the era of scale orientation; yet the Group remains calm and rational when facing the market trend, and value both scale and profits, and develop both our quality and quantity. We are committed to creating exquisite products and enjoyable living. As a diversified community-living operator, we are committed to building a real estate-based business, supplemented by diversified development, actively responding to industry trends, and continuing to establish strategic layout, acquire high-quality land, capital, and talent to build our absolute advantage which will surely lead the Group to achieve rapid corner overtaking under the backdrop of the new era.

# BUSINESS REVIEW

# Market and Sales Performance

In 2017, the real estate policy adhered to the main principle of “Housing for residents and not speculators, and implement long-term effect mechanism” (“房 住 不 炒 , 長 效 機 制 ”), and expanded the supply-side reforms, optimized the supply structure, with the tight convergence between short-term control and long-term mechanisms, the effect of adjustment and control gradually emerged. Sales area of commercial houses continued to reach record highs throughout the year, but the differentiation between cities was obvious, with the transaction volume of major cities, especially first-tier cities, dropped significantly, while third- and fourth-tier cities have all recovered, driving up the sales area nationwide. While the amount of different types of land on the PRC market has increased, and the transaction volume has grown for the first time in four years, which has eased the supply pressure. However, high land prices still exert pressure on the industry.

The Group persist in implementing the investment layout strategy of “expansion into the first-tier cities and further development into the strategically targeted second-tier cities ( 大 力 拓 展 一 線 城 市 , 深 耕 已 進 入 的 強 二 線 城 市 )”, and adhere to the urban layout strategy of “3+N+1”, strategically focusing on the three core regions, namely the Greater Bay Area, the Yangtze River Delta region, and the Bohai Rim region, as well as actively develop multiple key urban nodality in the Mid-west, supplemented by overseas markets. We continued to focus on the core cities development, such as Shenzhen, Shanghai, Guangzhou, Hefei, Nanchang, Jinan and Tianjin with high growth potential and strong demand. The Group adhere to the principle of improving the living environment of home-buyers by constructing upgraded products for first-time purchasers and first-time upgraders. The operating principles consistently upheld by the Group has effectively resolved the pressure from the adjustment and control policies in 2017, and matches with the market development direction and demand, achieving a steady growth in terms of results performance of the Group.

During 2017, the Group achieved contracted sales of RMB13.1968 billion, representing a year-on-year increase of 30.2%; area of completed and delivered construction was 858,197 sq.m., representing a year-on-year increase of 32.5%.

# Financial Management

The Company continued to maintain a steady financial policy, and abide to its healthy and reasonable capital structure and debt level. The Group’s net gearing ratio remain low at 33.7% in 2017.