Company News

  • Jun 30, 2014
  • Supported by the parent group, CDB Capital CNTD collaborates with Yuhuatai District Government, Marching into Nanjing to establish a new city centre
  • (Hong Kong and Singapore, 30 June 2014) ― China New Town Development Company Limited – the future blueprint planner and leading developer of integrated new towns in China (the “Company”, “CNTD”, the “Group”; HKSE: 1278.HK; SGX: D4N.SI, its ultimate controlling entity is China Development Bank Capital Corporation Ltd. (“CDB Capital”)), is pleased to announce that the Company has on 30 June 2014, entered into the Cooperation Framework Agreement (the “Agreement”) regarding the Yuhuatai District Tiexin Bridge (鐵心橋) - Xishan Bridge (西善橋) Regional Urban Re-development Project and Software Valley South Park Development with the People’s Government of Nanjing Yuhuatai District and CDB Capital. The signing parties agree to devote concerted effort in promoting the development of the Two Bridges Project and Software Valley South Park, to build a modern urbanization model facilitated by high-end industries, commercial and leisure, culture and tourism, as well as living functionalities. 
    Pursuant to the Agreement, Yuhuatai District Government shall designate a funding entity to jointly with the Company to invest RMB1billion in proportion of their respective shareholding (ie: the government: 51% and the Company: 49%), and set up the Nanjing CDB Yuhua Slum Area Transformation and Re-development Company Limited (南京國開雨花棚戶區改造發展有限公司, “CDB Yuhua”), as the primary land development platform authorized by the Yuhuatai District Government for the Two Bridges Project and Software Valley South Park. The Yuhuatai District Government shall also designate Nanjing Software Valley Development Company Limited (the “Software Valley Company”) to establish a joint venture company under the Company’s control for joint participation in secondary land development. .
    Riding on the favorable national policy of urbanization, the collaboration is a showcase of the parent group’s mission to support construction of China’s urbanization, 
    China’s urbanization rate is substantially below the common standard of developed countries, and has an obvious space to catch up. An urbanization process with Chinese characteristics was emphasized in the 18th National Congress of the Communist Party of China. The congress indicated that such process which includes facilitating the development of large-to-mid sized cities, coordinating the development of small towns, integrating industry development into new towns, a balanced urbanization, the infrastructure of new rural villages, and enhancement of integrated carrying capacity of the cities has been promoted to a level of national policy, with new direction and new driving force.
    CDB Capital, the ultimate controlling group of the Company, is a wholly-owned subsidiary of China Development Bank(“CDB”). Since its establishment, CDB has vigorously supported China’s urbanization and construction of infrastructure, and has established deep-rooted relationships with each level of the government. Two Bridges Project is not only a new exploration to China new town business models which is in line with CDB’s mission, but also adheres to the above-mentioned national policy which advocates incorporation of industry development into new towns.
    With its prime location, Two Bridges Project enjoys enormous upside potential
    The choosing of the location of Two Bridges Project reflects thorough consideration on market trend and the supportive effect on national policy in macro scope. Nanjing is the provincial capital as well as the largest city of Jiangsu, with its disposable income per capita RMB39,881. The demand and supply of the residential property market has maintained healthy. Jiangsu Province issued Planning re. New Model Urbanization and Integrated Urban and Rural Development (<<新型城鎮化與城鄉發展一體化規劃>>), explicitly outlining the objective to achieve full urbanization for the province by 2020, offering exciting new development opportunities in the region. 
    As Land resources for development in Nanjing becomes scarce, superb regions such as Yuhua, Jiangning, and Qixia are to become the main sources of land of the city. Two Bridges Project is located at the centre of Yuhua, and the prime zone of Nanjing Software Valley, China’s largest base of communications software. It is located in 2 km west of the centre of Hexi, Nanjing’s future CBD, and 1.5km east of South Nanjing Station, an emerging core district. Two Bridges Project is an important hub of the golden development corridor of Southern Nanjing, holds a strategic position in the facilitation of the regional cohesiveness. The planned area for redevelopment in the city cluster is 21.4
    The spokesperson for CNTD said, ‘Two Bridges Project captures opportunities arisen from the steadily growing residential property market of Nanjing and enjoys stable growth potential. Furthermore, located at Nanjing’s main source of residential land resources, the project is expected to release enormous upside potential after development and is expected to become a regional core. The project area is to be completely reconstructed to upgrade the integrated carrying capacity and to incorporate with industry development. The plan is in sync with the goal set by the national policy of new urbanization.’
    The Project enjoys the financial and resources support from both of CDB and CDB Capital
    The collaboration would not have been reached without CDB Capital’s business network, government’s resources, and the signing parties’ support to the Company. This is a showcase of the profound resources privileges generated by the ultimate controlling shareholder. The Company will seek the financing support from CDB to establish a strong financial position to the project. Meanwhile, CDB Capital agrees to open up resources from its China Urbanization Strategic Alliance to the Yuhuatai District Government, introducing quality resources and business partners to Two Bridges Project.
