NAM TAI PROPERTY INC. Reports Q2 2020 Results
Nam Tai Property Inc. (NTP) reported its Q2 2020 results, showing an 11.4% revenue increase year-over-year, totaling $843,000, attributed to rental income. However, gross profit plummeted 63% to $160,000, leading to a net loss from operations of $4.5 million, worsening from $3.4 million in Q2 2019. Cash and cash equivalents fell significantly to $68.1 million, down from $132.4 million at year-end 2019. As of June 30, 2020, occupancy rates for Shenzhen projects stood at 32%. The company resumed construction amidst COVID-19 and launched rent financing to bolster tenant occupancy.
- Revenue increased by 11.4% year-over-year to $843,000.
- Occupancy rate of Wuxi and Shanghai projects is approximately 96%.
- Rent financing introduced to ease tenant financial pressures.
- Construction activities resumed fully after COVID-19 disruptions.
- Gross profit declined by 63% to $160,000.
- Net loss from operations increased to $4.5 million, up from $3.4 million in Q2 2019.
- Cash and cash equivalents decreased to $68.1 million from $132.4 million at the end of 2019.
- Shenzhen projects have a low occupancy rate of 32%.
SHENZHEN, China, July 24, 2020 /PRNewswire/ -- Nam Tai Property Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTP) today announced its unaudited results for the second quarter ended June 30, 2020.
KEY HIGHLIGHTS
(In thousands of US dollars, except per share data, percentages and as otherwise stated)
Quarterly Results | Six Months Results | |||||||||||||||||||||||
Q2 2020 | Q2 2019 | YoY(%)(a) | 6M 2020 | 6M 2019 | YoY(%)(a) | |||||||||||||||||||
Revenue | $ | 843 | $ | 757 | $ | 1,542 | $ | 1,338 | ||||||||||||||||
Gross profit | $ | 160 | $ | 433 | (63.0)% | $ | 242 | $ | 778 | (68.9)% | ||||||||||||||
Net loss from operations | $ | (4,489) | $ | (3,360) | — | $ | (8,211) | $ | (6,624) | — | ||||||||||||||
% of revenue | (532.5) | % | (443.9) | % | (532.5) | % | (495.0) | % | ||||||||||||||||
per share (diluted) | $ | (0.11) | $ | (0.09) | — | $ | (0.21) | $ | (0.17) | — | ||||||||||||||
Consolidated net loss | $ | (3,784) | $ | (3,352) | — | $ | (6,960) | $ | (5,143) | — | ||||||||||||||
% of revenue | (448.9) | % | (442.8) | % | (451.4) | % | (384.0) | % | ||||||||||||||||
Basic loss per share | $ | (0.10) | $ | (0.09) | — | $ | (0.18) | $ | (0.13) | — | ||||||||||||||
Diluted loss per share | $ | (0.10) | $ | (0.09) | — | $ | (0.18) | $ | (0.13) | — | ||||||||||||||
Weighted average number of shares ('000) | ||||||||||||||||||||||||
Basic | 39,144 | 38,199 | 38,888 | 38,196 | ||||||||||||||||||||
Diluted | 39,144 | 38,199 | 38,888 | 38,196 | ||||||||||||||||||||
Notes: | ||||||||||||||||||||||||
(a) Percentage change is not applicable if either of the two periods contains a loss or no amount. |
Financial Position | ||||||||||||
As of June 30, | As of December 31, | As of June 30, | ||||||||||
2020 | 2019 | 2019 | ||||||||||
Cash and cash equivalents(a) | $ | 68,091 | $ | 130,218 | $ | 96,259 | ||||||
Restricted cash | $ | 1,134 | $ | — | $ | — | ||||||
Short-term investments(b) | $ | — | $ | 2,166 | $ | 1,723 | ||||||
Prepaid expenses and other receivables | $ | 8,092 | $ | 9,338 | $ | 7,305 | ||||||
Real estate properties under development, net | $ | 370,674 | $ | 251,685 | $ | 199,761 | ||||||
Property, plant and equipment, net | $ | 25,026 | $ | 25,950 | $ | 27,245 | ||||||
Right of use assets | $ | 9,501 | $ | 4,078 | $ | — | ||||||
Deferred income tax assets | $ | 2,526 | $ | 2,011 | $ | — | ||||||
Total assets | $ | 490,140 | $ | 430,410 | $ | 335,207 | ||||||
Accounts payable | $ | 40,111 | $ | 36,676 | $ | 87,771 | ||||||
Advance from customers | $ | 95,884 | $ | 67,642 | $ | 21,354 | ||||||
Lease liabilities | $ | 9,592 | $ | 4,171 | $ | — | ||||||
Long-term bank loans | $ | 124,845 | $ | 95,942 | $ | — | ||||||
Total shareholders' equity | $ | 208,435 | $ | 214,738 | $ | 223,197 | ||||||
Total number of common shares issued | 38,935 | 38,632 | 38,213 | |||||||||
Notes: | ||||||||||||
(a) Cash and cash equivalents include all cash balances and certificates of deposit having a maturity date of three months or less upon acquisition. | ||||||||||||
(b) Short-term investments include all highly liquid investments with original maturities of greater than three months and less than 12 months and investments that are expected to be realized in cash during the next 12 months. |
SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE SECOND QUARTER OF 2020
Key Highlights of Financial Position
As of June 30, | As of December 31, | As of June 30, | |||||||
2020 | 2019 | 2019 | |||||||
