(EQS-News / 08/05/2015 / 11:43 UTC+8)
China New Town Development Co. Ltd Plays A Pivotal Role in China
Development Bank's Strategic Layout of New Urbanization
Urbanization is the most important part of China's national policies in
recent years. Although its 1st and 2nd tier cities are rather developed,
the country's urbanization rate still has tremendous potential to rise as
compared to the developed world. Among all the companies listed on Hong
Kong Stock Exchange, there is a company engaged in integrated new model of
urbanization - China New Town Development Co., Ltd. ("CNTD", Stock Code:
1278.HK). It has emerged as a supernova in the country's new town
development, particularly since China Development Bank's ("CDB") takeover.
With CDB's active support in CNTD's project development and financing, CNTD
takes up its mission as a unique and important platform for promoting the
urbanization process of China.
The acceleration of urbanization process makes the redevelopment of shanty
town areas imminent.
In the 18th National Congress, China Communist Party clearly indicated that
China is determined to innovate its own new model of urbanization, to focus
on promoting cohesive developments of each tier of cities and towns,
integrating industrial development with town developments, promoting
coordinated developments between cities and new towns and enhancing
municipal capacities. Since then, urbanization was upheld as a core
national policy. The "National New-type Urbanization Plan (2014-2020)"
published in March 2014 put forward that China's permanent population
urbanization rate to reach 60%, and the urbanization rate by household
registration to reach 45%, respectively, by 2020, as part of an initiative
to create the environment for 100 million agricultural population to
relocate and settle. Being the largest development finance institute in the
world, CDB rides on the national strategy and plays a dominant role in the
entire process. In 2014, the State Council procured People's Bank of China
to provide a RMB 1 trillion loan to CDB. The loan will be used on shanty
town redevelopment projects nationwide. Last year, CDB released RMB400
billion loans on shanty town redevelopment projects nationwide, which
represented over 90% of such loans in China.
As CDB takes up the role as the pillar in financing shanty town
redevelopment projects, no doubt it has abundant access to first-hand
business opportunities of quality projects. On 28 March 2014, China
Development Bank Capital Corporation Limited ("CDB Capital"), a
wholly-owned subsidiary of CDB, subscribed 54.3% of the shares of CNTD.
CNTD, thereafter, became the sole listed and operational platform in CDB
and CDB Capital's new model urbanization related businesses, to consolidate
the downstream new town development businesses available to CDB. The
rationale behind CDB's acquisition of CNTD was not merely a commercial M&A
but an essential part of CDB's new urbanization business blueprint.
By combining CNTD's operations and expertise on new town development and
CDB Capital's advantages in project resources and brand awareness, CNTD is
uniquely positioned to grow as a nationally-known brand for new
urbanization and the core operational platform of CDB Capital.
As the urbanization process continues to improve, urbanization will become
more and more important engine that sustains the balanced growth of China's
economy. Meanwhile, the market of "Smart City" which integrates low carbon,
environmental friendly, technology with sustainable lifestyle has
attractive potential. With CDB Capital's vigorous support, CNTD is now
equipped with all the essential elements of success to take off in this new
era of urbanization.
CDB Capital's strategic subscription and continued involvement and support
CNTD was listed on Singapore Stock Exchange in November 2007 and became
primarily dual-listed on Hong Kong Stock Exchange by way of introduction in
October 2010. It has 13-year experience of township development and has
accomplished quality projects. In 2013, CNTD announced that 5.348 billion
new shares would be issued to CDB Capital, and after the completion of the
transaction, CDB Capital holds more than 54% interest in CNTD and becomes
its controlling shareholder.
Since its establishment, CDB has continuously supported China's
urbanization and infrastructure and has developed in-depth cooperation with
each level of the Chinese government. When CNTD became a member of CDB, it
did not only inherit CDB's extensive network throughout the entire country,
but also the elite top management of CDB Capital to participate in the
company's daily operations and management.
Through CDB Capital's introduction, CNTD successfully launched the Nanjing
Yuhuatai Project last November. Nanjing Project is a top-quality project in
CDB Capital's project portfolio with excellent location (central location
in Nanjing), guaranteed return on investment (strong fiscal credit of
Nanjing government) and quick land sale cycle (land secured within one year
upon project launch). Nanjing project includes Yuhuatai District Tiexin
Bridge - Xishan Bridge Regional Urban Re-development Project and Software
Valley South Park Development Project, which aims to build a modern
urbanization model underpinned by high-end industries, commercial and
leisure, culture and tourism, as well as living functionalities.
CNTD explores a new project development model by launching the Twin Bridges
Project. The Project adheres to CDB's business objectives of promoting
urbanization-related constructions and fully aligning to the national
policy on city transformation and new urbanization, namely "integrating
industrial and township development". With such attractive potential, the
Twin Bridges Project is expected to inject momentum into CNTD's project
portfolio and propel the Group's revenue growth.
CDB Capital's vigorous credit support enhancing CNTD's financing capability
In addition, CNTD has announced two financing arrangements recently. On 21
April 2015, a subsidiary of the Company, Shanghai Golden Luodian, has
obtained project development loan from ICBC, among which the first batch
RMB 260 million of 5 years term was secured at or below the benchmark PBOC
rate. The loan was unconditionally guaranteed by CDB Capital.
In addition, on 29 April 2015, the company announced that it completed an
issuance of guaranteed notes at an offering size of RMB1.3billion. The
guaranteed notes, with tenor of 3 years, was issued at coupon rate of 5.5%.
The net proceeds, amounting to approximately RMB1.293billion, will be used
for general corporate working capital. The deal is reported to be one of
the largest RMB bonds in Hong Kong this year. CDB Capital supported CNTD's
credits through a keepwell and liquidity support deed and a deed of equity
interest purchase undertaking. This is the first time ever that CDB Capital
provides such strong support to its subsidiaries for a public bond
issuance. The transaction reflects the level of support CDB Capital commits
to the Company, and its unique role within the CDB system.
With the support from the CDB system, CNTD has accomplished multiple
milestones. It enjoys privileged positions in terms of support in
financing, business development and management talents. Soon the Company
shall make remarkable contribution to China's urbanization process and
become a leading force in shanty town redevelopments nationwide.
End of Press Release
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Document: http://n.equitystory.com/c/fncls.ssp?u=VVAUAMFSVX
Document title: China New Town Development Co. Ltd Plays A Pivotal
Role in China Development Bank's Strategic Layout of New Urbanization
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May 07, 2015 23:43 ET (03:43 GMT)
