New Town Holdings: 10 projects have been sold and a total of 15 billion cash will be exchanged back

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 New Town Holdings: 10 projects have been sold and a total of 15 billion cash will be exchanged back


Up to July 24, 2019, the subsidiary company of Hangzhou Julie Enterprise Management Co., Ltd. and other 10 project companies signed relevant equity and creditors rights transfer agreements with the counterparty. The total transaction consideration is about 4.154 billion yuan, accounting for 13.62% of the audited net assets of the company at the end of 2018, all paid in cash.

On the same day, Jinke Stock (000656.SZ) announced in the evening that its wholly-owned subsidiary would buy the equity of six real estate project companies under New Town Holdings at a fair price, with a total turnover estimated at 1.721 billion yuan. Jinke shares said that the transaction involves the project company mainly engaged in residential project development, after the completion of the transaction is expected to add a new capacity for the company building area of 1022,200 square meters.

The sale of the project has raised concerns about the holding capital of New Town and the growth of its future size. Affected by this, on July 23, Xincheng Holdings dropped to 26.73 yuan per share. On July 24, Xincheng Holdings opened low and ended up with a slight increase of 0.90%.

On July 24, Xincheng Holdings held an emergency board of directors, and announced the internal board of directors to clarify the current companys business strategy and future goals, in an attempt to eliminate market impact and boost confidence.

The board of directors explained that this is an asset structure optimization measure to implement the companys current business strategy, enhance risk resistance and operational robustness.

The announcement shows that the company plans to transfer part of the project companys equity and related creditors rights. The total amount of the transaction does not exceed 15 billion yuan, and there is no loss transaction, and the transfer consideration will not be lower than the input cost.

It is reported that the transfer project is a newly acquired pure residential project in the recent open market. The project is in the early stage and has not yet been sold. After the completion of the transaction, the company can add about 15 billion yuan of net cash, which is expected to reduce the follow-up development cost and expenditure of this part of the project about 3 billion yuan in the current year.

According to the company, the total value of the project to be transferred in this round is about 45 billion yuan, including 10 billion yuan in 2019, 25 billion yuan in 2020 and 10 billion yuan in 2021.

New Town Holdings said that the newly acquired net cash and the companys existing monetary funds will provide security for the companys expenditure and stable and safe operation of the remaining projects. After recovering about 15 billion yuan of land, the investment amount of New Town Holding Land in the first half of the year was about 40 billion yuan, which is still about 15% higher than the same period last year.

After the completion of the transaction, the companys land reserve is still well-balanced and the value of goods is abundant, which is sufficient to deal with cyclical rotation and market risks, ensure the companys stability and sustainable development in the next few years, increase the companys monetary funds, improve the structure of assets and liabilities, improve the companys liquidity ratio, and enhance the ability to pay debts. The board of directors of Xincheng Holdings said that in the next two years, the companys sales scale will remain unchanged at 270 billion yuan in 2019, but the rent from investment real estate will increase by 50% annually, reaching 9 billion yuan by 2021. In order to stabilize the team, New Town Holdings proposes to comprehensively enhance the benefit-sharing relationship between employees and organizations, establish a long-term staff incentive mechanism, take various positive measures to protect the interests of employees, and realize the common growth of employees and companies. Source: Liu Yuxin_NBJS7825

After the completion of the transaction, the companys land reserve is still well-balanced and the value of goods is abundant, which is sufficient to deal with cyclical rotation and market risks, ensure the companys stability and sustainable development in the next few years, increase the companys monetary funds, improve the structure of assets and liabilities, improve the companys liquidity ratio, and enhance the ability to pay debts.

The board of directors of Xincheng Holdings said that in the next two years, the companys sales scale will remain unchanged at 270 billion yuan in 2019, but the rent from investment real estate will increase by 50% annually, reaching 9 billion yuan by 2021.

In order to stabilize the team, New Town Holdings proposes to comprehensively enhance the benefit-sharing relationship between employees and organizations, establish a long-term staff incentive mechanism, take various positive measures to protect the interests of employees, and realize the common growth of employees and companies.