China New Town Development Co. Ltd. (1278) AI Stock Analysis

• Market Cap: HK$807.28M
• Dividend Yield: 6.71%
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 18.0
• Beta (1Y): 0.86
• Revenue Growth: 2.19%
• EPS Growth: -70.51%
• Country: HK
• Employees: 92
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Development
• EPS (TTM): <0.01
• Shares Outstanding: 9,726,247,000
• 10 Day Avg. Volume: 677,187
• 30 Day Avg. Volume: 1,031,230
• PEG Ratio: -0.19
• Price to Book (P/B): 0.13
• Price to Sales (P/S): 3.68
• P/FCF Ratio: 19.27
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: HK$0.09 ▲(15.00% Upside)

The score is primarily held back by weak cash flow (negative operating and free cash flow) and low profitability quality (net margin decline and very low ROE), despite strong top-line growth and high gross margins. Technicals are mixed with a negative MACD and price below longer-term averages. Valuation is supported by a high dividend yield, but the P/E is only moderate.

Positive Factors

Strong Revenue Growth

Sustained 129.9% TTM revenue growth reflects expanding project deliveries and market share in urban development. Over months this growth can underwrite scale benefits, support reuse of fixed costs, and validate demand for its residential/commercial projects amid China urbanization trends.

Very High Gross Margin

An 83.67% gross margin indicates strong pricing power or efficient project cost control in development activities. Persistently high gross margins provide a buffer to absorb SG&A and financing expenses, improving the odds of durable operating profitability as revenues normalize.

Moderate Leverage / Stable Capital Structure

A 0.54 debt/equity ratio signals a balanced use of leverage, limiting refinancing and solvency risk across cycles. This capital structure supports the company’s ability to fund multi-year projects and partner with public entities, preserving strategic optionality over several months.

Negative Factors

Negative Operating and Free Cash Flow

Persistent negative operating and free cash flow signals weak cash conversion from sales and project completions. For a developer, this constrains land buys, project starts and rehypothecation capacity, raising reliance on external funding and increasing structural liquidity risk over months.

Net Margin Compression

A sharp decline in net margin suggests rising overhead, financing costs or one-off pressures that erode profit quality. Margin compression reduces resilience to revenue swings, weakens capacity to self-fund growth and makes earnings more sensitive to cost or market changes over the medium term.

Significant EPS Decline

A roughly 70% drop in EPS points to material deterioration in per-share profitability despite revenue gains. If sustained, this undermines reinvestment capacity and shareholder returns, signaling operational or financial pressures that could persist across the next several quarters.

China New Town Development Co. Ltd. Business Overview & Revenue Model

Company Description

China New Town Development Company Limited engages in planning and developing new towns in the People's Republic of China. It operates through four segments: Land Development, Urbanization Development, Property Leasing, and Others. The company provides land infrastructure development services; constructs ancillary public facilities; and invests in new town projects. It also offers property leasing and management, real estate and enterprise investment consultation, asset and fund management, investment and asset development, and investment management services. The company was founded in 2002 and is based in Kowloon, Hong Kong.

How the Company Makes Money

China New Town Development Co. Ltd. generates revenue primarily through the sale and leasing of properties developed under its projects. The company profits from the sale of residential units and commercial spaces, often engaging in pre-sales to secure funding prior to construction completion. Additional revenue streams include providing property management services and collaborating with local governments on public infrastructure projects, which can lead to government contracts and financial incentives. Strategic partnerships with other developers and investment firms also enhance its capacity for large-scale projects, contributing significantly to its earnings.

China New Town Development Co. Ltd. Financial Statement Overview

Summary

Strong revenue growth and gross profit margins are offset by challenges in net profitability and cash flow management. The balance sheet is stable with moderate leverage, but low return on equity highlights profitability concerns.

Income Statement

The company shows a strong gross profit margin of 83.67% in TTM, indicating efficient cost management. However, the net profit margin has decreased to 11.94% from 28.82% in the previous year, suggesting challenges in maintaining profitability. Revenue growth is positive at 129.9% in TTM, showing a significant recovery from the previous year's decline.

Balance Sheet

The debt-to-equity ratio is moderate at 0.54, indicating a balanced approach to leveraging. Return on equity is low at 0.98% in TTM, reflecting limited profitability relative to shareholder equity. The equity ratio is stable, suggesting a solid capital structure.

Cash Flow

The company faces challenges with negative operating and free cash flows in TTM, indicating cash management issues. The free cash flow to net income ratio is slightly above 1, suggesting some alignment between cash flow and profitability, but overall cash flow performance is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	346.25M	153.77M	162.68M	161.91M	273.04M	391.64M
Gross Profit	289.72M	97.52M	124.23M	118.64M	209.64M	350.77M
EBITDA	168.06M	176.00M	306.59M	115.43M	207.34M	-79.15M
Net Income	41.35M	44.32M	140.86M	2.72M	108.58M	-250.93M
Balance Sheet
Total Assets	7.83B	7.90B	7.88B	6.58B	6.68B	7.41B
Cash, Cash Equivalents and Short-Term Investments	4.27B	2.98B	3.32B	2.35B	1.77B	2.85B
Total Debt	2.28B	2.30B	2.32B	1.12B	1.13B	1.87B
Total Liabilities	3.12B	3.20B	3.21B	2.05B	2.16B	3.02B
Stockholders Equity	4.22B	4.21B	4.19B	4.07B	4.05B	3.94B
Cash Flow
Free Cash Flow	-28.14M	29.40M	-25.75M	-116.38M	416.31M	-71.94M
Operating Cash Flow	-27.04M	29.88M	-20.04M	-33.91M	422.71M	-13.00M
Investing Cash Flow	-325.61M	-296.75M	-71.58M	226.92M	-106.16M	1.67B
Financing Cash Flow	-174.49M	-142.87M	1.04B	-75.62M	-785.71M	-1.04B

China New Town Development Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1278, the sentiment is Negative. The current price of 0.08 is below the 20-day moving average (MA) of 0.08, below the 50-day MA of 0.08, and below the 200-day MA of 0.09, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 46.00 is Neutral, neither overbought nor oversold. The STOCH value of 44.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1278.