Ratio of cash(a) to current liabilities | 0.46 | 1.16 | 0.88 | ||||||
Current ratio(b) | 1.23 | 1.25 | 0.95 | ||||||
Debt ratio(c) | 57.5 | % | 50.1 | % | 33.4 | % | |||
Return on equity | (6.6) | % | (3.0) | % | (4.6) | % | |||
Ratio of total liabilities to total equity | 1.35 | 1.00 | 0.5 | ||||||
Notes: | |||||||||
(a) Cash in this financial ratio includes cash, cash equivalents and short-term investments. | |||||||||
(b) Current ratio means all current assets, including prepaid expenses and other receivables, divided by all current liabilities. | |||||||||
(c) Debt ratio is calculated with total liabilities divided by total assets. |
FINANCIAL RESULTS
Revenue
Revenue for the second quarter of 2020 was
Revenue for the six months of 2020 was
Gross Profit
Gross profit for the second quarter of 2020 was
Gross profit for the six months of 2020 was
Net Loss from Operations
Net loss from operations for the second quarter of 2020 was
Net loss from operations for the six months of 2020 was
Consolidated Net Loss
Consolidated net loss for the second quarter of 2020 was
Consolidated net loss for the six months of 2020 was
Cash, Cash Equivalents and Short-term Investments
Cash, cash equivalents and short-term investments decreased by
Restricted Cash
Restricted cash increased by
Prepaid Expenses and Other Receivables
Prepaid expenses and other receivables decreased by
Real Estate Properties under Development, Net
Real estate properties under development increased by
Right of Use Assets
Right of use assets increased by
Deferred Income Tax Assets
Deferred income tax assets increased by
Accounts Payable
Accounts payable increased by
Advance from Customers
Advance from customers increased by
Lease Liabilities
Lease liabilities increased by
Long-term Bank Loans
Long-term bank loans increased by
Liquidity and Capital Resources
As of June 30, 2020, the Company had total cash, cash equivalents and short-term investments of
As of June 30, 2020, of approximately
According to our project investment plan, the capital expenditure for the third quarter of 2020 is estimated to be
Please refer to the Company's Condensed Consolidated Statements of Comprehensive Income for further details. The information contained herein has also been published on the Company's website at https://www.namtai.com/quarterly/index.html.
BUSINESS OVERVIEW
Impact of COVID-19
In the first half of 2020, the outbreak of COVID-19 pandemic has impacted the commercial activities throughout China as well as other parts of the world. Local authorities in Chinese cities adopted varying measures to slow down the resumption of work in enterprises for public health concerns. The leasing and construction activities of our projects in Shenzhen and Shanghai have also been affected to a certain extent in the first half of 2020.
Fortunately, the COVID-19 pandemic seemed to have come under control in most parts of China over the past few months. The pandemic has created no significant impact on our liquidity and financial condition in the second quarter of 2020. As of June 30, 2020, there were 421 existing confirmed cases of COVID-19 in China according to China's National Health Commission, a significant drop from 2,004 existing confirmed cases as of March 31, 2020. In the second quarter, the construction works of our projects under development have fully resumed. We will continue to take stringent safety measures and monitor the development of the COVID-19 pandemic to safeguard the health of our staff and tenants.
Progress of Leasing and Business Invitation
As of June 30, 2020, we had leasable area of approximately 365,000 square meters, of which around
Projects | Leasable Area as of June 30, 2020 | Occupancy Rate | ||
Shenzhen | 310,193 | |||
Nam Tai Inno Park | 264,337 | |||
Nam Tai Inno Valley | 38,270 | |||
Nam Tai - Tang Xi Technology Park | 7,586 | |||
Wuxi & Shanghai | 54,809 | |||
Wuxi facilities | 50,828 | |||
Nam Tai - U-Creative Space (Lujiazui) | 3,981 | |||
Total | 365,002 |
In June 2020, we hosted signing ceremonies with two technology companies in Nam Tai Inno Park — Wayz Robotics (Shenzhen) Co., Ltd. and Shenzhen Ksodr Healthy Products Tech. Co., Ltd. Both companies are expected to move into Nam Tai Inno Park in the second half of 2020. To enhance convenience and service offerings, we entered into leasing contracts with multiple service providers for Nam Tai Inno Park, from food & beverage operators to retailers and a fitness center. We believe Nam Tai Inno Park is gaining popularity among the technology enterprises in Shenzhen as our operational capabilities are being recognized.