    Speaking of Two Bridges Project and the construction of Software Valley South Park, the spokesperson of CNTD said, ‘Being CNTD’s controlling shareholder, CDB Capital has granted every critical support to Two Bridges Project, which was the foundation for the Company to strive for better conditions of the land development, and a promoting force to this three-party cooperation. The project enjoys enormous upside potential, and is expected to be another landmark project of the Company.’
    Stable stream of income which is favorable to the sustainable development of the Company is to be created by the innovative project model
    Thanks to the supported of CDB Capital with its profound financing capacity, expertise at development, business network and deep-rooted relationship with the government, Two Bridges Project has attained multiple policy concessions. Such collaboration with the CDB Capital and local government is an innovative project model.  Yuhuatai District Government intends to procure its controlled subsidiaries or entities to offer an after-tax investment return of 12.8% on the equity capital that the Company contributes into CDB Yuhua with regard to the Company’s capital injection into the joint venture. Meanwhile, with the support and help of Yuhuatai District Government, the Company shall acquire certain land parcels within the project through market mechanisms for secondary land development, further exploring profit source and return potential from the project. The Company will keep abreast of the market trends and its vision and business directions to handle the relevant lands with a view towards more revenue streams and maximized return for shareholders. In addition, up to 50 percent of district-retained portion of business taxes, land appreciation taxes, corporate taxes and personal taxes arisen from the operations of the JV Company under the Company’s control or the wholly-owned subsidiary of the Company that are registered in the Yuhuatai District can be used to support the development of the Company and the JV Company, through financial support or government led public utilities constructions.
    CDB Capital provides loans to CNTD for a financial foundation to the Company’s business development
    Besides, pursuant to the Company’s agreement dated 27 June, the Company, CDB Capital would extend a half-year unsecured loan of RMB1 billion to the Company. This financing arrangement is significant to the development of the Company. The loan is together with the income from the CDB Capital’s subscription of the Company’s shares, and consideration received on schedule from asset disposal injected in the Company’s cash pool, constituting strong cash flow for the Company, immediately reducing the Company’s financing cost, facilitating the paces of the existing project developments as well as procuring new projects.
    With the vigorous financial support from CDB Capital, CNTD will accelerate the paces of constructions in its projects, optimize project and revenue combinations, on track to building the No.1 brand in the field of China’s new urbanization.
    CNTD is committed to building model towns of modern urbanization and strive to be the leading brand of China’s urbanization
    To support CDB Capital’s China Urbanization Strategic Alliance, the Company will introduce leading international township developmental and operational ideas, and contracting the development and operation works of the basic ancillary infrastructure construction for the standards of a green town, smart town and new energy town. Meanwhile, the Company will leverage off CDB Capital’s China Urbanization Strategic Alliance to bring in quality strategic partners along the entire urban development value chain. Starting from the construction of infrastructure, the Company is to establish the model of CDB New Towns. The Company takes up the leadership in the construction of China’s new urbanization, develop smart and green cities with integrated functions and upgrade the carry capacities of these cities, so as to incorporate industry development into the new town, and foster its long-term value, as the part of its contribution to the process of China’s new urbanization.
    About China New Town Development Co. Ltd.
    (HKSE: 1278.HK; SGX: D4N.SI) 

    With its new town development founded in 2002, China New Town Development Co. Ltd. was first listed on the SGX in 2007 and dual listed on HKSE in 2010. It is a company dedicated to planning and developing new town projects in the PRC. Its actual controlling shareholder is China Development Bank Capital Corporation Ltd. (“CDB Capital “). CDB Capital is a wholly owned subsidiary of China Development Bank. Its establishment was approved by the State Council. With a registered capital of RMB 47.6 billion, CDB Capital is a unique integrated investment platform covering both domestic and offshore markets. Its investments cover areas the strategic new model township developments, overseas investments, and funds. Integrated new model township development is one of the core businesses of CDB Capital. Through its unique business model, the Company forms joint ventures with local governments to develop new town projects, and participate in the full range of activities including master planning, resident relocation and resettlement, land clearing and preparation, construction of infrastructure and high quality ancillary facilities. It also introduces quality brands and leading real estate developers into the new towns it operates to enhance the long term value of the town and its land resources. It then shares part of the value enhancement upon land sales. Starting from 2002, the Company has been engaged in the development of Shanghai Luodian New Town, Wuxi Hongshan New Town and Shenyang Lixiang New Town. Among them, the Luodian New Town has entered maturity phase and received international and domestic recognition for its innovative new town design and execution. The Luodian New Town was granted the prestigious status of “United Nations Development Program Pilot Town” by the United Nations Development Program and “National Development and Reform Pilot Small Town” by the National Development and Reform Commission (NDRC). Recently, it was awarded the “EU Small Town Union – Representative Member from Asian Pacific”.