PACIFIC ALLIANCE CHINA LAND LTD Patrick Boot pboot@pag.com (86) 21 6010 6188
Pacific Alliance China Land
Quarterly Newsletter June 2019
Fund Performance
NAV per Share
Total Net Assets
Issued Shares
Share Price
Market Capitalization
Portfolio Breakdown
Cash
Investments 3
Foreign Exchange Hedging Options
Total Cash and Investments
Other Net Assets/(Liabilities)
Fund Details
Bloomberg Code
Reuters Code
ISIN Code
Listing
Date of Inception
Domicile
Structure
As at 30 June 2019
US$ 2.6056
US$ 6.9m
2,653,0781
US$ 2.63
US$ 7m
US$ 7,112,8892
US$ 7,689
US$ 7,120,578
US$ (207,769)4
PACL LN
PACL.L
KYG6846Y1035
AIM London Stock Exchange 22 November 2007 Cayman Islands Closed-end fund
Investment Objective
Pacific Alliance China Land Limited (PACL) is a closed-end real estate fund focused on investing in existing properties, new developments, distressed projects and real estate companies in Greater China. The Fund invests opportunistically across all types of property, with a focus on first, second and third tier cities. The Fund is advised by a dedicated team of experienced professionals located across China.
On 25 July 2014, PACL's investment policy changed to restrict new investment
solely to a) supporting existing investments, b) utilizing RMB cash assets subject to exchange control restrictions, for low risk short-term investments, and c) to focus future investment management efforts on the realization of the portfolio and the return of net realization proceeds to Shareholders. PACL has since July 2014 returned a total of US$262million to shareholders by way of share repurchases.
Portfolio News
The Fund's net asset value (NAV) as of 30 June 2019 was US$6.9 million or US$2.6056 per share, a decrease of 5.2% from the previous quarter ending 31 March 2019. Following the sale of its assets, PACL no longer has active investments. The remaining cash holdings are now available to be distributed to shareholders, as detailed in the Distribution section of this newsletter.
In line with market expectations, China's Gross Domestic Product (GDP) grew 6.2% year-on-year in the second quarter, a slight decrease compared to 6.4% of the last quarter. Robust growth in consumption and the services sector continued to contribute positively to economic performance as tertiary industries grew by 7% in
Q2 2019. Real estate development investment increased by 10.9% year on year in the first half of 2019, slightly lower than Q1 2019. The Chinese economy still faces challenges and downward pressure from excess industrial capacity, as well as continuing trade tensions with its largest trading partner, the United States. While the macroeconomic situation is decidedly mixed, China's overall outlook remains stable despite the ongoing China-U.S. trade disagreement. The government is likely to continue its monetary policy support and fiscal expansion in order to maintain a moderate and sustainable level of growth.
-
2,653,078 ordinary shares issued and outstanding. In December 2018,
20,833,331 shares were repurchased and cancelled. - Approximately US$0.09m equivalent was held in PRC banks in form of RMB cash assets.
- Following the share capital restructuring in March 2009, 48.69% of the original PACL ordinary shares in issue were repurchased and cancelled. In return, shareholders who tendered their shares received an equivalent number of new shares in PACL II Limited, a Cayman Islands private realization vehicle that would distribute free cash from exited projects (invested prior to the reconstruction) held by PACL. The investments values represent only that amount attributable to the PACL shareholders and exclude any portion that is attributable to PACL II. Those investments marked * were acquired after the restructuring and PACL II does not have a participation.
- Other Assets/(Liabilities) - Includes Accrued Taxation and other payables of US$0.2m
According to data from China's National Bureau of Statistics (NBS), prices of new homes increased in 65 of the 70 cities tracked by the NBS in June 2019, compared with 66 in March 2019. Most tier-one and tier-two cities saw limited growth in terms of both price and transaction volumes as a result of the Chinese government's stricter property tightening measures. Average new home prices in first-tier, second- tier, and third-tier cities increased 0.2%, 0.8%, and 0.7% month-on-month, respectively.