In addition, we introduced rent financing to our tenants. We began to explore financial support to promote the construction-stage pre-leasing of units in Nam Tai Inno Park in 2019. In June 2020, Zastron Electronic (Shenzhen) Co., Ltd. ("Zastron Shenzhen") and Nam Tai Investment (Shenzhen) Co., Ltd. ("Nam Tai Investment"), subsidiaries of the Company, and a domestic bank entered into a leasing cooperation agreement, pursuant to which, the bank agreed to provide personal loans to tenants of Nam Tai Inno Park with a loan term up to 10 years. Tenants opt for the rent financing are required to pay no less than
Project Construction and Operation Progress
- For Nam Tai Inno Park, we obtained property ownership certificates for 11 buildings within the park in May 2020. As of June 30, 2020, we completed the renovation work for the operation service center of Nam Tai Inno Park, which will help us provide professional services to enterprise tenants. We are currently carrying out renovation works for the common area of the industrial office. It is estimated that the leased units will be delivered to our tenants gradually from the third quarter of 2020 to 2021.
- For Nam Tai Technology Center, the construction work of the project fully resumed. As of June 30, 2020, we were completing the baseplate construction and will continue to monitor pile foundation and conduct other foundation works. We may consider applying for the pre-sale permit in the fourth quarter of 2020 or during the first half of 2021 when we meet the pre-sale conditions.
- For Nam Tai Inno Valley, we submitted the application of urban renewal for Nam Tai Inno Valley to the City Renewal and Land Development Bureau of Shenzhen Bao'an District. We applied for mixed land indicators, including traditional industrial land (M-1) as primary land use and innovative industrial land (M-0) as supplementary land use. We will provide further updates on the progress of the urban renewal application in due course.
- With the gradual alleviation of the COVID-19 pandemic in China, we had a number of industrial events in the second quarter to further strengthen our image as a technology park operator. We organized several conferences including Demystifying 5G: Harbin Institute of Technology & Investors Joint Conference, AI Opens a New Era of Smart Manufacturing – Smart Manufacturing & Robotic Industry Sharing Salon, Explore AI Unicorn - UBTECH and Smart Healthcare Empowers Health Industry Conference, etc.
Nam Tai - Longxi
In June 2020, we obtained the land use right certificate and land use planning permit for Nam Tai - Longxi. The construction teams for pile foundation and earthwork have entered the site and begun preparation works such as pile testing and earthwork excavation planning. The estimated development cost of Nam Tai - Longxi project is approximately
The main target customers of Nam Tai - Longxi are the locals with rigid demand and demand to improve living conditions in Machong Town, Dongguan, as well as external customers from other parts of Dongguan and the nearby Guangzhou city. The straight-line distances from the project to Huangpu District and Panyu District of Guangzhou are only 4 and 7 kilometers, respectively. In addition, it takes only about 40 minutes to travel from the Dongguan West Railway Station to the Guangzhou East Railway Station and the Shenzhen Airport. The transportation advantage would be a great attraction of the project.
Budget for Developing the Projects
The estimated development costs of Nam Tai Inno Park and Nam Tai Technology Center are
Macro Trend Update
The office market in Shenzhen has been under pressure in the past few years. According to CRIC Research, the transaction area in 2019 declined by approximately
In contrast, the performance of commercial housing market in Shenzhen has been positive in recent years. According to CRIC Research, the transaction area of the commercial housing in Shenzhen in 2019 was approximately 4.54 million square meters, an increase of
The commercial housing market in Machong Town, Dongguan has also performed well in recent years. According to CRIC Research, the average transaction price of the commercial housing in Machong Town in the first half of 2020 reached approximately RMB18,018 per square meter, an increase of
Policy Update
In June 2020, Guangdong Provincial Development and Reform Commission, Department of Science and Technology of Guangdong Province and other local departments have jointly issued the "Overall Development Plan of the Guangdong Development Zone (2020-2035)"(the "Plan"). The Plan defines the scopes of the Shenzhen metropolitan area and the Guangzhou metropolitan area, of which the Shenzhen metropolitan area includes Shenzhen, Dongguan, Huizhou and Shanwei. The Plan calls for the promotion of in-depth integration of the Shenzhen metropolitan area and other metropolitan areas, as well as the development of advanced manufacturing, emerging industries of strategic importance and complementary industries in development zones of the Pearl River Delta region, and the upgrading of traditionally competitive industries. The goal is, by 2022, the GDP of the province's development zones will exceed RMB 3 trillion; and by 2025 and 2035, the GDP of the province's development zones will exceed RMB 4 and 8 trillion, respectively.
