Nam Tai Property : NTP - Reports Q4 2016 Results

FOURTH QUARTER NEWS RELEASE

Investor relations contact: Please refer to the Nam Tai website (www.namtai.com)

Mr. Kevin McGrath or the SEC website (www.sec.gov) for Nam Tai press releases

Managing Partner of Cameron Associates and financial statements. Tel.:[phone]

E-mail: [e-mail]

NAM TAI PROPERTY INC.

Reports Q4 2016 Results

SHENZHEN, PRC - January 23, 2017 - Nam Tai Property Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTP) today announced its unaudited results for the fourth quarter ended December 31, 2016.

KEY HIGHLIGHTS

(In thousands of US dollars, except per share data, percentages and as otherwise stated)

Quarterly Results			Twelve months Results
Q4 2016	Q4 2015	YoY(%)(c)	12M 2016	12M 2015	YoY(%)(c)
Operation income	$603	$673	(10)	$2,508	$2,978	(16)
Net operation income	$603	$209	189	$1,768	$1,029	72
% of operation income	100.0%	31.1%	70.5%	34.6%
Operating loss	$(1,415)	$(4,696)	-	$(6,591)	$(12,833)	-
% of operation income	(234.7%)	(697.8%)	(262.8%)	(430.9%)
per share (diluted)	$(0.04)	$(0.13)	-	$(0.18)	$(0.32)	-
Net loss (a)(b)	$(5,235)	$(4,999)	-	$(9,534)	$(13,158)	-
% of operation income	(868.2%)	(742.8%)	(380.1%)	(441.8%)
Basic loss per share	$(0.14)	$(0.14)	-	$(0.26)	$(0.32)	-
Diluted loss per share	$(0.14)	$(0.14)	-	$(0.26)	$(0.32)	-
Weighted average number of shares ('000)
Basic	36,647	36,700	36,673	40,549
Diluted	36,647	36,700	36,673	40,549

Notes:

1. Net loss for the three months ended December 31, 2016 mainly included exchange loss of $5.2 million as a result of the depreciation of Renminbi against US dollars in Q4 2016 and general and administrative expenses of $2.0 million, but partly offset by the interest income of $1.4 million earned from time deposits and net operation income of $0.6 million, further details can be found in the Operating Results section on page 2.

2. Net loss for the twelve months ended December 31, 2016 mainly included the general and administrative expenses of $8.4 million and exchange loss of $8.3 million as a result of the depreciation of Renminbi against US dollars during the twelve months ended December 31, 2016, but partly offset by the interest income of $5.6 million earned from time deposits and net operation income of $1.8 million, further details can be found in the Operating Results section on page 2.

3. Percentage change is not applicable if either of the two periods contains a loss.

4. The Board of the Company approved an increase in the annual dividend of 2017 to $0.28 ($0.07× 4 quarters) from $0.08 ($0.02 × 4 quarters) of 2016 per outstanding share of the Company's common stock, effective from the first quarter of 2017. As shown on the balance sheet of December 31, 2016, the 2017 dividend of approximately $10.2 million had been accrued.

5. Capitalization on project investment was $1.3 million for Q4 2016, totaled $6.1 million for the twelve months ended December 31 2016, and our accumulated project investment was $37.8 million up to December 31, 2016, which was recorded under the account of real estate properties under development in the balance sheet as at December 31, 2016.

6. This information has been published on the Company's website http://www.namtai.com/investors#investors/quarterly_earnings under the quarterly earnings report of Q4 2016 on page 7, Condensed Consolidated Statements of Comprehensive Income.

SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE FOURTH QUARTER OF 2016

Key Highlights of Financial Position

As at December 31, 2016	As at December 31, 2015
Cash, cash equivalents and short term investments	$184.2 million(a)	$207.4 million
Ratio of cash(b) to current liabilities	14.79	35.06
Current ratio	16.63	39.30
Ratio of total assets to total liabilities	19.98	45.90
Return on equity	(3.8%)	(4.5%)
Ratio of total liabilities to total equity	0.05	0.02

Notes:

1. Compared with December 31, 2015, the decrease of $23.2 million in the cash, cash equivalents and short term investments as of December 31, 2016 was mainly due to the translation loss of $12.3 million as a result of the depreciation of Renminbi against US dollars during the twelve months ended December 31, 2016, the payments of $6.3 million for share repurchase program and $5.6 million capitalized for land development project, which was recorded under the account of real estate properties under development in the balance sheet as at December 31, 2016.

