DEAR SHAREHOLDERS,
I hereby present the Chairman’s Statement for 2024 on behalf of the board of directors (the “Board”) of China New Town Development Company Limited (hereinafter referred to as the “Company” or “China New Town”, together with its subsidiaries, the “Group”).
WITH CHINESE ECONOMIC DEVELOPMENT ON TRACK SUPPORTED BY NEW QUALITY PRODUCTIVE FORCES, THE GROUP HAS MAINTAINED STEADY OPERATING PERFORMANCE
In 2024, China’s economy achieved steady progress amid complex domestic and international environments. The annual gross domestic product (“GDP”) grew year-on-year by 5.0%, reaching a total of RMB134.9 trillion, demonstrating strong resilience. In terms of economic growth drivers, the contribution of consumption, investment, and net exports was 44.5%, 25.2%, and 30.3%, respectively. Foreign trade performance in 2024 was outstanding, with total imports and exports reaching a historic high of RMB43.85 trillion. Trade with Belt and Road countries accounted for over 50%, with significant growth in exports of high-tech products.
On the industrial front, traditional industries advanced action plans to enhance the core competitiveness of manufacturing. New achievements were made in the high-end, intelligent, and green development of manufacturing, facilitating the transformation of technological creativity into societal productive forces. The steady development of new quality productive forces has injected continuous new momentum into high-quality economic growth. Progress was also made in integrated circuits, artificial intelligence, aerospace, and other fields in 2024, further expanding emerging industries and gradually forming new pillars of the industrial system. While driving economic growth, these developments have also provided new ideas and opportunities for corporate growth.
2024 was a pivotal year for the Company to accelerate the focus on its core business and strategic transformation, following the path of “clear principal business → integration and development → value enhancement”. With the support of shareholders, namely Wuxi Communications Industry Group Co., Ltd. (hereinafter referred to as “Wuxi Communications”) and China Development Bank Capital Corporation Limited (hereinafter referred to as “CDBC”or “CDB Capital”), the Company maintained stable operations amid domestic economic opportunities and challenges, particularly the positive developments in the new economy sectors. While ensuring stable income from fixed-income investments and the operation of Wuhan property projects, the Company explored and invested in new economy sectors such as integrated circuits, information technology, and new energy through fund investments and minority equity investments, achieving sound operational performance.
As of 31 December 2024, the Company recorded an operating income of RMB412 million and an operating profit of approximately RMB100 million, and proposed to distribute annual dividend of HK$0.0039 per share to reward shareholders.
POOLING OUR COLLECTIVE WISDOM AND EFFORTS TO ENSURE THE STABLE INCOME FROM THE GROUP’S CORE BUSINESS IN 2024
In recent years, fixed-income investment returns and rental and management fee income from Wuhan properties have been significant components of the Group’s revenue. In 2024, despite unfavorable market conditions such as macroeconomic fluctuations and declining domestic investment yields,the Company, under the leadership of its management team, maintained stable income across its core business segments. The fixed-income investment business generated approximately RMB184 million in revenue, while the Wuhan property projects contributed about RMB133 million in rental and management fees, remaining largely stable compared to 2023. These segments truly served as the foundation and stabilizer for the Group.
While ensuring stable investment returns, the Group proactively shifted its investment portfolio toward economically developed regions in 2024, considering the different situations of regional economic development in China and the matching degree of returns and risks of fixed income investment regions. For the first time, the Group implemented investment projects in Zhejiang Province. Additionally, the Company strengthened post-investment management by conducting proactive research and communication with investee regions and entities during pre-investment and investment periods, fostering strong cooperation and mutual trust. In 2024, all fixed-income projects received investment returns on schedule, and invested amounts were safely recovered upon exit.
The Wuhan Optical Valley property project company focused on improving office building management and enhancing the quality of the commercial district in 2024 to increase tenant retention. Simultaneously, it employed diverse promotional and creative activities to attract potential clients and expand its customer base, aiming to stabilize rental and management fee income for the entire property.
CONDUCTING IN-DEPTH RESEARCH TO ENHANCE RESOURCE SYNERGY AND COLLABORATION WITH SHAREHOLDERS IN EXPANDING INTO NEW ECONOMIC SECTORS
In 2024, the Group continued to explore business transformation direction towards new economic sectors, while fully leveraging shareholders’ resource advantages to enhance collaborative synergies.