According to the website of Shenzhen Metro, the Metro Line 6 ("Line 6") is expected to officially open for operation in August 2020. Line 6, also known as "Guangming Line", mainly passes through Bao'an and Guangming Districts of Shenzhen, and connects to Futian, Nanshan and other central areas in Shenzhen through Line 4 and other metro lines under construction. Nam Tai Inno Park is close to both Changzhen station and Fenghuangcheng station of Line 6 in Guangming District. With Line 6 coming into operation, the competitiveness and the economic development of Guangming District would be further enhanced. Nam Tai Inno Park would also benefit from the development.
RISKS RELATED TO OUR BUSINESS
Negative impacts have been brought to the Company due to recent press releases made by some investors. Their press releases and actions have disrupted our operations and the confidence of our business partners towards the Company. Our lending financial institutions may demand early repayments of our loans in the event of significant concerns over the stability of the Company. Our customers and business partners may be worried to withdraw from their respective leasing and engagements with the Company, while local authorities may further scrutinize on our development applications. Severe consequences to our financing and operations could be resulted from the actions of those investors, casting uncertainties over our asset value and financial performance.
In an open letter issued on May 27, 2020, an investor claimed that "two years ago, before any pre-sales or revenue, the Company's two commercial projects had three independent valuations ranging from
In addition, based on the PRC Interim Regulation on Land Appreciation Tax of 1994, as amended in 2011, and the corresponding implementation rules of 1995, as amended in 2011, Land Appreciation Tax ("LAT") applies on both corporate entities and individuals in the paid transfer of land use rights, real estate properties and affiliated facilities. The "deductible items" will be taken into account in the computation of the value of land appreciation. The Company may be subject to substantial LAT if Nam Tai Technology Center or our other saleable properties are disposed by sale. For further details, please refer to "Item 4-Information on the Company -B Business Overview -Major Taxes Applicable to Property Developers- Land Appreciation Tax" on our 2019 annual report contained in the Form 20-F.
INVESTOR COMMUNICATION
We have prepared a presentation for the results of the second quarter of 2020, which will be uploaded to the corporate website in the "Investor Relations – Information and Activities – Presentation" section. Investors may refer to the presentation for more on the Company's development.
We welcome our shareholders to communicate with us. If there is any information about the Company that may be of interest, please contact our investor relations department or our US investor relations advisor directly. The email address of our investor relations department is ir@namtai.com.cn. Our external investor relations consultant, Mr. Peter Poulos, could also be reached by phone and email on +1 646 586-5701 and namtai@hkstrategies.com, respectively.
OPERATING RESULTS
As of June 30, 2020 | ||
(in square meter) | ||
Project Completed | - | |
Project Under Development | 526,296 | |
Project For Future Development | 280,471 | |
Total | 806,767 |
Project Portfolio - As of June 30, 2020
Project | Nam Tai Inno Park | Nam Tai Technology Center | Nam Tai | Nam Tai • Longxi | ||||||||||||
City | Shenzhen | Shenzhen | Shenzhen | Dongguan | ||||||||||||
Type(a) | Office and Dormitory | Office and Dormitory | Office and Dormitory |
Residential and Commercial Property | ||||||||||||
Site Area (sq.m.) | 103,739 | 22,364 | 22,367 | 33,763 | ||||||||||||
Capacity GFA | 265,139 | 139,746 | N/A | 84,408 | ||||||||||||
Total GFA (sq.m.) | 331,701 | 194,595 | 170,200(b) | 110,271(c) | ||||||||||||
Total GFA | Completed | - | - | - | - | |||||||||||
Under Development (sq.m.) | 331,701 | 194,595 | - | - | ||||||||||||
Future Development (sq. m.) | - | - | 170,200(b) | 110,271(c) | ||||||||||||
Interest Attributable To Us | ||||||||||||||||
Address | Fenghuang Community, Guangming District, Shenzhen | Namtai Road, Baoan District, Shenzhen | Dongtai Village, Machong Town, Dongguan | |||||||||||||
Notes: | ||||||||||||||||
(a) The types of our projects are based on our planning or certificates issued by the relevant authority subject to adjustment upon the final approval of the relevant authority. | ||||||||||||||||
(b) The gross floor area is based on the assumption that we will receive M-0 zoning approval for the entire Inno Valley site prior to its redevelopment. If we do not receive the M-0 zoning approval, we will be required to develop Inno Valley under the M-1 zoning requirements. In that case, appropriate adjustments to our plan will have to be made. The existing gross floor area of Inno Valley is 41,927 square meters. According to "Shenzhen Industrial Block Range Line Management Measures", the location of Nam Tai Inno Valley is within the designated industrial block range, of which the government strictly controls the proportion of M-0 zoning on industrial land. Therefore, the proportion of M-0 zoning, floor area ratio and construction area of Inno Valley are subject to the final approval of the government which is uncertain at this time. We cannot guarantee that we will be able to develop Inno Valley according to the floor area currently disclosed. | ||||||||||||||||
(c) The figures are subject to adjustment upon the final approval of the relevant authority. |
Properties Under Development
The table below sets forth certain information of our property projects under development as of June 30, 2020, comprising properties under development with the land use right certificate and construction permits obtained but the construction work was still in progress.
