Hi, the following is extracted from another forum... thought it makes a lot of senses.. China New Town ($0.03) a. Has completed C-bond repurchase two months ago, credit risk substantially reduced b. Price at all time low due to substantial one-off non-cash impairment charge in Q3, NAV > $0.20. c. If no more impairment charge, I expect they should start to report profit next year. d. IPO at $0.83 in Nov 07, A potential multi bagger when market turn arround. From the printed reports, b/sheet etc it does look a terrific bargain now with suggest new NAV at .20. Unless the china heartland property (residences and apartments) recovers soon, CNT could be laden with heavy cost carrying for loans due to uncompleted property projects. So this cash-strapped company could be seeing an undesirable revenue \'dead\' or inadequate but heavy expenses outflow in the meantime... OR unless some chinese fairy godmother waves her magic wand and, HEY PRESTO, funds are available to re-start stalled projects. However, if the China Central Bank starts to seriously reduce prime rate and bank ratio... and REDUCE THE DOWNPAYMENT OF 40% for heartland purchasers... there could be some hope, if not a white knight to the rescue but at a cost of heavy new placement shares which would cause further base dilution. Maybe at 2 or 1c i may tikam some... and willing to write-off if things go sour... but hopefully not for the sake of existing shareholders.
:laugh: :laugh: Total 605 million shares issued to bondholders at $0.11. The early repurchase of bond by the company was very timely, if delay for another month, this deal may not be able to conclude and poise real risk for the survivor of CNT amid a very tight global credit market. We must commend the management for it foresights and negotiation skills to have concluded such a deal. The mark-to-market loss of RMB 227 mn that resulted from the bond purchase has already been disclosed in the August\'s circular, the RMB 220 mn non-cash revaluation loss is not unexpected due to the general state of the property market in China. The above write-off will reduce RMB 0.223 per share from current net assets value of RMB 1.208, the new NAV will be RMB 0.985 or S$ 0.21, still 5X of the current share price. While these loss look horrible, it is non-recurrence; it help to clean up the balance sheet and provide a new leaf of life for CNT, with more stimulus measures being introduced by the Chinese government to beef up the property market, and the refinancing problem removed, we may see a long term uptrend for CNT. Vested.
I have a question: CNT\'s total asset is 7.2 bio RMB, total liability is 4.7 bio RMB and total equity is 2.5 bio RMB. if the value of its total asset dropped by 30 pct, its total equity will be 0.34 bio RMB, implying a NAV of 5 sgd cts, excluding the financing and admin expenses. if the value of its total asset dropped by 40 pct, its total equity will be negative, implying a share price of 0.5 sgd cts in sympathy of this company. any comment on this? thank you.
dec 5: (XFN-ASIA) - China New Town Development said it has sorted out its > short-term financing problems after a string of losses and the > repurchase of convertible bonds. > The Singapore-listed company also said that as a result of its > improved financial position it expects to secure a key loan from > Chinese banks around the lunar new year to expand its business. > \"We expect to obtain a 1 bln yuan loan from banks around the > lunar new year to fund new projects in Shanghai,\" said Ben Cheng, the > company\'s chief financial officer. > The Hong Kong-headquartered company reported a higher than > expected third quarter net loss of 515 mln yuan mainly due to the > buyback of the 5 pct US dollar settled convertible bonds and the > mark-to-market treatment of the instruments. > \"We have bought back all the convertible bonds at a cost of 593 > mln yuan. Now we do not have any financial problems,\" Cheng told > XFN-Asia in an interview. > China New Town\'s core business is preparing land for development > by installing infrastructure. This accounted for 71.4 pct of its total > revenue of 363 mln yuan in 2007. > The company booked a net loss that year of 287 mln yuan due > mainly to a one-off non-cash accounting charge resulting from the > losses from pre-initial public offering convertible bonds. > Cheng said that the company has sought to diversify its income by > developing more commercial properties in new residential areas, with a > focus on golf courses and hotel operations. Management hopes that > these will provide a steady flow of income, in light of the uncertain > frequency of sales of land use rights. > \"A key point that should be highlighted is that we are not a > property developer,\" said Cheng. \"We develop, clear and prepare a > majority of residential plots in each of our new town projects so that > they are suitable for sale by the relevant land authorities to > third-party residential property developers.\" > Cheng said that the company handles only around a dozen > transactions per year, unlike a property developer which usually > conducts the sale of hundreds and thousands of units. > \"Falling property prices do have an impact on us but the impact > is not as significant as on the property developers,\" Cheng explained. > \"The only problem for us is the buying ability of those property > developers may be impaired. But we will not suffer losses from it > unless the market prices slumps more than 70 pct,\" Cheng added. > The company\'s four existing projects are in the Yangtze River > Delta and the Bo Hai region in north China. These include its Luodian > project in Shanghai, which is 98 pct complete; its Wuxi project, which > is expected to be completed in 2011; its Shenyang project, which will > be finished in 2012; and its Changchun project , which is also > expected to be ready by 2011. > These sites are being prepared for commercial or residential > development. > The Luodian project has a site area of 6.8 sq km and is in > Shanghai\'s Baoshan district. It is part of the nine experimental towns > in the Shanghai government\'s \"One City, Nine Towns\" development plans, > which is a government led campaign to expand the city with new > suburban areas built in a different Western styles. > \"We expect revenue from the Luodian project in 2009 to reach 1 > bln yuan, and the Shenyang project could generate 20 or 30 mln yuan,\" > said Cheng, adding that there could be further revenue later. > He also said the company is focusing on opportunities from > urbanization. > \"Urbanization is not dependent on economic cycles. China\'s rapid > pace of urbanization has created business opportunities for township > developers, in particular around the major cities,\" said Cheng. > He added that the long term opportunities are considerable. > \"We have resolved our short-term financing issues, and we believe > we will emerge from the current economic downturn as a stronger player > in the Chinese property industry,\" said Cheng.
SGX is a penny stock market and for a stock to trade at almost lowerst band of penny stock does speak a lot. Until the storm is over, I personally do not expect a sustainable rise except very short term speculation. Time to protect our cash.
investsgx.blogspot.com/2008/09/china-gho...ap-back-smartly.html
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