First, the Group has fully utilised the advantages of industrial resources endowment in Wuxi region. In 2024, the number of industrial clusters in Wuxi with revenue exceeding RMB200 billion has increased to seven, with the estimated future industry scale exceeding RMB100 billion, forming a solid foundation and advantage in new economy industries, which provided significant impetus for the Group to identify new economy investment sectors. In 2024, the Group jointly established Xinsheng Investment Partnership (Limited Partnership)* (新晟投資合夥企業（有限合夥）) with a subsidiary of Wuxi Communications. The Limited Partnership would prioritize investments in internet of things, integrated circuits, biopharmaceuticals, high-end manufacturing, energy conservation and environmental protection, new materials and semi-conductors and other industries. Wuxi Tonghui Capital Company Limited* (無錫通匯資本有限公司) and Wuxi Guosheng Asset Management Company Limited* (無錫國晟資產管理有限公司) served as Junior-Tranche Limited Partner and General Partner respectively. The target industries in which the Limited Partnership proposed to invest align closely with the Group’s target new economy sectors and the advantages of industrial resources endowment in Wuxi region. Both Wuxi Tonghui and Guosheng Asset possess substantial experience and expertise in these target sectors, with prior investments mainly concentrated in new energy, high-end manufacturing, aerospace and other industries. We therefore believe the establishment of the Limited Partnership will effectively integrate regional advantages of shareholders and collaborative strengths of outstanding partners, enhancing the Group’s capability in targeted investment identification and project screening.
In addition, the Group empowered minority equity-invested enterprises, assisting companies in industries such as smart driving and low-altitude economy to establish operations in Wuxi. This not only expanded the strength of regional industrial clusters but also promoted the business growth of related enterprises, achieving win-win outcomes.
Second, as a renowned domestic industrial investment institution, CDB Capital also possesses extensive industrial investment experience and resources. In 2024, the Group has continued to maintain close communication with CDB Capital, and combined with the industrial investment funds managed by CDB Capital to share resources in terms of project channel resources, industry background knowledge and communication with invested enterprises, so as to enhance the breadth and depth of project access.
By leveraging the industrial development advantages of shareholders and the industry resources accumulated and accessed through minority equity investments, we believe effective synergies can be formed to help the Group clarify its transformation direction in new economy sectors as soon as possible.
STRENGTHENING INTERNAL CONTROLS AND ENHANCING CORPORATE MANAGEMENT
In 2024, the Group continued to adhere to the management philosophy of “addressing daily tasks rigorously and maintaining strict standards”, reinforcing internal management to build a listed company that meets the requirements of modern corporate and stateowned enterprise governance.
First, in terms of project investment management, the Group upheld the investment principle of “prioritizing safety and stability”, strengthening pre-investment due diligence, mid-investment reviews, and post-investment management. The project team actively formed a good foundation of mutual trust with invested enterprises through various means such as market analyses, research and study, and visits. On the basis of establishing long-term good cooperative relationships, the Group ensured that there were no new risky projects emerged during the year.
Second, in terms of internal risk control management, the Group insisted on a rule-oriented approach, focusing on the sorting out and implementation of systems. In conjunction with the development of the Group’s business, the Group has sorted out various management systems and updated and revised them in a timely manner in accordance with the needs of business development, so as to ensure that the systems management framework can support and adapt to the needs of the business. In accordance with the provisions of the relevant state-owned enterprise control system and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Group regularly reviews and evaluates the effectiveness of the Group’s risk management and internal control, with a view to enhancing risk identification and early warning capabilities and strengthening the foundation of internal control management. Any identified issues will be immediately rectified to ensure the effectiveness of internal control measures.
OUTLOOK FOR 2025
2025 marks the final year of China’s 14th Five-Year Plan. The central government will adhere to the principles of seeking progress while maintaining stability, promoting stability through progress, upholding fundamental principles while breaking new ground, and ensuring systematic integration and coordinated efforts. More proactive and impactful macroeconomic policies will be implemented to accelerate the construction of a new development paradigm and advance high-quality development. For the Group’s business development, 2025 will be a critical year for defining its core business direction and formulating its 15th Five-Year development strategy. The management team will lead all employees to work diligently and proactively to achieve the Group’s operational goals for 2025.
