LONDON (Alliance News) - Pacific Alliance China Land Ltd on Thursday said its net asset value has declined over its first half ended June 30 due to additional tax on realisation proceeds and foreign exchange losses.
The closed-end investment company reported a net asset value of USD133.7 million at the end of its first half on June 30, equal to USD2.1704 per share, down 4.0% from its year-end. On December 31, Pacific Alliance China's net asset value was USD234.8 million, equal to USD2.2601 per share.
The company said this drop resulted from the recent renminbi depreciation as well as further tax on the realisation proceeds from the sale of its 40% stake in Project Diplomat to a local fund managed by CITIC Private Equity Fund Management Co Ltd.
Pacific Alliance China said China's housing market continued its recovery during the first half of 2016 across much of the country and particularly in the four tier-one cities of Beijing, Shanghai, Guangzhou and Shenzhen. Prices and volumes also increased in the tier-two cities of Nanjing, Suzhou, Hangzhou, Hefei and Xiamen.
However, the recovery remains uneven as many smaller tier-three cities "still face large inventories of unsold homes".
"We expect market sentiment to improve moderately during the second half of 2016, and the housing recovery to continue in tier-one and tier-two cities while many tier-three cities remain burdened with large inventory overhangs," said Chair Margaret Brooke.
Pacific Alliance China said it will focus its efforts on realising its only remaining asset, Project Auspice to maximise value for shareholders going into the second half.
Shares in Pacific Alliance China were untraded on Thursday, having last traded at USD1.81.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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