CHINA NEW TOWN DEVELOPMENT

A Unique Land Development Player In China

A leading niche player in primary land development.

the only listed Chinese company that focuses on land development in China. It has 16.3m sqm of residential land

available for sale, which bodes well for land sales over the next 5-10 years.China New Town Development (CNTD) (CNTD SP) is

Beneficiary of rapid urbanisation in China.

will be built to meet the housing needs of a growing urban population. CNTD is set to benefit from this trend.As urbanisation gathers pace in China, more and more new towns

Plugged into long-term land appreciation in China.

can reap the benefits of land appreciation over a long period of time. This gives it an unparalleled advantage over

home builders who have to replenish landbank every year and take the risk of timing the market.By securing large-scale land development projects, CNTD

High margins.

could become more and more profitable on the back of land appreciation over time. In 2009, CNTD’s gross margin

hit 60%, beating listed Chinese property developers’ 34% average.As CNTD’s entry costs are almost locked in in its agreements with local governments, its projects

Dual listing to be a near-term catalyst.

Exchange by introduction. Although there will be no issuance of new shares, the dual listing should help diversify

CNTD’s investor portfolio, enhance liquidity of the stock and boost the likelihood of a re-rating.CNTD plans to seek dual listing on the mainboard of Hong Kong Stock

Key investment risks:

year, b) huge capex needed at the early stage of land development, c) CNTD being a margin player rather than a

volume player due to capex restrictions and government control of land sales schedule, d) reliance on the Shanghai

Luodian project and Shanghai property market for the next few years, and e) policy and operational risks of the

Shenyang project.a) Volatile land sales and earnings due to limited land sales for each project within each

Decent discount to NAV.

discount to NAV, which is lower than the sector’s 40% discount to NAV.We estimate CNTD’s NAV at S$0.21/share. Thus, the stock is trading at a 48%

52-Wk Range: S$0.155/S$0.100 52-Wk Avg Daily Vol. (m): 12.9 Market Cap: S$428m ROE: 7% NTA/Share: S$0.123

Net EPS EV/

Year to Turnover EBITDA Profit EPS Growth PE EBITDA DPS Yield

31 Dec (Rmbm) (Rmbm) (Rmbm) (Rmb˘) (%) (x) (x) (Rmb˘) (%)

2007 363 109 (287) (34.3) n.a. n.a. 24.5 0.0 0.0

2008 564 (455) (846) (53.4) n.a. n.a. n.a. 0.0 0.0

2009 1,087 342 167 6.0 111.2 9.0 9.8 1.4 2.5

ok just saw the SGX announcement..

after cup n handle formation .. the sky is the limit!