CHINA NEW TOWN: Lead independent director buys 500,000 shares

Henry Tan Song Kok is MD of his own accountancy firm. Photo: NTUChina New Town Development, which is dual-listed in Singapore and Hong Kong, has just undergone a transformation and a long-time independent director has voted for it with his money.

Henry Tan Song Kok, who is CNTD's lead independent director and has been on the board since 2007, has bought shares of the company in two transactions.

He is MD of Nexia TS Public Accounting Corporation, which he co-founded in 1993. (Read about him in an Nanyang Technological University article here.)

On 27 May, he scooped up 250,000 shares at 8.3 cents apiece, raising his holding to 600,000 shares.

A day earlier, he had bought 250,000 shares at 8.335 cents apiece.

He bought at 52-week lows -- a surprising weakness in the stock price despite the recent emergence of a high-profile strategic investor -- CDB Capital -- as the new controlling shareholder with a 54.3% stake.

CDB Capital is the investment arm of China Development Bank, one of China's three policy lenders.

For its stake in China New Town, CDB Capital injected HK$1.4 billion (S$226 million) into the company. 

Not only does China New Town have a stronger balance sheet now, it has access to the immense network and resources of China Development Bank.


China New Town's share price has been lacklustre owing to choppy earnings but the new controlling shareholder aims to change things. Chart: FT.com

In an interview published in the May 26-June 1 edition of The Edge Singapore, the new CEO of China New Town, Liu Heqiang, gave indications of outcomes that are being sought, including:

>> China New Town plans to return to profitability by "quickly" getting a 22 mu (1.46 ha) plot of land from its massive landbank in Luodian listed for sale.

>> This will be followed by more listings from Luodian and Wuxi later this year.

>> Efforts will be made to modify China New Town's business model such that it gets paid a fixed amount regularly for work done, irrespective of whether it has land sales or not.

>> China New Town will acquire more township projects, some of which could be assets held by CDB Capital. "This is expected to start this year."

>> China New Town is preparing to implement a dividend policy. 

"I will use performance and results to show how we operate. Let time be our judge," Liu was quoted saying.


For background, see: CHINA NEW TOWN DEVELOPMENT: Key China Bank To Subscribe For 51% Stake