2. Cash in the financial ratio included cash, cash equivalents and short term investments in the amount of $184.2 million, $207.4 million as at December 31, 2016 and December 31, 2015 respectively.

OPERATING RESULTS

Operation income for the fourth quarter of 2016 and the same quarter of last year were mainly derived from properties and lands located in Shenzhen. Operating loss for the fourth quarter of 2016 was $1.4 million, a decrease of $3.3 million, compared to operating loss of $4.7 million in the fourth quarter of 2015. Operating loss for the twelve months ended December 31, 2016 was $6.6 million, a decrease of $6.2 million, compared to operating loss of $12.8 million in the same period of 2015. The rental agreement with an external lessee on the Guangming land ended in the second quarter of 2015 due to the expiry of lease terms. As such, from the fourth quarter of 2015 onwards, our operation income has correspondingly been reduced.

Net loss for the fourth quarter of 2016 was $5.2 million mainly represented exchange loss of $5.2 million as a result of the depreciation of Renminbi against US dollars in the fourth quarter of 2016 and general and administrative expenses of $2.0 million, but partly offset by the interest income of $1.4 million earned from time deposits and net operation income $0.6 million, or loss of $0.14 per diluted share. Compared to the financial results for the same periods in 2015, the net loss of $5.0 million mainly represented exchange loss of $1.4 million as a result of the depreciation of Renminbi against US dollars in the fourth quarter of 2015 and general and administrative expenses of $4.9 million, but partly offset by the interest income of $1.3 million earned from time deposits and net operation income $0.2 million, or a loss of $0.14 per diluted share in the fourth quarter of 2015.

Net loss for the twelve months ended December 31, 2016 was $9.5 million mainly included the general and administrative expenses of $8.4 million and exchange loss of $8.3 million as a result of the depreciation of Renminbi against US dollars during the twelve months ended December 31, 2016, but partly offset by the interest income of $5.6 million earned from time deposits and net operation income $1.8 million, or a loss of $0.26 per diluted share. Compared to the financial results for the same periods in 2015, the net loss of $13.2 million mainly included general and administrative expenses of $13.9 million and exchange loss of $8.7 million as a result of the depreciation of Renminbi against US dollars during the twelve months ended December 31, 2015, but partly offset by the interest income of $8.1 million earned from time deposits and net operation income $1.0 million, or a loss of

$0.32 per diluted share in the same period of 2015.

As the majority of our assets are denominated in Renminbi, the translation of Renminbi denominated assets to US dollars for reporting purposes has resulted in foreign exchange loss in this quarter and in the twelve months ended December 31, 2016. Due to the fluctuation of exchange rate for Renminbi against US dollars, foreign exchange loss for the fourth quarter of 2016 was $5.2 million, comparable to 100% of the amount of our net loss of the same period. And the foreign exchange loss for the twelve months ended December 31, 2016 was $8.3 million, comparable to 87% of the amount of our net loss of the same period. However, since the majority of our payments obligations are also denominated in Renminbi, we do not expect the movement of Renminbi against US dollars to materially and adversely impact our business.

The Board of the Company approved an increase in the annual dividend of 2017 to $0.28 ($0.07 x 4 quarters) from

$0.08 ($0.02 x 4 quarters) of 2016 per outstanding share of the Company's common stock, effective from the first quarter of 2017. As shown on the balance sheet of December 31, 2016, the 2017 dividend of approximately $10.2 million had been accrued. The decision to continue dividend payments in 2017 does not necessarily guarantee that dividend payments will continue thereafter or at the same amount.

Capitalization on project investment was $1.3 million for Q4 2016, totaled $6.1 million for the twelve months ended December 31, 2016, and our accumulated project investment was $37.8 million up to December 31, 2016, which

was recorded under the account of real estate properties under development in the balance sheet as at December 31, 2016.

Our business of land development is currently in the preparatory stage where it takes time to apply for the relevant licences from the PRC government. During this preparatory stage of the land development, our only sources of income are from limited deposit interest and rental income; therefore, we expect to continue incur losses during this stage.

Please see page 7 of the Company's Condensed Consolidated Statements of Comprehensive Income for further details. This information has also been published on the Company's website at http://www.namtai.com/investors#investors/quarterly_earnings in the quarterly earnings report of Q4 2016 on page 7, Condensed Consolidated Statements of Comprehensive Income.

