DEAR SHAREHOLDERS,
I hereby present the Chairman’s Statement for 2025 on behalf of the board of directors of China New Town Development Company Limited (hereinafter referred to as the "Company" or "China New Town", together with its subsidiaries, the "Group").
MACROECONOMIC PROGRESS STEADILY FORWARD IN 2025, WITH INNOVATION IN THE NEW ECONOMY TAKING THE LEAD
The year 2025 marks the concluding year of the "14th Five-Year" Plan. Amid the profound and complex changes in both domestic and international landscapes, China’s economy has adhered to the overarching principle of pursuing progress while ensuring stability, fully implemented the new development philosophy, accelerated the creation of a new pattern of development, and achieved stable growth, as well as development momentum towards innovation and excellence. According to preliminary calculations, the annual gross domestic product (GDP) exceeded RMB140 trillion, representing a year-on-year increase of 5.0%. The overall growth rate ranked among the fastest of the world’s major economies, reflecting the strong resilience of economic development. On the basis of steadily expanding economic aggregate, with continuous optimisation of industrial structure, accelerated growth of new quality productive forces, and solid and effective livelihood security, China has drawn a solid conclusion to the successful completion of the "14th Five-Year Plan".
In terms of industries, the tertiary industry accounted for 57.7%, continuing to serve as the main engine of economic growth. The added value of equipment manufacturing and high-tech manufacturing increased by 9.2% and 9.4% respectively, with their shares in the added value of industrial enterprises above designated size rising to 36.8% and 17.1% respectively. The transformation of industries towards high-end, intelligent, and green development has achieved remarkable results.
The development of China’s new economy in 2025 was defined by three core pillars of policy underpinnings, innovation-driven breakthroughs and integration-enabled empowerment, successfully achieving multiple breakthroughs in scale expansion, structural upgrading and ecological improvement within a complex internal and external environment. Throughout the year, industries related to the new economy drove a 2.0 percentage point increase in GDP, contributing over 40% to the growth.
GROUP’S 2025 OPERATING PROFIT RECORDED SIGNIFICANT GROWTH, MAINTAINING A STABLE DIVIDEND POLICY
Under the leadership of the Board, guided by the management team, and with the concerted efforts of all colleagues across the Group, the Group adopted the action agenda of "consolidating foundations to enhance efficiency, securing financing to maintain credit facilities and building momentum for M&A to expand assets" in 2025, gradually narrowed the scope of M&A targets within the industry and target project, maintained prudent operations, kept main business income stable, enhanced asset quality and delivered a notable rise in operating profit.
As of 31 December 2025, the Company recorded an operating income of RMB417 million, remaining stable compared to 2024; operating profit reached RMB118 million, representing a year-on-year increase of approximately 18%; net profit attributable to shareholders of the parent amounted to approximately RMB73.29 million, representing a year-on-year increase of 65%, indicating a significant improvement in profitability. By segment, the fixed income investment segment achieved income of RMB230 million, representing a year-on-year increase of approximately 25%; the office and commercial property assets located in Wuhan Optical Valley collectively achieved income of RMB100 million, and the income from engineering construction agency for existing projects was over RMB57 million.
While maintaining stable income, the Group further strengthened the management and operation of its held assets in 2025, enhancing asset quality and the efficiency of their contribution to earnings. The occupancy rate of Wuhan Optical Valley property assets rebounded to 75% by year-end, representing a favorable level within the local region. The Group’s associates and joint ventures also overcame numerous challenges in business development and the operating environment in 2025, achieving stable operations while effectively reducing risks and mitigating their impact on the Group’s financial statements.
To continue rewarding our shareholders, the Group proposed to distribute a final dividend of HK$0.0025 per share for 2025, and together with the interim dividend already distributed, the total proposed dividend distribution for 2025 amounted to approximately RMB35 million, representing 46% of the net profit for 2025. Since the resumption of dividend distribution in the interim period of 2023, the Group has distributed and proposed to distribute dividends of approximately RMB120 million, demonstrating its commitment and willingness to reward shareholders over the long term.
FIXED-INCOME SEGMENT SERVES AS CORNERSTONE, UNLEASHING NEW MOMENTUM, WHILE PROPERTY ASSETS MAINTAIN STEADY AND ROBUST OPERATIONS
Income from the fixed-income investments segment has consistently served as a key source of stable income and cash flow for the Group, acting as a profit cornerstone. In 2025, facing the dual challenges of a downward trend in domestic interest rates and a corresponding fall in investment yields, the fixed-income investment adhered to the principle of balancing the "security, liquidity, and profitability of funds". The Group formulated a systematic investment operational strategy, made proactive allocations at the turn of the year, and raised the efficiency of rolling capital investments. In 2025, cumulative fixed-income investments reached approximately RMB2.8 billion, marking the largest investment scale in the past five years. As of the end of February 2026, the balance of the Group’s fixed-income investment portfolio exceeded RMB4 billion, with an average portfolio yield of over 7%, maintaining relative stability in the current environment of generally declining market investment yields.
