IsZo Capital LP releases an open letter to Nam Tai Property Inc. shareholders

NEW YORK, May 27, 2020 /PRNewswire/ -- IsZo Capital LP, which owns approximately 9.8% of the stock of Nam Tai Property Inc. (NYSE: NTP) released an open letter to NTP's shareholders regarding concerns over the control of the Company by minority shareholder Kaisa Group Holdings Ltd. (HKG: 1638). The full text of the letter can be accessed at http://www.fixntp.com/iszo and an excerpt is included below:

Shareholders:

As the largest independent shareholder of Nam Tai Property Inc. since 2017, we write to make you aware of the oppressive conduct, poor governance, and value destruction at the hands of the Company's management team and Board controlled by Kaisa Group Holdings Ltd. When presented with the facts, the need for immediate change is obvious:

• Share Price Destruction: The Company's stock price is trading at just $4.05 per share for a total market capitalization of less than $160 million as of yesterday's close—a 70% decline in share value since Kaisa replaced NTP's former CEO with Ying Chi Kwok, the younger brother of Kaisa's CEO, on January 29, 2018.
• Failure to Optimize the Company's Assets: The intrinsic value of the Company is significantly higher than the stock price reflects. Two years ago, before any pre-sales or revenue, the Company's two commercial projects had three independent valuations ranging from $2 to $3 billion, implying a share price between $15 and $23 per share. Kaisa itself purchased its shares for over $17.00 per share in July 2017. Based on raw land valuations alone, the stock should be trading higher than $20 per share. The Company has not promoted these facts in the market, let alone attempted to realize the value of the Company's assets.
• Dangerous Capital Allocation Strategy: The Company recently announced the purchase of a $101 million residential development in Dongguan City using over 80% of the Company's cash. If the Company continues to recklessly deploy capital while ignoring opportunities to monetize existing assets, the Company's intrinsic value will be in jeopardy.

We remain excited about NTP's long-term value potential; but are concerned that the Company's value could be destroyed by a Kaisa-controlled Board and CEO intent on running the Company as a wholly-owned subsidiary of Kaisa without appropriate checks and balances.  By refreshing the Board with directors who have relevant experience, a sense of urgency and alignment with shareholder interests, we can unlock significant value through renewed corporate governance, effective capital allocation, and monetization of the Company's assets.

SOURCE IsZo Capital