ever Chongqing Chongqing 100% 100% 1,175 Ever 842 Ever Ever City HefeiEvergrande Ever Hefei 60% 261 Ever Ever City ChengduEvergrande Ever Chengdu 100% 699 Ever Evergrande Splendor Splendor NanjingEvergrande Nanjing 100% 1,134 Evergrande City City ShenyangEvergrande Shenyang 100% 888 Ever Ever Exhibit 41: Company Research estimates. Source: Gao Hua Securities data,

Goldman Sachs (Asia) L.L.C. Equity Research 33 March 1, 2010 Evergrande Real Estate Group (3333.HK)

Exhibit 42: Our Investment property and hotel estimates

Property Investment properties Interest Attri. GFA type Completion All-in cost Rental rate (Rmb/sqm/mth) Gross profit (Rmb mn) End-10E GAV (%) (sqm or unit) (Rmb mn) 2009E 2010E 2011E 2009E 2010E 2011E (Rmb mn) % of ttl Jinbi Garden No1 Retail 100% 667 Retail Mar/05 1 55 53 51 0.2 0.2 0.2 5 0% Jinbi Garden No1 Car Park 100% 375 Car Park Mar/05 0 309 293 286 0.6 0.6 0.5 14 1% Jinbi Garden No1 Retail - Jinbi Big World 100% 15,172 Retail Mar/01 23 89 86 83 8.1 7.8 7.6 168 13% Jinbi Garden No2 Retail 100% 901 Retail Sep/03 5 36 36 35 0.2 0.2 0.2 4 0% Jinbi Garden No2 Car Park 100% 88 Car Park Sep/03 0 231 233 230 0.0 0.0 0.0 3 0% Jinbi Garden No3 Retail 100% 1,137 Retail May/07 4 103 64 54 0.1 0.1 0.1 8 1% Jinbi Garden No3 Car Park 100% 189 Car Park May/07 0 354 359 355 0.2 0.2 0.2 9 1% Jinbi Palace - Retail 100% 581 Retail Nov/05 4 115 117 114 0.4 0.4 0.4 9 1% Jinbi Palace - Car park 100% 307 Car Park Nov/05 0 981 934 911 1.0 1.0 1.0 36 3% Jinbi City Plaza - Retail 100% 12,004 Retail Jun/06 44 69 67 64 1.9 1.9 1.8 103 8% Jinbi City Plaze - Car Park 100% 190 Car Park Jun/06 0 519 512 503 0.2 0.2 0.2 12 1% Jinbi Emerald Court - Retail 100% 8,371 Retail Dec/06 40 66 63 60 1.4 1.3 1.3 67 5% Jinbi Emerald Court - Car park 100% 141 Car Park Dec/06 0 295 291 286 0.1 0.1 0.1 5 0% Jinbi New City Garden - Retail 100% 3,498 Retail May/07 17 52 53 51 1.1 1.1 1.1 24 2% Jinbi New City Garden - Car park 100% 1,287 Car Park May/07 0 236 219 213 0.7 0.8 0.8 35 3% Jinbi Century Garden - Retail 100% 793 Retail May/07 2 74 71 68 0.2 0.2 0.2 7 1% Jinbi Century Garden - Car park 100% 1,251 Car Park May/07 0 424 409 400 0.8 1.2 1.2 64 5% Jinbi Bay Garden - Car park 100% 196 Car Park Mar/07 0 492 485 477 0.3 0.3 0.3 12 1% Jinbi Atrium - Car Park 100% 779 Car Park May/07 0 504 496 488 2.1 2.0 2.0 48 4% Jinbi Junhong Garden - Car Park 100% 465 Car Park Apr/08 0 492 485 477 0.4 0.4 0.4 28 2% Evergrande Royal Scenic Peninsula - Retail 60% 1,500 Retail Jan/09 7 58 56 54 0.3 0.3 0.5 11 1% Evergrande Royal Scenic Peninsula - Car Park 60% 166 Car Park Jan/09 0 788 776 763 0.4 0.4 0.4 16 1% Evergrande Splendor Chongqing - Retail 100% 49,092 Retail Jun/09 157 34 32 30 2.0 2.8 3.5 196 15% Evergrande Oasis Luoyang - Office 100% 88,000 Office Dec/15 185 29 27 26 0.0 0.0 0.0 235 19% Evergrande Oasis Shenyang - Retail 100% 34,704 Retail Oct/09 81 34 32 30 2.1 2.7 3.8 139 11% Evergrande Oasis Tiayuan-Retail 100% 2,375 Retail Oct/09 8 34 33 32 0.1 0.2 0.3 10 1% Subtotal 224,229 579 25 26 28 1,267 100%

