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The average cost of Redco’s land bank was around CNY1,000 per square metre (sqm) as of end 2015, with more than 60% of the land was acquired before 2013 at low average cost of around CNY300 per sqm. Limited Business Scale: Redco’s scale with contracted sales of CNY4.1bn in 2015 is the smallest among rated peers in the ‘B’ category. Although it has sufficient land bank to support sales expansion for the next five years, Redco will still face significant pressure in replenishing its land bank given the rising land cost, increased competition for land, and its limited financial resources.

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