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COMMERCIAL PROPERTY, RESIDENTIAL PROPERTY | Tony Chua, Hong Kong
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Sino Harbour Property lists on Main Board of HKSE

The property developer offers 300,000,000 new shares at the range of HK$1.10 to HK$1.68 per share.

Sino Harbour Property Group Limited (“Sino Harbour”), a developer of residential and commercial properties in the fast growing cities in Jiangxi Province, the PRC, announced the details of its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited (“HKSE”) on Monday. Sino Harbour is spun off from Pan Hong Property Group Limited (“Pan Hong”), a company listed on the Main Board of The Singapore Stock Exchange since 2006.

Sino Harbour intends to offer 300,000,000 new shares (subject to adjustment and the over-allotment option) in aggregate with 270,000,000 shares, or 90% of the offered shares, for placing and 30,000,000 shares, or 10% of the offered shares for the public offer in Hong Kong.

The offered new shares will be priced at the range of HK$1.10 to HK$1.68 per share, according to a Sino Harbour Property report. .

Assuming the offer price is HK$1.39 per share (being the mid-point of the offer price range) and that the over-allotment option is not exercised, net proceeds from the share offer (after deducting related expenses payable) will be approximately HK$387 million.

The public offer will begin on 12 July 2011 (Tuesday) and end at noon on 15 July 2011 (Friday). Dealings in the offer shares are expected to commence on the Main Board of HKSE on 22 July 2011 (Friday) under the stock code 1663. Shares will be traded in board lots of 2,000 shares. Kingsway Capital Limited is the Sole Sponsor. Kingsway

Financial Services Group Limited is the Sole Bookrunner and it, together with OSK Securities Hong Kong Limited, are the Joint Lead Managers of the share offer. Sino Harbour is a property developer of property projects in Jiangxi Province, the PRC, reputed for its property projects targeting middle- to upper-class markets. Sino Harbour’s projects have earned numerous industry awards over the years. The Group has proven ability to acquire quality land resources at relatively low costs, and the locations of its land reserves are diversified and benefited by the PRC government’s policies for accelerating the pace of economic development of the central region of the PRC. Sino Harbour’s existing 5 projects at various stages of development cover an aggregate saleable GFA of approximately 3,215,711 sq. m. These projects include Nanchang Honggu Kaixuan, Nanchang Dingxun Project, Fuzhou Huacui Tingyuan, Yichun Project and Leping Project.

Although the global financial crisis which broke out in 2008 had affected the Group’s financial performance in FY2009, Sino Harbour recovered in a fast pace with favorable results delivered in FY2010 and FY2011. For the two financial years ended 31 March 2010 and 2011, Sino Harbour recorded revenues of approximately RMB197 million and RMB340 million respectively, representing a surge of approximately 716% and 72.8% respectively. Net profit also increased notably from a loss of approximately RMB 12.0 million in FY2009 to approximately RMB 74.3 million and RMB123.7 million respectively in FY2010 and FY2011. The Group was also able to maintain favorable profit margins. Gross profit margin has normally ranged between 40% and 50%, while net profit margin is normally above 35%. As at 31 March 2009, 2010 and 2011, gearing ratio was approximately 12.0%, 8.9% and 13.3% respectively.

By possessing quality land reserves in Jiangxi Province, Sino Harbour will be able to capture the opportunities offered by the increasing working opportunities, the ever-improving quality and standards of living and the increasing market demands for residential properties in those cities. Furthermore, with the improving national railway systems and transportation networks of the PRC and the more affordable costs of living in Jiangxi Province as compared with other developed cities and provinces of the PRC, such region will be more attractive to people who demand for a better living quality, thereby benefiting the residential property market in the region.

Leveraging on the strong support from its parent company, Pan Hong, which has more than 15 years of property development experience in the niche markets in central China, Sino Harbour intends to further expand its property development business in Jiangxi Province. Spearheaded by the experienced management team, Sino Harbour has its own dedicated sales and marketing team to implement customized strategies for each project. It does not need to rely on sales agents to promote and sell its properties which helps boost profitability as no agency fees are needed.

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