Our goal is to become the leading residential property developer in Xi'an and in other urban markets in western China, measured by the combination of high customer satisfaction, high quality design and construction, the gross floor area created each year, total assets, and return on investment (IRR).
1. Focus on continuing to serve the greater Xi'an market and on expanding our real estate development business into the leading urban markets in western China, because western China --
- accounts for about half the geographic area of China in total and a growing share of the country's population,
- has substantial natural resources and related attractive incomes per capita, which are rising,
- has high potential GDP growth and increasing disposable incomes,
- has high population growth due to --
- China's Go West policy that encourages people to move from the tier 1 cities to smaller cities in the west,
- China's rural to urban migration, and
- the emerging economies based on resource exploitation and subsequent industry diversification, and
- is a market that is just emerging, so the development cost will be relatively inexpensive but the potential price appreciation should be attractive.
2. Expand into new Tier II and Tier III cities in western China
The company's business model can be replicated in other tier II and tier III cities, a number of cities that offer attractive dynamics have been identified. Projects in other cities have already been initiated and construction is scheduled to start in the Second Quarter 2011.
3. Serve the rapidly growing middle and upper income families.
They will appreciate our high quality and can afford our attractive cost-effective apartments. Serving this market also supports the housing policies of the Chinese government, which is to our benefit.
4. Maintain modern cost control systems to ensure cost-effective and efficient operations.
We use modern management and control systems to manage our operating and construction schedules and costs, our costs of land rights, our cash, working capital, assets, liabilities, bidding and selection processes, capital expenditures, potential investments, and virtually all other facets of our company.
5. Leverage our strong brand.
With more than 16 years in the Xi'an real estate market, China Housing has built a widely recognized brand, using the Tsining name, that is known for high quality at cost-effective prices. Each of our seven completed projects has strengthened our reputation, and our current projects will do the same.
Our acquisition of the Xi'an Xinxing property management company in early 2009 will further strengthen our high-quality brand by providing outstanding property management services to customers long after they have purchased their apartments. The buildings and grounds will be better maintained, and the value of the apartments should be better retained.
Our strong brand gives us a competitive advantage in acquiring property rights, attracting customers, negotiating prices, achieving internal rates of return comfortably above our total and incremental costs of capital, creating customers who are happy, not just satisfied, and in expanding into other markets.
6. Use our access in the global capital markets to expand our organic growth and increase our prudent acquisitions and expansions.
Because we have an unblemished record as a borrower, we have good access to capital, both in China, and in the global capital markets. Our listing on NASDAQ in 2008 broadened investors' and bankers' awareness, recognition, and interest in our Company, which has already made our access to capital easier and at lower relative cost.
1. We are effectively positioned in greater Xi'an and expect to be similarly positioned in our targeted locations.
2. We understand and serve very well our chosen target customers - middle and middle-upper income families - and have a proven ability to provide large-scale high-quality housing for them that they cherish for many years to come.
3. We have extensive core competencies, supplemented by training and development programs.
Our core competencies, listed below, are woven into every phase of our real estate development business. Our staff works as one integrated team on each phase. China Housing's core competencies include:
- Land analysis and acquisition,
- Site planning and development,
- Design, architecture, engineering, and construction,
- Environmental awareness and actions,
- Project management,
- Marketing and sales,
- Joint ventures and co-developments,
- Government relations,
- Property management,
- Demolition and recycling, and
- Acquisition integration.
4. Our experienced management team has a proven track record of high-quality performance and high investment returns. Our top five leaders have a total of more than 85 years of relevant experience.
5. Our access to the global capital markets.
We believe our good record with our banks and investors, plus the greater awareness and recognition created by our listing on NASDAQ and our investor relations program, will give us continuing access to adequate capital.
6. Our local market knowledge and familiarity with the real estate market and participants in northwest China.
We know the real estate market, the players, and the parcels. Usually, we have the best relationships in the industry, which give us a substantial competitive advantage -- to acquire development rights and land rights, to select the best subcontractors and suppliers, to have the most effective marketing and sales programs, to attract the best leaders and staff, to assist the government in supplying its desired housing policies, and to achieve our target rates of return on investment.