China New Town Development Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
1321	61 Neutral	HK$1.09B	12.02	1.84%	―	-54.44%	120.18%
0131	58 Neutral	HK$770.16M	-0.81	-16.32%	3.70%	-11.00%	-676.27%
1278	56 Neutral	HK$807.28M	18.04	0.97%	6.71%	2.19%	-70.51%
0160	51 Neutral	HK$684.41M	-0.79	-7.88%	3.09%	46.99%	-598.31%
0230	46 Neutral	HK$3.25B	-1.06	-114.48%	―	-26.58%	-40.96%
1668	41 Neutral	HK$1.22B	-0.14	―	―	―	―

China New Town Development Co. Ltd. Corporate Events

China New Town Development Reports RMB 3.37 Billion Urbanization Fixed-Income Portfolio With 7.1% Yield

China New Town Development Company Limited reported that as of 31 December 2025 its urbanization fixed-income investment portfolio, net of impairment on risky projects, stood at RMB 3.366 billion, generating contractually guaranteed pre-tax annual returns of about RMB 238 million, equivalent to an average annualized pre-tax yield of roughly 7.1%. During the fourth quarter the group rotated assets by adding new fixed-income projects in Taizhou Xinghua Leisure Food Industrial Park, Wuxi Huishan state-owned holdings and Yangzhou Guangling Food Industrial Park, while exiting several urban regeneration and technology park projects in Taizhou and Yangzhou, recovering RMB 820 million in principal along with all related guaranteed gains, and it plans to continue providing quarterly updates on its urbanization fixed-income business, underscoring a focus on managing risk and sustaining yield in its investment portfolio.

The most recent analyst rating on (HK:1278) stock is a Hold with a HK$0.09 price target. To see the full list of analyst forecasts on China New Town Development Co. Ltd. stock, see the HK:1278 Stock Forecast page.

China New Town Development Co. Ltd. Announces Board Composition

China New Town Development Co. Ltd. has announced the composition of its board of directors, detailing the roles and functions of each member. This announcement highlights the company’s commitment to strong governance and strategic oversight, which is crucial for its continued growth and positioning in the competitive real estate sector.

The most recent analyst rating on (HK:1278) stock is a Hold with a HK$0.09 price target. To see the full list of analyst forecasts on China New Town Development Co. Ltd. stock, see the HK:1278 Stock Forecast page.

China New Town Development Co. Ltd. Forms ESG Committee to Strengthen Sustainability Efforts

China New Town Development Co. Ltd. has announced the establishment of an ESG Committee to enhance its management of environmental, social, and governance aspects. This move is aimed at supporting the company’s long-term development by overseeing the implementation of ESG and climate-related goals, strategies, and policies, as well as identifying and responding to climate-related risks and opportunities. The committee is authorized to review, assess, and evaluate all ESG matters, providing recommendations and ensuring effective operation with the help of a working group.

The most recent analyst rating on (HK:1278) stock is a Hold with a HK$0.09 price target. To see the full list of analyst forecasts on China New Town Development Co. Ltd. stock, see the HK:1278 Stock Forecast page.

China New Town Development Co. Ltd. Forms ESG Committee to Enhance Sustainability Efforts

China New Town Development Co. Ltd. has announced the establishment of an Environmental, Social, and Governance (ESG) Committee as of December 12, 2025. This committee, composed of three independent non-executive directors, aims to enhance the company’s ESG management and oversee the implementation of its strategies and policies related to environmental and social governance. The move is expected to strengthen the company’s commitment to sustainable development and improve its industry positioning by aligning with global ESG standards.

The most recent analyst rating on (HK:1278) stock is a Hold with a HK$0.09 price target. To see the full list of analyst forecasts on China New Town Development Co. Ltd. stock, see the HK:1278 Stock Forecast page.

China New Town Development Announces CNY1.5 Billion Bond Issuance

China New Town Development Company Limited has announced a voluntary issuance of CNY1.5 billion in bonds, due in 2028, with a 2.95% interest rate. The issuance involves a subscription agreement with Wuxi Communications Industry Group and several independent managers, aiming to attract professional investors and strengthen the company’s financial position.

China New Town Development Delays Circular Dispatch, Granted Waiver

China New Town Development Company Limited has announced a delay in the dispatch of a circular related to financial assistance for a joint venture. The company received a waiver from the Hong Kong Stock Exchange to extend the deadline for dispatching the circular until December 3, 2025, due to the need for additional time to finalize necessary information.

China New Town Development Extends Major Financial Assistance Agreement

China New Town Development Co. Ltd. has announced a major transaction involving the extension of a financial assistance agreement for a joint venture. The company, through its subsidiary Xincheng Kaiyuan, alongside JPC, has agreed to extend the repayment schedule of a bank loan from 2031 to 2033, with both parties continuing to guarantee the loan. This extension involves an outstanding principal amount of approximately RMB423 million. The transaction is classified as a major transaction under Hong Kong’s Listing Rules, requiring shareholder approval, which has been obtained from major shareholders, negating the need for an extraordinary general meeting.