Hotels Interest Attri. GFA Room no. Completion All-in cost Rental rate (Rmb/Room) After-tax profit (Rmb mn) End-10E GAV (%) (sqm) (units) (Rmb mn) 2009E 2010E 2011E 2009E 2010E 2011E (Rmb mn) % of ttl Evergrande Royal Scenic Penninsula Ph1 - Hotel 100% 21,907 146 Dec/08 266 553 525 525 9 13 14 151 8% Evergrande Scenic Garden Ph1 - Hotel 100% 45,991 307 Sep/10 272 383 363 363 0 9 20 161 9% Evergrande Splendor Qingyuan - Hotel 100% 35,204 235 Jun/10 204 298 283 283 0 5 12 19 1% Evergrande Splendor Chongqing - Hotel 100% 35,379 222 Jun/10 190 298 283 283 0 5 11 32 2% Evergrande Splendor Tianjin Ph1 - Hotel 100% 35,439 222 Jun/10 213 340 323 323 0 6 13 51 3% Evergrande Splendor E'zhou - Hotel 100% 34,895 222 Dec/10 92 298 283 283 0 2 11 138 7% Evergrande Splendor E'zhou - Hotel 100% 80,000 533 Dec/13 399 340 323 323 0 0 0 210 11% Evergrande Splendor Pengshan - Hotel 100% 38,811 250 Jun/11 165 298 283 283 0 0 0 45 2% Evergrande Oasis Chengdu - Hotel 100% 102,150 805 Jun/12 652 383 363 363 0 0 0 194 10% Evergrande Splendor Nanjing - Hotel 100% 35,790 237 Dec/10 212 383 363 363 0 0 9 112 6% Evergrande Splendor Qidong - Hotel 100% 75,820 233 Mar/11 424 383 363 363 0 0 9 (299) -16% Evergrande Splendor Kunming - Hotel 100% 33,230 222 Dec/10 203 383 363 363 0 0 9 96 5% Evergrande Palace Baotou - Hotel 100% 60,000 400 Oct/13 170 298 283 283 0 0 0 215 11% Evergrande Oasis Zhengzhou - Hotel 80% 90,760 900 Jun/12 489 298 283 283 0 0 0 275 15% Evergrande Palace Luoyang - Hotel 100% 89,600 597 Dec/15 432 340 323 323 0 0 0 485 26% Subtotal 814,975 5,531 4,383 9 40 107 1,884 100%

Total Investment projects 1,039,205 4,962 34 66 135 3,151

Source: Company data, Gao Hua Securities Research estimates.

Financial advisory disclosure

Goldman Sachs is acting as financial advisor to Country Garden Holdings Company Limited in an announced strategic transaction.

Gao Hua Securities Investment Research 34 March 1, 2010 Evergrande Real Estate Group (3333.HK)

Reg AC

I, Yi Wang, CFA, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

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Disclosures

Coverage group(s) of stocks by primary analyst(s)

Yi Wang, CFA: China Property. China Property: Agile Property Holdings, China Merchants Property (A), China Overseas Land, China Resources Land, China Vanke (A), China Vanke (B), China World Trade Center, Country Garden Holdings Company, E-House (China) Holdings Limited, Evergrande Real Estate Group, Fantasia Holding Group Co., Financial Street Holding Co, Franshion Properties (China), Gemdale Corp, Greentown China Holdings, Guangzhou R&F Properties, Huafa Industrial, KWG Property Holding, Poly Real Estate Group, Powerlong Real Estate Holdings, Shanghai Forte Land, Shenzhen Investment, Shenzhen Overseas Chinese Town Holding, Shimao Property, Shui On Land, Sino-Ocean Land Holdings, SOHO China, Yanlord Land.

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The following disclosures relate to relationships between Goldman Sachs Gao Hua Securities Company Limited ("Goldman Sachs Gao Hua") and companies covered by the Investment Research Division of Beijing Gao Hua Securities Company Limited ("Gao Hua Securities") and referred to in this research. Goldman Sachs Gao Hua has received compensation for investment banking services in the past 12 months: Evergrande Real Estate Group (HK$3.21) Goldman Sachs Gao Hua expects to receive or intends to seek compensation for investment banking services in the next 3 months: Evergrande Real Estate Group (HK$3.21) Goldman Sachs Gao Hua had an investment banking services client relationship during the past 12 months: Evergrande Real Estate Group (HK$3.21)

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Buy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy or Sell on an Investment List is determined by a stock's return potential relative to its coverage group as described below. Any stock not assigned as a Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to a global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular coverage group may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investment recommendations focused on either the size of the potential return or the likelihood of the realization of the return. Return potential represents the price differential between the current share price and the price target expected during the time horizon associated with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership. Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at http://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst's investment outlook on the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the

Gao Hua Securities Investment Research 35 March 1, 2010 Evergrande Real Estate Group (3333.HK)

following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation. Not Rated (NR). The investment rating and target price have been removed pursuant to Gao Hua Securities policy when Goldman Sachs Gao Hua is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). We have suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis for determining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). We have suspended coverage of this company. Not Covered (NC). We do not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.

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Gao Hua Securities Investment Research 36