Amid fierce competition in the commercial and office property market and a challenging environment of sustained pressure on the rental market within the Wuhan property project region, the business team has turned pressure into motivation, launching a concerted effort to secure tenants, and adopting diversified approaches to expand client resources and promote office buildings and business districts. By year-end, the office building’s occupancy rate rebounded to 75%, significantly outperforming the industry average. It contributed approximately RMB100 million in annual revenue and over RMB32 million in net profit, safeguarding the fundamental stability of our prudent operational model.
REFINING THE DIRECTION OF STRATEGIC TRANSFORMATION
The year 2025 marks both the conclusion of the "14th Five-Year Plan" and the planning phase for the "15th Five-Year Plan". For China New Town, it is also a pivotal year for strategizing business transformation. The Group currently has a solid base of fixed-income investments and property leasing operations, which have consistently delivered stable income and cash flow in the past. However, under the current domestic environment of declining investment returns and pressure on the property market, business growth is relatively limited. Therefore, the Group needs to cultivate new development momentum and revenue growth curves, achieve the integration of industrial resources and leapfrog development in financial indicators, thereby facilitating a reassessment of the Group’s value by the capital markets.
Since 2022, leveraging the development trends in China’s new economy sectors and the resource and network advantages of its shareholders, the Group has begun exploring investment and business transformation opportunities in strategic emerging industries such as new energy and new materials, environmental protection, semiconductors, and high-end manufacturing, and has also completed several minority equity investments, accumulating sector-specific knowledge and experience. In 2025, the Group further accelerated the pipeline development and project initiation of its transformation initiatives. Key projects have entered corresponding stages of commercial negotiation and due diligence. Concurrently, by further leveraging the industrial cluster resources and footprint in the Wuxi region, as well as the industrial investment expertise of CDBC, the Group continuously identified and expanded potential project opportunities. We believe that the project accumulation and experience gained in 2025 will enable China New Town to successfully launch the "second growth curve" for its corporate development in the first half of the "15th Five-Year Plan".
STRENGTHENING THE MANAGEMENT OF ASSOCIATES AND JOINT VENTURES, PROMOTING ASSET REVITALIZATION, TO EFFECTIVELY CONTROL INVESTMENT RISKS
In 2025, the Group actively advanced the revitalization of existing assets and strengthened the management and control of its associates and joint ventures to enhance operational asset quality. The loan for the joint venture, Nanjing Guoying Company, was successfully extended, alleviating short-term debt pressure. The international school (a lessee of school premises under the Group’s portfolio) overcame enrollment challenges, continuously enhancing its influence and educational progress, with operations advancing steadily. Student enrollment in 2025 increased by approximately 28% compared to the same period of the previous year, thereby securing the rental income source for Nanjing Guoying Company. A new plan for the Beijing Junzhuang project was approved, and in line with the new plan, the Group renegotiated a lease proposal for the construction land collectively owned with the village collective to lower current operational costs and enhance the effectiveness of subsequent project development.
SUCCESSFULLY COMPLETING OFFSHORE BOND FINANCING TO SECURE SUFFICIENT FUNDS FOR SUBSEQUENT BUSINESS DEVELOPMENT
In November 2025, the Company successfully completed the issuance of RMB1.5 billion in offshore RMB-denominated bonds with a term of three years and a coupon rate of 2.95%. The issuance was supported by a keepwell and liquidity support as well as an equity purchase commitment from Wuxi Communications. The proceeds from this bond issuance were used to repay the offshore RMB-denominated bonds maturing in 2026, achieving a seamless rollover of the bond financing, optimizing the debt maturity profile, and providing sustained financial support for subsequent business development. Concurrently, the interest cost decreased significantly compared to 2023, substantially reducing the Group’s financial cost burden.
OUTLOOK FOR 2026
The "15th Five-Year" Plan period represents a crucial stage for the PRC in its efforts to build a modern socialist country in all respects. It is also a period of strategic opportunity featuring profound economic structural adjustment and accelerated reshaping of the industrial landscape. More importantly, it marks an initial breakthrough phase for the Company to consolidate its development foundation and achieve a strategic leap forward. Standing at a new historical starting point, the Company will closely follow the central economic policies and guidelines, anchor high-quality development as its top priority, and build on the accumulated experience of its existing business. Leveraging the resource strengths of its shareholders and supported by the professional capabilities of its management team, the Company will clarify its development positioning and calibrate its strategic direction. It will successfully complete the strategic transition from a "financial investor" to an "industrial value creator", laying a solid foundation for the Company’s long-term and sustainable development.
