Public (SHA: 600007)

Company Facts

China World Trade Center, in Beijing is a multiplex of 38-floor office building, two 30-floor luxury apartment building, 5-star hotel (China Grand Hotel), 4-star hotel (World Trade Hotel), World Trade Exhibition Hall, World Trade Conference Hall and World Trade Department Store, etc.

The complex is in the heart of Beijing’s downtown financial district, which officially is referred to as CBD (Center Business District), contains 560,000 square meters of overall space.  Together with the ongoing 330 meters in height, 80-floor China World Trade Center III project, the complex will cover 1.1 million square meters of total space by year 2009 and thus, become the world largest trade center complex.

There are more than 120 ‘Fortune 500’ enterprises have their office in CBD of Beijing, while 57 of them are in China World Trade Center. The exhibition hall has successfully hosted more than 400 fairs, and the conference hall carries about 4700 conferences every year.

China World Trade Center Co. Ltd. is a joint venture company of Hong Kong Kerry Xingye Co. Ltd. (subsidiaries of Malaysian Guo Brothers Group) and Xinguang Real Estate Management Center (subsidiaries of Chinese national-owned China Foreign Trade Consulting Company) since 1998.

Financial Overview

Related companies: (Name, relationship, and percentage of ownership/rights & interests):

China Textile Group Co. Ltd. Indirect shareholder, percentage of rights and interests: 15%

Xinguang Real Estate Centre, Indirect shareholder, percentage of rights and interests: 22.92%

Beijing Jingcheng Mechanical Electronics Holding Co. Ltd. , Indirect shareholder, percentage of rights and interests:14.58%

Seanoble Assets Limited Company, Indirect shareholder, percentage of rights and interests: 100%

China Zhonghua Group Company. , Indirect shareholder, percentage of rights and interests: 15%

China World Trade Centre Co. Ltd. Holding Company, percentage of rights and interests: 80.14%
World Trade Center Hotel Management Co. Ltd. Holding subsidiaries, percentage of ownership: 95%

Beijing Shidai Net-star Technology Co. Ltd. Collaboration

China World Trade Investment Co. Ltd. Actual controller, percentage of ownership: 50%

Kerry Xingye Co. Ltd. Actual controller, percentage of ownership: 50%

World Trade Construction (Hong Kong) Co. Ltd. Same Holding Company

Shangrila (Asian) Co. Ltd. Actual controller, percentage of rights and interests: 100%

China Life Insurance (Group) Company. Actual controller, percentage of rights and interests: 32.50%

Stock Health:

As on 25 July, 2008

Open: 12.57    High: 12.80   Low: 12.26   Close: 12.57   Vol.:  5,035.637                 

Business Performance:

     Unite: RMB 10,000

Comparing

China World Trade Center Co. Ltd. vs. Chinese Realty Industry’ average

                                                                                                 Unit: RMB 1 billion Yuan

Note: There are in total 96 listed realty companies in Shanghai & Shenzhen Stock Exchange market
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Daily Stats (last one month):

From the lights of the above, the overall trend of the stock is going upwards in the past one month, however, small-scale fluctuations is involved throughout. In my opinion, this trend is likely to carry on, and hopefully the stock price will reach RMB 15 Yuan. I would like to suggest short-term investors to reduce their holdings around this price.

I would also like to take a review at the past performance of this stock. On June, 2007, this stock has once reached its historical peak at RMB 27.14 Yuan, after that, it has been continuously sliding until its new lowest point at RMB 10.11 Yuan. It is not a surprise as the overall stock market has also been cut into half during this corresponding time.

To have a close look at last two trading sessions’ of stock performance, the volume has been notably enlarged, which means the major capital inflow is inserting; meanwhile, the fluctuations seems to highlight that this stock is growing under pressure. The delay in deadline of China World Trade Center III project ( from year 2007 to the end of year 2008), which is caused by restrictions related to the 2008 Beijing Olympic Games is maybe one of the reasons that have shaken the market confidence. I assume, unless a stronger capital inflow getting involves, which it is rather unlikely, or the publishing of positive news regarding to the on-going project, the stock will remain the current trend - somewhat growing accompanied with turbulence. Therefore, I would personally suggest middle term and long term investors, to pay attention to such factors as the progress of China World Trade Center III project, office rental increase or decrease, construction of new office building in CBD area, etc., because this news will trigger a notable boost or drop in the stock price.

Unlike other real estate development companies who sale the property in order to make instant investment return, China World Trade Center’s business income is solely contribute by rental. This is maybe, in my opinion, the essential reason the rank of company’s business performance is not on pole position. Investors should not be confused by it because as a matter of fact, the company has long-term stable rental income from their target customers, who are mainly multi-national giants in the field of finance, insurance, telecom and consulting services.

The company has achieved business income of total RMB 886 million Yuan in year 2007, which counts 3.88% growth, correspondingly to the pervious year; and the parent company has made net profit of RMB 289 million Yuan, equal to 19.49% in growth, comparing the same with year 2006. In my assumption, after China World Trade Center III project finish and start its operation in year 2009, the company’s office rental will largely increase. In addition, according to latest news, the company is going to reach an agreement of purchasing the land beside its III project from Guohui Real Estate Co. Ltd. It shows the company’s aggressive strategy. Therefore, I strongly believe this is stock has superior value for not only short-term investors but also for middle and long-term investors.