Basic HTML Version
41
Management Discussion and Analysis -
Future Outlook
Glorious Property
Annual Report 2011
Future Outlook
In 2012, the global economy is expected to recover in a slow pace. European sovereign debt crisis showing no sign
of improvement will impact on the Eurozone economies which may fall into recession and ultimately will drag on the
pace of global economic recovery. Despite the fact that China’s economy grew rapidly, the growth rate may be slow
down by external influence. “Preserving the Growth, Adjusting the Structure and Curbing the Inflation” will become the
basic tones of the economic development of China in 2012. Given the considerable uncertainties loom over the major
economies, such as Europe and the United States in 2012, it may bring influence to the international financial markets
and the world economic prospect.
The Central Government of China is expected to continue to maintain the stringent austerity measures for the property
market. The austerity measures are unlikely to be changed if there is no sign of significant decline on housing prices or
the prices do not meet the Central Government’s expectation. Under the backdrop of the persistent macroeconomic
control on the property market, the austerity measures are expected to be refined in 2012 with an aim to satisfy the
home purchasers’ reasonable need and curb the demand for investment and speculation. Nevertheless, local fine-tuning
will not be able to change the severe situation of the overall property market and property developers will still face
tremendous challenges.
Due to the unlikely relaxation of the property market control, the falling trend of home prices may persist, particularly
in the first half of 2012. In response to this market condition, property developers may need to further increase revenue
source and cut costs. On one hand, strategies such as price reduction and active promotion may be used to accelerate
inventory digestion and increase capital turnover. On the other hand, cost control methods, including prudent land
purchase and cut down on operation, will be implemented in order to secure operational cash flow. The Group
anticipates that a hastened adjustment towards the property market, differentiation of property enterprises become more
obvious and industry consolidation will be sped up, which may result in market concentration.
SALES AND PRICING STRATEGY
In 2012, the Group will continue to keep abreast of the market and implement active and flexible strategies in sales and
pricing to speed up sales and cash inflows for existing projects. The Group will adopt a strategy of deep penetration
into the current markets in existing cities. Focus will be put on existing cities at where its projects with sound results are
located so as to fully capitalise the local resources, build up its brand name and achieve sustainable development.