Project | Nam Tai Inno Park | Nam Tai Technology Center | ||
City | Shenzhen | Shenzhen | ||
(Estimated) Total GFA (sq. m.) | 331,701 | 194,595 | ||
(Estimated) Leasable GFA (sq. m.) | 265,139 | - | ||
(Estimated) Saleable GFA (sq. m.) | - | 130,166 | ||
Commencement Time of Main Structure | June 2018 | July 2019 | ||
Status of Pre-sale Permit | Not eligible | To be obtained | ||
Estimated Completion Time | 2020 Q4 | 2022 Q1 | ||
Interest Attributable to Us |
Properties for Future Development
The table below sets forth certain information of our property projects held for future development as of June 30, 2020, comprising properties for which we have obtained the land use right certificate while the construction commencement permit of the main structure is not yet obtained.
Project | Nam Tai Inno Valley | Nam Tai - Longxi | ||
Location | Shenzhen | Dongguan | ||
Estimated Total GFA(1) (sq. m.) | 170,200 | 110,271 | ||
Estimated Completion Time | 2025 | 2022 | ||
Note: | ||||
(1) The figures are subject to adjustment upon the final approval of the relevant authority. |
Projects for Operation and Management
The table below sets forth certain information of our projects leased from third parties for operation and management as of June 30, 2020.
Project | Location |
Contracted Floor Area (sq. m.) | Operation Model | ||||
1 | Nam Tai - Tang Xi Technology Park | Shenzhen | 7,586 | Tenant Recruitment and Operation | |||
2 | Nam Tai - U-Creative Space (Lujiazui) | Shanghai | 3,981 | Tenant Recruitment and Operation |
The information contained in, or that can be accessed through, the website mentioned in this announcement does not form part of the announcement.
FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE
Certain statements included in this announcement, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "might", "can", "could", "will", "would", "anticipate", "believe", "continue", "estimate", "expect", "forecast", "intend", "plan", "seek", or "timetable". These forward-looking statements, which are subject to risks, uncertainties, and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business and the industry in which we operate. These statements are only predictions based on our current expectations about future events. There are several factors, many beyond our control, which could cause results to differ materially from our expectation. These risk factors are described in our Annual Report on Form 20-F and in our Current Reports filed on Form 6-K from time to time and are incorporated herein by reference. Any of these factors could, by itself, or together with one or more other factors, adversely affect our business, results of operations or financial condition. There may also be other factors currently unknown to us, or have not been described by us, that could cause our results to differ from our expectations. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements apply only as of the date of this announcement; as such, they should not be unduly relied upon as circumstances change. Except as required by law, we are not obligated, and we undertake no obligation, to release publicly any revisions to these forward-looking statements that might reflect events or circumstance occurring after the date of this announcement or those that might reflect the occurrence of unanticipated events.
SCHEDULE FOR RELEASE OF QUARTERLY FINANCIAL RESULTS FOR 2020
Announcements of Financial Results
Quarter | Date of release | |
Q1 2020 | April 27, 2020 (Monday) | |
Q2 2020 | July 24, 2020 (Friday) | |
Q3 2020 | November 2, 2020 (Monday) | |
Q4 2020 | February 1, 2021 (Monday) |
ABOUT NAM TAI PROPERTY INC.
