Chairman's Statement

Dear Shareholders,

On behalf of China New City Commercial Development Limited (the "Company") and its subsidiaries (collectively referred as the "Group"), I am pleased to present the results of the Group for the year ended 31 December 2015 ("the year under review").


For the year under review, revenue of the Group was approximately RMB503.99 million, representing an increase of approximately 141.31% from the year of 2014. Gross profit was approximately RMB179.44 million, representing an increase of approximately 65.21% as compared to the year of 2014. Profit attributable to equity holders of the Company was approximately RMB740.34 million, representing an increase of 55.37% when compared with the year of 2014, while earnings per share amounted to approximately RMB0.43 with an increase of 34.38% over the year of 2014. The board ("Board") of directors ("Directors") does not recommend the payment of final dividend for the year under review (2014:nil).


In 2015, the slowdown of economic growth in the People's Republic of China ("PRC") had prompted the PRC central government to change its control policies on real estate market, replacing the previous restrictive measures with more open and market-oriented policies. Under the stimulation of the multiple housing policies, the market was further fragmented with both quantity and price pushing up in first-tier and some popular second-tier cities, while those in third-tier and forth-tier cities still remain sluggish and disturbed by high inventory level. Looking ahead in 2016, it is expected that the PRC central government will push forward more supporting measures in monetary policy and fiscal policy and the overall housing market will remain stable.

The Group is a commercial property developer and operator committed to developing integrated commercial complexes in sub-city centers of secondtier cities in the Yangtze River Delta region. It anticipates expanding its business into the land development sector in different towns and counties in PRC in future as well as the respective new urbanization services. The Group follows the integrated business model of selling and leasing property, strategically decentralizing its income source and return period.

1. Property Development
In respect of property development, the delivery of part of the property of Jia Run Mansion(嘉潤公館), the serviced apartments of the International Office Center ("IOC") (Plot A3), was completed smoothly in which it drove up property sales income significantly. During the year under review, with Hangzhou Municipal Government announcing that it has successfully won the hosting of the 2022 Asian Games and is also the hosting city of the 2016 Group of Twenty (G20) Summit, the sales of Jia Run Mansion(嘉潤公館) which is adjacent to the Olympic Sports Center and Hangzhou International Convention Center went buoyant. The Group expects the average selling price of the project will increase further.

2. Investment Properties
In respect of the investment properties, the rental income of the shopping mall and office tower of Highlong Plaza in Xiaoshan District of Hangzhou City remained stable. Facing the dual bombardments from both emerging e-commerce as well as massive new supply in recent years, the Group continued to adjust the commercial combinations and business structure of its commercial properties, striving to improve customer's sense of experience. At the same time, the Group reached the strategic cooperation with Beijing Yintai Landmark Commercial Co., Ltd. (北京銀泰置地商業有限公司)in September 2015 to pursue the joint operation of Yuyao Zhong An YinTai Cheng(余姚眾安銀泰城)under the internet+ model, thereby enhancing the attraction of Yuyao Zhong An Times Square project significantly.

As at 31 December 2015, the fair value of the investment properties of the Group amounted to approximately RMB5,244,100,000 with a gross floor area ("GFA") of approximately 311,310 sq.m.

3. Hotel Operations
As to the hotel operations, the hotel Holiday Inn Hangzhou Xiaoshan operated well and the construction progress of the Hangzhou Qiandao Lake Run Zhou Resort Hotel project was also in line with its expectation. In September 2015, the Group announced the commencement of its new homestay business by rolling out an O2O platform "Zhong Jia Le Homestay Travel Web" (眾家樂民宿旅遊網)and the operations of the self-operated chain of homestay facilities(自營民宿連鎖店)under the brand name of "Another Village" (又一邨). By taking a comprehensive business model that integrate beer and skittles, tourism, shopping and accommodation as the service-oriented structure, it targets to establish a global homestay network with the foothold in PRC and create a renowned brand of homestay industry in PRC and even globally. As at 31 December 2015, the Group had already owned two self-operated homestay facilities under the brand name of "Another Village" and 33,000 rooms available for travellers for booking under the Zhong Jia Le Homestay Travel Web.

Looking ahead in 2016, the global market still remains sluggish, the economy of PRC will continue to face challenges in structural adjustments and retarding growth, and risks and opportunities co-exist in real estate market. The intensifying real estate market fragmentation last year had indicated that the property market has transformed from speculative investment demand to a market dominated by robust demand. The main development segment of the Group is at the Yangtze River Delta region that has strong economic fundamentals and benefited from the spillover effects of the Shanghai economy as well as the rapid internet economic development in Hangzhou. We strongly believe that the development projects under the Group will continue to be well received by the market.

IOC is still the major development project of the Group. Qianjiang Century City(錢江世紀城), where IOC is located, and Qianjiang New Town(錢江新城)across the river are the new main city centers of Hangzhou. The project enjoys a spectacular river view, and is also adjacent to Hangzhou Olympic Sports Stadium, which will host the 2022 Asian Games, and Hangzhou International Conference Center, which will host the 2016 Group of Twenty (G20) Summit. With the ancillary infrastructure of Qianjiang Century City further improved, the value of such project will further escalate. In addition, it is expected that the Group's Hangzhou Qiandao Lake Run Zhou Resort Hotel and Yuyao Zhong An Times Square under development will be completed one after another within this year or next year, whereby the Group will achieve significant growth in leasable area upon completion. The investment properties portfolio will be upgraded and renovated fully for improving both its value and rental income to increase its recurring revenue. Furthermore, the increasing domestic consumption power of Chinese nationals and the rapid promotion in urbanization will bring new opportunities to the Group in the development of community and urban commercial activities.

In recent years, the PRC central government issued documents on many occasions confirming the policy measures of facilitating tourism investments and consumption, mentioned the development of personalized and characterized rural tourism, and encouraged increasing credit support by financial institutions. The innovative and active internet development has further stimulated tourism development. The Group will fully develop a diversified internet-based industry that encompasses homestay, urban apartment, eco-catering, local specialty and capital operation by leveraging on the development model of selfoperated homestay under the brand names of the online "Zhong Jia Le Homestay Travel Web" and the offline "Another Village". Despite the two self-operated homestay facilities, "Another Village" which is owned by the Group, have not yet to make significant contribution to the Group's revenue, however, the Group plans to develop and expand "Another Village", its own brand, orderly in future, boosting the online cooperation resource with its offline brand in establishing a new norm for the nationwide homestay industry in PRC.

The Group will continue to achieve the development strategy of transforming from the traditional asset-intensive investment model to the light asset business-based model, actively facing the development opportunities brought by urbanization in the PRC, developing diversified new property projects by leveraging on the latest internet technology to achieve quality growth. Under the reasonable control of the existing investment size of commercial complexes, it will develop emerging industries like leisure tourism, elderly care and healthcare services, cultural and entertainment and modern agriculture.

The Group will also insist on its prudent financial strategies, increase corporate governance transparency, seek satisfactory and continuous returns for the shareholders of the Company.


At last, on behalf of the Board, I would like to express my sincere gratitude to the support and trust of the shareholders of the Company and business partners as well as the dedicated efforts of all the staff of the Group.

Shi Kancheng

Hong Kong, 22 March 2016