Nam Tai Property (NTPIF) Risk Analysis
Risk Overview Q4, 2017
Source: the company's latest filing for the period ended Dec 31, 2017, filed Mar 09, 2018
Risk Change Over Time
No filing history is available.
- Share Price & Shareholder Rights - Risk 1The interests of our largest shareholder may differ from the interests of other shareholders.
Based on the Schedule 13D/A filed with the SEC on December 15, 2017, Kaisa Group Holdings Ltd. ("Kaisa") beneficially owned approximately 24.5% of our outstanding shares as of December 14, 2017. An affiliate of Kaisa, Mr. Ying Chi Kwok, also serves as our chief executive officer and executive director. Our company is mindful of protecting the interest of minority shareholders. Our corporate governance procedures, including the election of a board that comprises of majority independent directors, is set up to safeguard the interests of all shareholders, particularly our minority shareholders, and not to favor any significant shareholder. However, under most circumstances, we cannot prevent companies that are controlled by Kaisa or its affiliates from engaging in activities that may compete directly with the development of our Nam Tai Inno Park and Nam Tai Inno City projects or other activities that may have an adverse effect on our business. Further, as shareholders, they could also influence the outcome of any corporate transaction or other matters submitted to our shareholders for approval, including the election of directors, mergers and acquisitions, and other significant corporate actions, to the extent they are not required to abstain from voting in respect of such transactions. The interests of Kaisa and its affiliates may differ significantly from, or compete with, our interests or the interests of our other shareholders, and we cannot assure you that Kaisa and its affiliates would always exercise influence over us in a manner that is consistent with the interests of our other shareholders
- Accounting & Financial Operations - Risk 2Certain information contained herein is derived from unofficial publications.
Certain information in this Report relating to the growth of the Shenzhen city, including statistics relating to the growth of its GDP and industry sectors, is derived from various government publications. Such information may not be consistent with those prepared by other independent market research within or outside of the mainland China. Such information also has not been independently verified by us.
- Accounting & Financial Operations - Risk 3We might not be able to carry all of our operating losses forward.
Our operating activities in the short term will consist principally of capitalized project investments. While certain operating losses may be carried forward as tax credits in future years; if there are changes in the relevant PRC tax policy with respect to the real estate industry, our forecasted profits in the future may also be affected.
- Accounting & Financial Operations - Risk 4Our margins may be affected by increases in our operating and other expenses.
Our operations may be subject to increases in operating and other expenses due to a number of factors including, but not limited to, any of the following: - increases in raw material prices;- increases in labor costs;- increases in construction costs;- increases in the rate of inflation;- changes in laws, regulations or government policies that increase the cost of compliance with such laws, regulations or policies;- increases in insurance premiums;- increases in customs duties, business taxes, property taxes and other statutory changes;- adverse changes in the cost of existing and future debt financing; and - other unanticipated circumstances or cost increases. Any increase in the above operating and other expenses would have an adverse effect on our cash flows. Furthermore, any sustained increases in our operating and other expenses could result in all or a portion of our operations becoming unprofitable, thereby resulting in an adverse effect on our business, financial condition and results of operation.
- Accounting & Financial Operations - Risk 5The appraised values of our properties may be different from the actual realizable value and are subject to change.
The appraised values of our properties made available by us on our website were prepared by Savills, Cushman & Wakefield and Jones Lang LaSalle as real estate feasibility studies that are based on multiple assumptions containing elements of subjectivity and uncertainty, including, among other things, that: - we will complete development projects on time;- we have obtained or will obtain on a timely basis all approvals from regulators necessary for the development of the projects; and - we have obtained valid land titles to the development projects. As a result, the appraised values of our properties may differ materially from the price we could receive in an actual lease or sale of the properties in the market and should not be taken as their actual realizable value or a forecast of their realizable value. Unforeseeable changes to our development of the property projects, as well as national and local economic conditions, may affect the value of our properties. In particular, the valuation of our properties could stagnate or even decrease if the market for comparable properties in Shenzhen, China experiences a downturn whether as a result of Government policies directed to the property sector or otherwise. Information contained in or that can be accessed through the website mentioned in this Report does not form part of this Report.
- Corporate Activity and Growth - Risk 6We have a comparatively limited track record in the real estate development business and cannot guarantee our continued success.
In contrast to our 30 years of experience in the electronic manufacturing industry, we entered the real estate development business relatively recently. Nam Tai Inno Park and Nam Tai Inno City represent our first two projects. Given that the real estate development business in China is highly competitive and dominated by several large, experienced real estate developers, our limited track record may impact our ability to continue our real estate development business successfully. In addition, the success of our real estate development business will depend upon our ability to: - complete construction of our self-developed properties on time and within estimated budgets;- obtain, on a timely basis, all approvals necessary to develop and operate our properties;- develop properties in locations that are desirable to prospective tenants;- accurately anticipate the requirements of prospective tenants; and;- respond to dynamic market conditions. Our ability to manage these risks will directly impact the success of our real estate development business and, our failure to do so could adversely impact our overall financial condition, results and cash flows.
Risk Highlights Q4, 2017
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 47
- Share Price & Shareholder Rights - Risk 1AddedThe interests of our largest shareholder may differ from the interests of other shareholders.