We are a real estate developer and operator, mainly conducting business in Mainland China. Our main land resources are located in the Guangdong-Hong Kong-Macao Greater Bay Area ("Greater Bay Area") and Wuxi, China, of which the three plots of land in Shenzhen will be developed into the technology parks of Nam Tai Inno Park, Nam Tai Technology Center and Nam Tai Inno Valley. We plan to build these technology parks into landmark projects in the region, and provide high-quality industrial offices, industrial service spaces and supporting dormitories to the park tenants. Based on the experience of developing and operating technology parks, and the industrial relationship network accumulated over the past 40 years, we have also exported the operation mode of technology parks to other industrial properties using the asset-light model to rent industrial properties for repositioning and business invitation. We will also expand the commercial and residential property business in China as an auxiliary development strategy of the Company. As the growth prospects of China maintain, we will actively seize development opportunities in the Greater Bay Area and other first- and second-tier cities in China, and continue to strengthen and expand the business of industrial real estate, and commercial and residential properties.
Nam Tai Property Inc. is a corporation registered in the British Virgin Islands and listed on the New York Stock Exchange (Symbol: "NTP"). Please refer to the Nam Tai website (www.namtai.com) or the SEC website (www.sec.gov) for our press releases and financial results.
NAM TAI PROPERTY INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
FOR THE PERIODS ENDED JUNE 30, 2020 AND 2019 | ||||||||||||||||
(In Thousands of US dollars except share and per share data) | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Unaudited) | (Unaudited) | Unaudited | Unaudited | |||||||||||||
Revenue (1) | 843 | 757 | 1,542 | 1,338 | ||||||||||||
Cost of revenue | (683) | (324) | (1,300) | (560) | ||||||||||||
Gross profit | $ | 160 | $ | 433 | $ | 242 | $ | 778 | ||||||||
Expenses | ||||||||||||||||
General and administrative expenses | (2,545) | (2,818) | (5,548) | (5,766) | ||||||||||||
Selling and marketing expenses | (2,104) | (975) | (2,905) | (1,636) | ||||||||||||
$ | (4,649) | $ | (3,793) | $ | (8,453) | $ | (7,402) | |||||||||
Net loss from operations | $ | (4,489) | $ | (3,360) | $ | (8,211) | $ | (6,624) | ||||||||
Other expense, net (2) | (2) | (657) | (59) | (18) | ||||||||||||
Interest income | 368 | 665 | 779 | 1,499 | ||||||||||||
Loss before income tax | $ | (4,123) | $ | (3,352) | $ | (7,491) | $ | (5,143) | ||||||||
Deferred income tax credit | 339 | — | 531 | — | ||||||||||||
Consolidated net loss | $ | (3,784) | $ | (3,352) | $ | (6,960) | $ | (5,143) | ||||||||
Other comprehensive income (loss) (3) | 243 | (3,560) | (2,494) | 41 | ||||||||||||
Functional currency translation adjustment | 243 | (3,560) | (2,494) | 41 | ||||||||||||
Consolidated comprehensive loss | $ | (3,541) | $ | (6,912) | $ | (9,454) | $ | (5,102) | ||||||||
Loss Per Share | ||||||||||||||||
Basic | $ | (0.10) | $ | (0.09) | $ | (0.18) | $ | (0.13) | ||||||||
Diluted | $ | (0.10) | $ | (0.09) | $ | (0.18) | $ | (0.13) | ||||||||
Weighted average number of shares ('000) | ||||||||||||||||
Basic | 39,144 | 38,199 | 38,888 | 38,196 | ||||||||||||
Diluted | 39,144 | 38,199 | 38,888 | 38,196 | ||||||||||||
Notes: | ||||||||||||||||
(1) The property of Inno Valley at Gushu has been rented out since July 2019. The property at Wuxi has been rented to a third party lessee with a term of 12 years ending in October 2030. | ||||||||||||||||
(2) Other expense, net, includes an exchange loss of $0.02 million and $0.66 million for the three months ended June 30, 2020 and 2019 respectively. | ||||||||||||||||
(3) Other comprehensive loss was due to foreign exchange translation. |
NAM TAI PROPERTY INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
AS AT JUNE 30, 2020 AND JUNE 30, 2019 | ||||||||
(In Thousands of US dollars) | ||||||||
June 30, 2020 | December 31, 2019 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents(1) | 68,091 | 130,218 | ||||||
Restricted cash | 1,134 | — | ||||||
Short-term investments(1) | — | 2,166 | ||||||
Rental deposits | 4 | — | ||||||
Accounts receivable | 1,038 | 1,032 | ||||||
