PLA training helps builder read political landscape
Having served in the People's Liberation Army for 17 years, Shi Jian understands the value of following political direction.
Applying this philosophy to business, the chairman of China New Town Development founded the company, which focuses on developing new towns in the suburbs of mainland cities.
'I have learnt a lot during my service in the PLA, but the most important lesson I learnt is that one must have a clear understanding of the political direction. Developing new towns is definitely in the right political direction,' said Shi. 'As urbanisation gathers pace in China, more and more new towns will be built to meet the housing needs of a growing urban population.'
According to an official report released in late September, the rate of urbanisation on the mainland reached 46.59 per cent by the end of 2009 and will reach 65 per cent in 2030 - close to the level in Western countries.
Every year, more than 10 million people move to cities on the mainland.
Formed in August 2002, China New Town focuses on large-scale township projects, covering everything from drawing up the design of the town, relocating existing residents and building the infrastructure to developing public facilities and private properties such as hotels and golf courses.
The company was spun off from Hong Kong-listed mainland developer SRE Group for a separate listing in Singapore in November 2007.
Now the company is readying for a listing by introduction in Hong Kong on Friday.
Shi, who is also chairman of SRE, said China New Town chose Singapore as the first exchange to list three years ago as its requirement of profit track record was lower than that of the Hong Kong bourse.
As the company's profitability improved, it decided to seek a second listing in Hong Kong. 'The Hong Kong listing will increase the investor base and can also increase the liquidity of our shareholders,' Shi said.
China New Town is developing three projects in joint ventures with local governments on the mainland. The bulk of its revenue comes from land sales from its sites at the three new towns. These include Luodian in Shanghai, Hongshan in Wuxi and Lixiang in Shenyang. Between them, they have a total buildable area of 19.5 million square metres.
Land prices in Luodian, which has been under development for eight years, had surged but the growth in land prices at the other projects had been more modest, Shi said.
Analysts said the company could reap the benefits of land appreciation over the long term, but short-term profitability would be subject to land sales schedules.
Mainland land prices in 105 cities rose 9 per cent year on year to 2,805 yuan (HK$3,271) per square metre in the third quarter, a Xinhua report said yesterday.
