China New Town -- Worth a Punt ?

No 10 cent, no sell... If the PRC government can waiver the VAT taxes and stimulate its citizens to buy properties. This stock will fly through the roof.

China New Town, up 25% on good volume... Sit tight for 6 cents!!

Fall back to 4 cents now. I believe, going by the 3Q2008 results, the Company will announce big losses in fy2008. Main concern is whether they still have cash to tide them through 2009. And how much sales can they acheve in 2009. Wondering when is their results announcement?

The huge writedown in 4Q2008 was unexpected. Although I think they should be able to survive this crisis. Another PRC company that disappointed.

Recap of FY08 Improvements in topline were encouraging CNTD reported a sharp increase in net revenue in FY08, underpinned by land sales of its various projects. • Reported bottomline numbers are misleading, distorted by exceptional items, which includes a revaluation loss on its investment properties amounting to RMB488m. FY08 core net loss of RMB35.1m is a vast improvement from the core net loss of RMB256.9m in FY07. • This is ahead of the RMB43.7m net loss we previously estimated the difference due to higher mark-to-market valuation loss related to the repurchase of convertible bond in FY08, which are essentially nonrecurring. • CNTD was hit by the deterioration of the retail rental market. The group has provided a revaluation loss of RMB488m for the investment properties in FY08. Though not quite articulated, the group could potentially reverse the overprovision should there be a recovery of the rental market condition going forward.

Priority in Financing Financing cost, going forward will be greatly reduced as the increase in capitalization of the interest expenses kick in, in tandem with the progress of construction works. • Balance sheet seems constraint after the repayment of RMB503m Shanghai project loan in FY08. However, we think that the company will still be in good stead as it has secured RMB96m facility last month to meet FY09 working capital need. • Additionally, CNTD is finalizing its project financing facility that will step in after the group repays the RMB1.1bn Shanghai Luodian project loan that is due in Sept09. • We understand from management that the term of the project financing will be favorable as Municipals are now pushing ahead on various infrastructure projects to pump prime the economy.