Based on the Schedule 13D/A filed with the SEC on December 15, 2017, Kaisa Group Holdings Ltd. ("Kaisa") beneficially owned approximately 24.5% of our outstanding shares as of December 14, 2017. An affiliate of Kaisa, Mr. Ying Chi Kwok, also serves as our chief executive officer and executive director. Our company is mindful of protecting the interest of minority shareholders. Our corporate governance procedures, including the election of a board that comprises of majority independent directors, is set up to safeguard the interests of all shareholders, particularly our minority shareholders, and not to favor any significant shareholder. However, under most circumstances, we cannot prevent companies that are controlled by Kaisa or its affiliates from engaging in activities that may compete directly with the development of our Nam Tai Inno Park and Nam Tai Inno City projects or other activities that may have an adverse effect on our business. Further, as shareholders, they could also influence the outcome of any corporate transaction or other matters submitted to our shareholders for approval, including the election of directors, mergers and acquisitions, and other significant corporate actions, to the extent they are not required to abstain from voting in respect of such transactions. The interests of Kaisa and its affiliates may differ significantly from, or compete with, our interests or the interests of our other shareholders, and we cannot assure you that Kaisa and its affiliates would always exercise influence over us in a manner that is consistent with the interests of our other shareholders
- Share Price & Shareholder Rights - Risk 2ChangedOur directors, senior management and principal shareholders own a large portion of our common stock allowing them to control or substantially influence the outcome of matters requiring shareholder approval.
On January 31, 2018, members of our senior management, our Board of Directors and principal shareholders including Kaisa as a group beneficially owned approximately 44.0% of our common shares. As a result, acting together, they may be able to control and substantially influence the outcome of all matters requiring approval by our shareholders, including the election of directors and approval of significant corporate transactions. This ability may have the effect of delaying or preventing a change in control of Nam Tai, or causing a change in control of Nam Tai that may not be favored by our other shareholders.
- Share Price & Shareholder Rights - Risk 3The market price of our shares will likely be subject to substantial price and volume fluctuations.
The markets for equity securities have been volatile and the price of our common shares has been and could continue to be subject to wide fluctuations in response to variations in our operating results, news announcements, trading volume, sales of common shares by our officers, directors and our principal shareholders, customers, suppliers or other publicly traded companies, general market trends both domestically and internationally, currency movements and interest rate fluctuations. Other events, such as the issuance of common shares upon the exercise of our outstanding stock options could also materially and adversely affect the prevailing market price of our common shares. Further, the stock markets have often experienced extreme price and volume fluctuations that have affected the market prices of the equity securities of many companies and that have been unrelated or disproportionate to the operating performance of such companies. These fluctuations may materially and adversely affect the market price of our common shares.
- Share Price & Shareholder Rights - Risk 4Future issuances of preference shares could materially and adversely affect the holders of our common shares or delay or prevent a change of control.
Our Board of Directors may amend our Memorandum and Articles of Association without shareholder approval to create from time to time, and issue, one or more classes of preference shares (which are analogous to preferred stock of corporations organized in the United States). While we have never issued any preference shares and we have none outstanding, we could issue preference shares in the future. Future issuance of preference shares could materially and adversely affect the rights of the holders of our common shares, or delay or prevent a change of control.
- Share Price & Shareholder Rights - Risk 5Our status as a foreign private issuer in the United States exempts us from certain of the reporting requirements under the Securities Exchange Act of 1934, and corporate governance standards of the New York Stock Exchange, or NYSE limiting the protections and information afforded to investors.
We are a foreign private issuer with the meaning of the rules under the Securities Exchange Act of 1934, as such we are exempt from certain provisions applicable to a U.S. domestic public company, including: - the rules under the Securities Exchange Act of 1934 requiring the filing with the SEC of quarterly reports on Form 10-Q, current reports on Form 8-K or annual reports on Form 10-K;- the section of the Securities Exchange Act of 1934 regulating the solicitation of proxies, consents or authorizations respect of a security registered under the Exchange Act;- the section of the Securities Exchange Act of 1934 requiring directors, officers and 10% holders to file public reporting of their stock ownership and trading activities and imposing liability on insiders who profit from trades made in a short period of time;- the selective disclosure rules under Regulation FD restricting issuers from selectively disclosing material nonpublic information; and - the sections of the Securities Exchange Act of 1934 requiring insiders to file public reports of their stock ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction (i.e. a purchase and sale, or sale and purchase, of the issuer's equity securities within less than six months). In addition, because the Company is a foreign private issuer, certain corporate governance standards of the NYSE that apply to domestic companies listed on that exchange may not be applicable to us. For information regarding whether our corporate governance standards differ from those applied to U.S. domestic issuers, see the discussion under "NYSE listed Company Manual Disclosure" in ITEM 6. Directors and Senior Management of this Report. Because of these exemptions, investors are not afforded the same protections or information generally available to investors holding shares in public companies organized in the United States or traded on the NYSE. See reference "*" on page 52 of this Report under the heading "Compensation on an Individual Basis" for information and risks associated with disclosures we have made in this Report or may make in our proxy statements regarding compensation we have paid to our directors and senior management on an individual basis.
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