China Jishan sees 330.7m yuan in pre-sales from project

TEXTILE company China Jishan Holdings' indirect wholly-owned subsidiary has secured about 330.7 million yuan (S$65.2 million) in contracts following the Aug 1 launch of pre-sales of residential units at a project in the Chinese city of Shaoxing.

Of the 330.7 million yuan, about 125.5 million yuan has been received by China Jishan, and the remainder will be paid by the buyers through mortgage loans at a later stage, it said in a filing to the Singapore Exchange on Monday night.

The sale proceeds will be used to repay the principal and interest of a loan from a third-party lender and to pay costs relating to the project.

China Jishan went on to highlight that monies received and/or to be received by the group from the pre-sales will not have an impact on the profit and loss of the group in FY20. This is because pre-sales may only be recognised when the properties are successfully completed and delivered to the buyers, which is estimated to take place in 2023.

It added: "This is the group's opportunistic and first foray into real estate development in (China), and the group does not have any track record or prior experience in real estate development. As such, there is no certainty that the group will be successful in the pre-sales."

It also warned of other potential challenges, such as any changes in the Chinese government's policies to curb real estate prices from appreciating, as well as the possibility that the group may not garner the necessary approvals on time.

Trading in China Jishan shares has been suspended since July 15, as the company could not demonstrate its ability to continue as a going concern to the bourse operator by that deadline.