DEVELOPING A TOP-TIER STRATEGIC PLAN — DEFINING CORE GOALS AND A CLEAR BLUEPRINT
As the inaugural year of the "15th Five-Year" Plan, 2026 also represents a critical initial phase for the Company’s strategic transformation. Our foremost task is to clarify the fundamental proposition of "who we are and where we are heading". Based on our actual development conditions and in line with industry trends, we will position ourselves as a holder and operator of stable assets across various sectors. This positioning is rooted in the Company’s mature business experience accumulated in fixed income investment, property management and other fields. It draws on the core strengths of our shareholders in resource integration and industrial layout, and relies on the management team’s professional expertise in investment, risk control and asset operation. This represents a systematic integration of the Company’s competitive advantages and, more importantly, a firm grasp of its future development direction.
In terms of asset allocation strategy, the Group will establish an asset portfolio structure comprising "stable+ high growth" assets, achieving a scientific mix and coordinated development of different asset types. For stable assets, on the basis of further refining the operation of fixed income projects and professionalising property management, we will explore expanding the range of stable assets held, further strengthening the Company’s revenue and consolidating its cash flow base. For high growth assets, we will focus on high quality sectors with strong development potential and alignment with industrial trends. Through strategic positioning, resource input and professional operation, we will foster new business growth drivers and build differentiated competitive advantages. The synergy between the two types of assets will not only ensure the stability of the Group’s current operations but also reserve momentum for long-term development, thereby achieving a development framework where "current returns are secured and future growth is supported".
ENSURING THE STABILITY OF THE FOUNDATIONAL BUSINESS TO CONSOLIDATE THE GROUNDWORK FOR A STEADY START TO THE “15TH FIVE-YEAR” PERIOD
At this critical stage of vigorously planning the strategic business transformation and fostering new drivers for future development, we will continue to uphold the bottom line of stable operation for our core businesses. This will consolidate a solid foundation for sound financial performance during the transition period and provide sustained and reliable financial and operational support for the orderly progress of strategic transformation. In the fixed income investment segment, we will always adhere to the three fundamental principles of "security, liquidity and profitability". Risk prevention and control will be embedded throughout the entire investment process, with strict compliance with regulatory requirements and risk boundaries, resolutely ensuring the safety of investment assets and stable returns. At the same time, we will continue to intensify the sourcing and pipeline development of high quality projects, adhering to an investment strategy of selecting only the best assets and prioritising quality over quantity. We will conduct scientific analysis of market trends, precisely control the pace of investment, implement full cycle investment planning and fund coordination, and steadily enhance the quality and efficiency of the fixed income business. In the Wuhan property operation segment, we will further pursue a market-oriented and refined operational approach, maintaining and optimising flexible and adaptive leasing strategies. We will adopt a combination of measures to revitalise asset operation, steadily improve property occupancy rates and revenue per available square meter, and continuously enhance the stability and risk resilience of asset income. We will give full play to the role of high quality property assets as a cornerstone of cash flow stability.
ACHIEVING A BREAKTHROUGH IN BUSINESS TRANSFORMATION
Building on the achievements accumulated from previous minority equity investments, commercial negotiations and related work, we will focus on our core development directions in 2026. We will systematically review and refine the core characteristics of assets across various industries, and precisely target high quality asset sectors that are highly aligned with the Group’s strategic positioning. For potential projects already in the negotiation stage, we will strengthen overall coordination, clarify responsibilities, accelerate the pace of discussions and refine transaction structures. We will make every effort to resolve difficulties and bottlenecks encountered during negotiations, promote the realisation of high quality project transactions, and achieve substantive breakthroughs in building the target "stable + high growth" asset allocation portfolio.
CONTINUING TO DRIVE DOMESTIC AND OVERSEAS FINANCING — PROVIDING CAPITAL SUPPORT FOR BUSINESS DEVELOPMENT
In 2026, building on the progress made in financing during 2025, the Company will align its financing arrangements with the pace of business development and the needs of strategic transformation, and conduct overall planning for diversified domestic and overseas financing solutions. Through the flexible use of multiple financing instruments such as credit facilities and bonds, we will optimise and coordinate the maturity structure, interest rate levels and funding application of our financing. We will continue to improve a marketoriented, diversified and sustainable financing system, and strive to build long term financing capacity that matches the Company’s business development and supports its strategic transformation. This will provide stable, sufficient and low cost funding support for the implementation of various operational initiatives and the delivery of core strategies.
Embracing the momentum of progress while acknowledging the magnitude of our responsibilities, we maintain our forward trajectory with determined resolve. Looking forward to 2026, the Company is in a critical period of deepening its business transformation and reshaping its development momentum. This new journey is a grand expedition filled with glory and dreams, and only solid effort leads to lasting success. Bearing in mind with a sense of urgency that time and tide wait for no man, let us anchor our goals, overcoming difficulties and challenges to reward our shareholders, give back to society, and thank every colleague striving alongside us with even stronger performance.
Finally, on behalf of the Board, I express my sincere gratitude to all shareholders, investors and partners for your trust and support for the Company in the past year. I also express heartfelt respects to the directors, management team and all staff for their diligent efforts.