COMPANY OUTLOOK

With respect to the development of our "Inno Park" and "Inno City" in Shenzhen, the construction permit application processes have been proceeding smoothly and each related step is on schedule and within our expectation.

As part of our preparation for the development of "Inno Park", the design development has been almost completed, and our internal team is working closely with the external project management company (WSP Parsons Brinckerhoff), quantity surveyor (Currie & Brown) and architectural design firm (Ronald Lu & Partners) on the construction drawing design and the tender for the general construction contractor.

As part of our preparation for the development of "Inno City", the Company has started selecting the architectural design firm, project management company and quantity surveyor, which are expected to be engaged and start working before October 2017.

The updated information regarding the development projects are set out below for your reference:- Part I: Summary of updated gross floor areas for the two projects:

Inno Park Shenzhen, Guangming (Approved)		Inno City Shenzhen, Gushu Phase I + Phase II (Planned)
Plot ratios	2.59		6.00
Gross floor area ("GFA") sq. meters	Office	175, 406	Office	93,930
	Apartment 61,000		Apartment + SOHO	142,230
	Commercial 28,594		Commercial	25,000
	Other	4,159.13	Other	7,200
	269,159.13		268,360
Underground floor area sq. meters	66,649.23		80,000
Total CFA ( construction floor area) sq. meters	335,808.36		348,360
Remark	The above figures are definite for the design and construction.		The above figures are subject to adjustment upon the final approval of the relevant authorities in China.

Part II: Updated timetable for the two projects:

Main Certificates	Estimated Completion Time
	Inno Park	Inno City Phase I#	2017		2018		2019		2020		2021
A	Real Estate Certificate	Obtained Jun 4, 2015	Sep. 2017	#
B*	Land Use Permit	Obtained Sep 21, 2015.	Apr. 2018	#
C	Planning Permit on Construction	Jul. 2017	Sep. 2018		#

Engineering
D	D1	Early Construction Permit of Pile Foundation	May. 2017	N/A
	D2	Construction Work Permit	Nov. 2017	Mar. 2019		#
	D3	Main Construction Acceptance	May. 2019	Mar. 2021	#
	D4	Completion Time	Sep. 2019	Jul. 2021		#
E		The real property ownership certificate	Mar. 2020	Dec. 2021		#
Remar k		1. represents "Inno Park", while # is for "Inno City" Phase I. The construction of "Inno Park" is expected to commence with ground-breaking before April 2017, starting with the laying of the foundation first. The construction of "Inno City" Phase I is expected to commence around April 2019, while Phase II is still under planning and has not been scheduled yet.

Part III: Updated Budgetary Estimate for the two projects:

Cost ( Million US$)	Inno Park	Inno City Phase I + Phase II
1	Construction Cost	320	550
2	Operation Cost	25	30
Total (Estimated)		345	580
Remark		Based on the component of schematic design estimation created by quantity surveyor, Currie & Brown ("C&B") used for cost controlling including design and construction, plus, including operation costs (overhead expenses), changes in exchange rates and interest rates, the impact of overall inflation rates and other expenses, together constitute the total estimation by the management as above.

Up to the date of this announcement, the two projects are progressing smoothly and the various application processes for the necessary permits from various governmental agencies are progressing on schedule, as well as following all estimated budget forecasts for the project investment and projected return within original plan, without any significant deviation.

We will endeavour to update you information on the progress of these two projects on a quarterly basis with revision, if any, base on the actual changes of condition or events.

Sale of Wuxi Plant

As for our Wuxi plant, the factory building continues to be listed for sale and we still expect it to be sold within 2017 this year.

Real Estate Market Conditions in China

According to the latest data announced by National Bureau of Statistics on January 18, 2017, the average price of new homes in 70 major cities rose 10.5 percent year-on-year in November and December, from 10.1 percent in October, while the price of new homes in Shenzhen City in December rose 23.5 percent year-on-year. And, more than 72 percent of the cities saw prices rose on a monthly basis.

Nevertheless, under the restrictive measures implemented in the beginning of October 2016, tier one and certain hotspot tier two cities saw a rapid cooling in real estate market, while price of new homes in middle-sized and small cities stayed relatively stable. Compare to the data of September 2016 announced by National Bureau of Statistics,