Real estate properties under development, net(2) | 102,961 | — | ||||||
Prepaid expenses and other receivables | 8,092 | 9,338 | ||||||
Total current assets | $ | 181,320 | $ | 142,754 | ||||
Rental deposits | 417 | 243 | ||||||
Real estate properties under development, net(2) | 267,713 | 251, 685 | ||||||
Property, plant and equipment, net | 25,026 | 25,950 | ||||||
Right of use assets | 9,501 | 4,078 | ||||||
Deferred income tax assets | 2,526 | 2,011 | ||||||
Prepaid expenses | 3,547 | 3,598 | ||||||
Other assets | 90 | 91 | ||||||
Total assets | $ | 490,140 | $ | 430,410 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term bank loan | 1,362 | 1,410 | ||||||
Current portion of long-term bank loans | 3,297 | 2,081 | ||||||
Accounts payable | 40,111 | 36,676 | ||||||
Rental deposits from customers | 440 | 343 | ||||||
Accrued expenses and other payables | 5,696 | 5,699 | ||||||
Advance from customers | 95,884 | 67,642 | ||||||
Current portion of lease liabilities | 646 | 529 | ||||||
Total current liabilities | $ | 147,436 | $ | 114,380 | ||||
Long-term bank loans | 121,548 | 93,861 | ||||||
Rental deposits from customers | 208 | 178 | ||||||
Financing lease payable | 20 | 13 | ||||||
Other payables | 3,547 | 3,598 | ||||||
Noncurrent portion of lease liabilities | 8,946 | 3,642 | ||||||
Total liabilities | $ | 281,705 | $ | 215,672 | ||||
EQUITY | ||||||||
Shareholders' equity: | ||||||||
Common shares | 389 | 386 | ||||||
Additional paid-in capital | 263,443 | 260,295 | ||||||
Accumulated losses | (33,480) | (26,520) | ||||||
Accumulated other comprehensive loss(3) | (21,917) | (19,423) | ||||||
Total shareholders' equity | $ | 208,435 | $ | 214,738 | ||||
Total liabilities and shareholders' equity | $ | 490,140 | $ | 430,410 | ||||
Notes: | ||||||||
(1) According to the definition of "Balance Sheet" under the Financial Accounting Standard Board ("FASB") Accounting Standards Codification ("ASC") 210-10-20, cash equivalents are short-term, highly liquid investments that are readily convertible to cash. Only investments with original maturities of three months or less when purchased would qualify under such definition. Therefore, the fixed deposits maturing over three months as of June 30, 2020, are not classified as cash and cash equivalents but separately disclosed as short-term bank deposits in the balance sheet. | ||||||||
(2) Capitalization on project investment was | ||||||||
(3) Accumulated other comprehensive loss represented conversion differences in foreign currency statements. |
NAM TAI PROPERTY INC. | ||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||
FOR THE PERIODS ENDED JUNE 30, 2020 AND 2019 | ||||||||||||||||||||
(In Thousands of US dollars) | ||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
(Unaudited) | (Unaudited) | Unaudited | Unaudited | |||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||
Consolidated net loss | $ | (3,784) | $ | (3,352) | $ | (6,960) | $ | (5,143) | ||||||||||||
Adjustments to reconcile consolidated net loss to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 383 | 356 | 777 | 786 | ||||||||||||||||
Amortization of right of use assets | 444 | — | 852 | — | ||||||||||||||||
Gain on disposal of property, plant and equipment | — | (15) | — | (15) | ||||||||||||||||
Unrealized gain of trading securities | (97) | — | — | — | ||||||||||||||||
Share-based compensation expenses | 363 | 119 | 1,102 | 248 | ||||||||||||||||
Unrealized exchange gain | 16 | 678 | (28) | 76 | ||||||||||||||||
Deferred income tax credit | (356) | — | (515) | — | ||||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||
Decrease (increase) in accounts receivable | 1 | (234) | (6) | (399) | ||||||||||||||||
Decrease (increase) in prepaid expenses and other receivables | 18,322 | 465 | 6,242 | (642) | ||||||||||||||||
Increase in deposit | (4) | — | (178) | — | ||||||||||||||||
Increase in property under development | (102,812) | — | (102,812) | — | ||||||||||||||||
Increase (decrease) in accrued expenses and other payables | 1,317 | (131) | (5,485) | (343) | ||||||||||||||||
Decrease in accounts payable | (586) | — | (586) | — | ||||||||||||||||
Decrease in lease liabilities | (197) | — | (851) | — | ||||||||||||||||
Increase in advance from customers | 24,664 | 20,639 | 28,242 | 21,099 | ||||||||||||||||
Increase in rental deposits from customers | 94 | — | 470 | 486 | ||||||||||||||||