ADHERING TO GOAL ORIENTATION AND FOCUSING ON STRATEGIC DEVELOPMENT TO ESTABLISH CORE BUSINESS
After two years of exploration and minority equity investments, the Group has accumulated certain resources and insights into the new economy sectors and made certain progress. In 2025, the Group will make use of this accumulation to clarify the direction of its target business transformation as soon as possible to establish a new core business focus. At this critical juncture, the Group will, on the premise of giving priority to stability, proactively pursue progress, and strive to complete the selection of industries and targets for mergers and acquisitions (“M&A”) as well as identify the direction of M&A as early as possible in 2025.
During the process, the Group will fully grasp the direction of national industrial policies and leverage the resource endowments and industrial advantages of its shareholders to act with precision. Wuxi Communications, as a substantial shareholder, will continue to actively support the Group’s business development, facilitating resource sharing and collaboration to achieve synergistic effects where 1+1＞2.
ADHERING TO STEADY AND SOLID PROGRESS TO MAINTAIN STABLE INCOME FROM EXISTING CORE BUSINESS
While actively exploring and defining new economy sector directions, the Group will also focus on its two core business segments — fixed-income investments and the Wuhan Optical Valley property projects — in 2025 to solidify its income foundation.
Amid domestic interest rate cuts and reserve requirement reductions, market liquidity remains abundant, exerting further downward pressure on investment yields in high-quality regions and increasing the difficulty of securing and maintaining project investments. Facing these challenges, the Group will intensify efforts to develop high-quality regions in 2025, leveraging existing client relationships to identify new investment opportunities. Additionally, aligning with the policy direction of economically developed regions to develop new quality productive forces, the Group will integrate fixed-income project development with equity investments in new economy sectors, fostering comprehensive cooperation with investee regions and entities. This approach will not only expand fixed-income projects and partnerships but also diversify income streams.
In 2025, the Wuhan property market will continue to face risks such as intense competition and price wars. To counter this, the project company will enhance client acquisition efforts, improve overall competitiveness through high-quality property management, and fully explore the relocation needs of target clients and expansion needs of existing tenants. It will maintain strong collaborations with existing marketing channels while exploring new partnerships and incentivizing channel cooperation. The Group will also actively participate in corporate events organised by enterprise groups, industry associations, and government activities to expand channel and information resources and maximize client acquisition.
For commercial operations, the Group will collaborate with tenants to organize diverse and interactive events to boost the commercial district’s appeal. Creative and attractive multimedia campaigns will be launched, leveraging new media resources to establish the property as a landmark for offices and dining, aiding leasing efforts. The overarching goal is to maintain stable occupancy rates and rental income for office and commercial spaces in 2025.
PERSISTING IN MODEL INNOVATION AND CONDUCTING VARIOUS FINANCING ACTIVITIES IN 2025
To better support the Group’s subsequent strategic transformation and business development activities, in 2025, the Group will make better use of the domestic and international financing markets, maintain close communication with market institutions, insist on model innovation and exploration, and launch diversified financing activities, including bonds and bank loans. Wuxi Communications, as a substantial shareholder, will provide necessary credit enhancement measures to help the Group secure favorable financing terms and scale.
Diligence leads to mastery, pursuit leads to attainment, and persistence leads to fulfillment; success stems from thoughtful planning, decisive action, and steadfast execution. The Company has now entered a phase of active development, with a path ahead filled with glory and dreams. Under the correct leadership of the Board, let us unify our thoughts, build consensus, strengthen confidence, and work diligently to seize the new trends and opportunities in China’s economic development. Together, we will overcome challenges and achieve new milestones in the Group’s business development, delivering sustained returns to all shareholders.
Finally, on behalf of the Board, I express my sincere gratitude to all shareholders, investors and partners for their unremitting support to the Company in the past year. I also express heartfelt respects to the directors, management team and all staff for their hard work. We will continue striving to create long-term value and benefits for all shareholders.