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Patrick Boot pboot@pag.com (86) 21 6010 6188 | |||||||||||||
US$ NAV | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD |
Return% | |||||||||||||
2007 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | -0.08% | -0.08% |
2008 | -0.27% | -0.33% | +0.04% | +2.61% | +0.78% | +0.55% | +0.40% | -0.16% | +0.76% | +1.21% | -0.15% | +0.59% | +6.20% |
2009 | +0.29% | +0.06% | +2.61% | +0.05% | +0.12% | +1.15% | +0.50% | +1.14% | +0.82% | -0.20% | -0.21% | +20.79% | +28.60% |
2010 | +0.53% | -0.21% | +1.49% | +0.02% | -0.09% | +1.96% | +1.53% | -0.33% | +11.63% | +0.66% | +0.03% | +8.90% | +28.10% |
2011 | -0.51% | -0.04% | +0.35% | +2.61% | -0.09% | +1.00% | +7.73% | 1.34% | -0.19% | +0.86% | -0.28% | +6.12% | +20.55% |
2012 | -0.26% | -0.12% | +0.75% | -0.16% | -0.45% | +2.61% | -0.17% | -0.28% | +1.00% | +0.12% | +0.77% | +3.10% | +6.97% |
2013 | +0.24% | -0.08% | +0.12% | +1.46% | +0.05% | +0.86% | +2.90% | -0.06% | -0.10% | +0.11% | -0.06% | +3.52% | +9.25% |
2014 | -0.75% | -0.94% | -5.35% | -0.27% | -0.63% | -0.24% | -0.19% | +1.38% | +2.94% | +0.52% | +2.94% | +6.55% | +5.64% |
2015 | -1.18% | -0.62% | -0.88% | +4.10% | -0.12% | -0.65% | -2.05% | -6.11% | -1.06% | +3.91% | -3.41% | -5.40% | -13.13% |
2016 | -5.29% | -3.34% | +8.38% | +1.40% | -1.70% | -2.89% | +3.62% | +2.90% | +3.18% | -0.57% | +11.51% | +8.38% | +26.96% |
2017 | -0.03% | -0.70% | -0.37% | -0.32% | +0.21% | -0.06% | +0.25% | +1.90% | -1.21% | -0.11% | -0.50% | +1.42% | +0.43% |
2018 | +3.06% | -0.99% | -0.48% | -0.93% | -1.31% | -2.19% | -2.92% | -0.40% | -0.85% | -1.32% | -0.19% | +2.90% | -5.64% |
2019 | +2.46% | -0.05% | -1.31% | -0.59% | -3.09% | -1.59% | -4.18% |
Portfolio News (continued)
China's home sales volume, in terms of transacted building floor area, fell by 1.8% year-on-year in the first half of 2019. The Manager expects that the central government will continue to adopt differentiated housing policies for different cities, tightening controls in tier-one and tier-two cities where housing inventories are low, and loosening controls in lower-tier cities in order to boost demand and help facilitate a reduction of inventories in those oversupplied markets.
Conclusion
The fund no longer has active investments and is in the process of distributing returns to shareholders.
Any questions regarding the above information can be addressed with the Manager via email or telephone.
Fund Highlights
Distributions
Distributions
Following the completion of the capital reduction of the Tianjin WOFE, a distribution to shareholders in the region of US$5m* is expected to be made in Q3 2019, subject to Board approval, and further details will be notified in due course.
- The estimated distribution amount is based on the unaudited 30 June 2019 NAV of US$6.9 million, reduced by estimated operating and winding up expenses of US$0.5 million plus a US$1.4million reserve. Once the liquidation of the Fund is completed, which the Manager expects will take place by the end of the year, the excess cash will be paid out as the final distribution.
Portfolio Manager
Patrick Boot
Investment Manager | |
PAG Real Estate | |
Tel: (86) 21 6010 6188 | pboot@pag.com |
Nominated Adviser | |
Grant Thornton UK LLP | |
Philip Secrett | |
Tel: (44) 207 385 5100 | philip.j.secrett@uk.gt.com |
Important Information
The information contained in this Quarterly Update has been prepared solely by Pacific Alliance Real Estate Limited ("the Manager"). None of the information contained in this Monthly Update is intended as financial, investment or professional advice and should not be taken as such by any party receiving it or obtaining it through any means. Nothing in this Monthly Update should be construed as an offer to sell or a solicitation of an offer to buy any security or to participate in any trading strategy. Contents are based on sources which the Manager believes to be reliable; however no warranty or representation, express or implied is given as to accuracy and completeness. You should rely on independent confirmation of any information contained herein before relying on that information for any purpose whatsoever. Any forward looking statement included in this Monthly Update is based on the opinions or expectations of the Manager, and actual results could differ materially. Historical performance is not an indicator of future performance and should not be assumed or construed as such. Finally, all the information contained herein including market data and prices are subject to change without notice. The information contained herein is being made available to institutional investors and investment professionals only as defined in the Financial Services and Markets Act 2000.
Pacific Alliance Real Estate Limited is the investment manager of Pacific Alliance China Land Limited. The Manager is not regulated by the Financial Services Authority.
www.pacl-fund.com
Pacific Alliance China Land Limited is part of PAG, one of the region's largest Asia-focused alternative investment
managers with funds under management across Private Equity, Real Estate and Absolute Return strategies. PAG has a presence across Asia with over 330 staff working in the region.
www.pag.com
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Disclaimer
Pacific Alliance China Land Ltd. published this content on 24 July 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 July 2019 06:19:07 UTC