Total adjustments | $ | (58,448) | $ | 21,877 | $ | (72,776) | $ | 21,296 | ||||||||||||
Net cash used in operating activities | $ | (62,232) | $ | 18,525 | $ | (79,736) | $ | 16,153 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||
Payment for real estate properties under development | (3,861) | (15,431) | (11,545) | (27,347) | ||||||||||||||||
Purchase of property, plant & equipment | (364) | (145) | (397) | (392) | ||||||||||||||||
Purchase of trading securities | 2,823 | — | — | — | ||||||||||||||||
Proceeds from disposal of property, plant and equipment | — | 68 | — | 68 | ||||||||||||||||
Redemption of marketable securities | — | — | — | 7,580 | ||||||||||||||||
Decrease in short-term investments | 4,090 | 10,550 | 2,166 | 37,649 | ||||||||||||||||
Net cash provided by (used in) investing activities | $ | 2,688 | $ | (4,958) | $ | (9,776) | $ | 17,558 | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||
Repayment for bank loan | (872) | — | (8,135) | — | ||||||||||||||||
Proceeds from bank loan | 3,388 | — | 38,274 | — | ||||||||||||||||
Proceeds from shares issued for option exercise | — | 126 | 2,049 | 160 | ||||||||||||||||
Net cash provided by financing activities | $ | 2,516 | $ | 126 | $ | 32,188 | $ | 160 | ||||||||||||
Net (decrease) increase in cash and, cash equivalents and restricted cash | $ | (57,028) | $ | 13,693 | $ | (57,324) | $ | 33,871 | ||||||||||||
Cash and, cash equivalents and restricted cash at beginning of period | 122,130 | 85,365 | 130,218 | 62,919 | ||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents | 4,123 | (2,799) | (3,669) | (531) | ||||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 69,225 | $ | 96,259 | $ | 69,225 | $ | 96,259 | ||||||||||||
SUPPLEMENTARY INFORMATION ON CASH FLOWS | ||||||||||||||||||||
Cash and cash equivalents | $ | 68,091 | $ | 96,259 | $ | 68,091 | $ | 96,259 | ||||||||||||
Restricted cash | $ | 1,134 | $ | — | $ | 1,134 | $ | — | ||||||||||||
NAM TAI PROPERTY INC. | ||||||||||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||||
FOR THE PERIODS ENDED June 30, 2020 AND 2019 | ||||||||||||||||
(In Thousands of US dollars) | ||||||||||||||||
1. These financial statements, including the consolidated balance sheet as of December 31, 2019, which was derived from audited financial statements, do not include all of the information and notes required by U.S. Generally Accepted Accounting Principles for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's annual report on Form 20-F for the fiscal year ended December 31, 2019. | ||||||||||||||||
2. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020. | ||||||||||||||||
3. Accumulated other comprehensive loss represents foreign currency translation adjustments. The consolidated comprehensive loss was | ||||||||||||||||
4. A summary of the operating income, other (expenses) income, net loss from operations and long-lived assets by geographical areas is as follows: | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
OPERATING INCOME WITHIN: | ||||||||||||||||
-PRC, excluding Hong Kong | $ | 843 | $ | 757 | $ | 1,542 | $ | 1,338 | ||||||||
OTHER (EXPENSES) INCOME, NET: | ||||||||||||||||
- Gain (loss) on exchange difference | $ | (16) | $ | (678) | $ | 28 | $ | (76) | ||||||||
- Others | 14 | 21 | (87) | 58 | ||||||||||||
Total other (expenses) income, net | $ | (2) | $ | (657) | $ | (59) | $ | (18) | ||||||||
NET LOSS FROM OPERATIONS WITHIN: | ||||||||||||||||
- PRC, excluding Hong Kong | $ | (2,578) | $ | (1,777) | $ | (4,273) | $ | (3,353) | ||||||||
- Hong Kong | (1,207) | (1,575) | (2,687) | (1,790) | ||||||||||||
Total net loss | $ | (3,785) | $ | (3,352) | $ | (6,960) | $ | (5,143) |
June 30, 2020 | December 31, 2019 | |||||||
LONG-LIVED ASSETS WITHIN: | ||||||||
- Real estate properties under development in PRC, excluding Hong Kong | $ | 370,674 | $ | 251,685 | ||||
- Property, plant and equipment in PRC, excluding Hong Kong | 24,771 | 25,624 | ||||||
- Hong Kong | 255 | 326 | ||||||
- Right of use assets in PRC, excluding Hong Kong | 9,165 | 3,597 | ||||||
- Hong Kong | 336 | 481 | ||||||
Total long-lived assets | $ | 405,201 | $ | 281,713 |
!["Cision"]("https://c212.net/c/img/favicon.png?sn=HK72679&sd=2020-07-24" "\"Cision\"")
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SOURCE Nam Tai Property Inc.
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