Profit attributable to equity shareholders increases by 180% to HK$3.226 billion;Completes business structure optimisation to further enhance growth potential
HONG KONG, Aug 27, 2015 - (ACN Newswire) - China Everbright Limited ("Everbright", stock code: 165.HK) today announced its interim results for the six months ended 30 June 2015.
During the reporting period, Everbright conducted a thorough review and optimisation of its business development strategy and systems, dividing its Hong Kong business into the fund management business and the principal investment business. Everbright also enhanced its management structure across the board to lay down a clearer framework that will further promote business growth.
For the first half of 2015, Everbright posted an operating income of HK$1.171 billion, which was 51% higher compared to the same period of last year. Profit attributable to equity shareholders was HK$3.226 billion, representing an increase of 180%; Earnings per share were HK$1.914, up 181%; After-tax profit from the Hong Kong business grew 110% to HK$776 million, compared to the same period of last year; The fund management business posted a pre-tax profit of HK$1.03 billion, up 78.8%; The principal investment business generated pre-tax profit of HK$577 million, up 377% compared to the same period of last year; Everbright's share of Everbright Securities' profit contribution amounted to HK$2.033 billion, representing an increase of 1,147%; China Everbright Bank contributed a dividend income after tax of HK$329 million, up 4%; Total equity attributable to the equity shareholders of Everbright amounted to HK$40.4 billion, representing an increase of 15% compared to end of 2014.
The Board of Directors has resolved to declare an interim dividend of HK$0.25 per share for the six months ended 30 June 2015 (1H 2014: HK$0.15 per share), up 67% from the same period of last year.
Business Review
Fund Management Business
Everbright's fund management business includes Primary market funds, Secondary market funds, Mezzanine funds and Everbright Prestige Capital Asset Management Company ("Everbright Prestige"), providing investors from Asia-Pacific, Europe and the US with a diversified range of services.
As of 30 June 2015, Everbright's fund management business managed 30 funds (excluding non-actively managed funds raised through different channels for other external institutions). It had a total of 71 post-investment projects, 16 of which were listed in different stock markets around the world. Everbright's total fundraising scale rose to HK$51.7 billion, an increase of 2.8% from 31 December 2014.
In recent years, Everbright's fund management business has expanded overseas from mainland China; in terms of asset chain, it has grown from traditional equity investment to include sector funds such as professional healthcare and real estate, which are industries that require a thorough understanding of the sector, thereby providing more established products.
During the reporting period, income from the fund management business was HK$1.13 billion, representing an increase of 30%. The fund management business realised a pre-tax profit of HK$1.03 billion, representing an increase of 78.8%. Income from fund management and performance fees accounted for HK$92 million, representing an increase of 210% compared with the same period of last year. Investment projects were exited on a selective basis when market conditions were favourable during the first half of 2015, recording a capital gain of HK$1.03 billion, up HK$1.02 billion compared to the same period of last year.
In the list compiled by China's Zero2IPO Research in June 2015, Everbright, on the strength of its fund management business' strong performance in the first half of 2015, ranked fifth among "China's Institutional Limited Partners Top 10" in 2014, after major state-owned financial institutions such as the National Council for Social Security Fund and PICC Property and Casualty Company Limited. Everbright's EBA Investments, a Primary Market sector focus fund, ranked first in the "2015 Top 10 Funds in Terms of Comprehensive Strength Among the China Real Estate Funds".
Principal Investment Business
In addition to devoting efforts to external fundraising, Everbright also optimised the use of its own capital through various investment methods, using equity, bonds and derivatives, in support of its fund investment and management business. The principal investment business remains a key driver of the Everbright's growth across various business lines.
During the reporting period, Everbright's principal investment business managed HK$12.8 billion. Compared to the same period of last year, it achieved a pre-tax profit of HK$577 million, up 377%; Interest income amounted to HK$254 million, up 67.8%; Dividend income amounted to HK$77 million, up HK$76 million; Capital gain realised was HK$205 million, up 93.8%.
Everbright's principal investment business is committed to the following philosophy: (1) Everbright's own capital is used to support investment teams at the growth stage and to incubate quality private equity products, followed by external fundraising after the investment teams had fully developed; (2) Everbright strives to create positive synergies between its fund management and capital operations, directly investing or co-investing in projects with a competitive edge in their industry; (3) Through reasonable equity investments, Everbright aims to participate in and nurture financial institutions that have the potential for long-term development, and which provide Everbright with good return on investment as well as business synergy. Everbright seeks to consolidate and improve its operational capabilities so as to raise its overall income level; (4) Everbright aims to enhance its capital efficiency and improve cash flow through a treasury or wealth management model.
Everbright has completed a series of investments using its own capital, including a co-investment in Jiangsu Yuyue Medical Equipment & Supply Co., Ltd with Sequoia Capital and Highlight Capital (managed by the Medical and Healthcare Fund management team), equity participation in the Singapore-listed Chinese real estate developer Ying Li International Real Estate Limited (managed by the Real Estate Fund management team), and the acquisition of the majority shares of a US automotive testing systems company Burke E. Porter Machinery Company (BEP) (managed by the M&A Fund management team), and an investment in Focus Media Holding Limited (managed by the Mezzanine Funds management team).
China Aircraft Leasing Group Holdings Limited (CALGH), an investment of Everbright's own capital with a 35.6% stake, continued to grow. During the reporting period, based on the method of equity accounting, Everbright's share of CALGH's after-tax profit amounted to HK$40 million, representing an increase of 8.1% compared to the same period of last year. CALGH delivered six airplanes in the first half of 2015, bringing its fleet size to 50 airplanes. It also successfully expanded into the international market by entering into agreements with new clients such as Air Macau and Pegasus Airlines, after Air India. At the same time, CALGH concluded a memorandum on strengthening cooperation with the Administration Committee of Tianjin Dongjiang Free Trade Port Zone, which is expected to lead to the delivery of 40 airplanes over the next four years.
Strategy and Outlook
The global economy is expected to continue to face imbalance in the second half of 2015. As for the Chinese economy, investment stability is a critical factor in determining whether economic growth can experience a meaningful rebound in the second half. Based on the current situation, the liquidity generated by a monetary easing policy has stayed in the financial market, with limited effect in terms of driving the real economy.
Operating within such a complex macro environment, Everbright will continue to develop its cross-border asset management operations with its abundant capital. Primary Market Funds, Secondary Market Funds and Mezzanine Funds will continue to raise capital for new funds and attract more investors from new sectors. Investment in the Secondary Market business will continue to promote a greater variety of investment portfolios. Some listed shares with fair valuation will be disposed of when the right opportunities arise, in order to realise good, sustainable investment returns. Everbright will also optimise the development of a unified platform for fundraising, customer relations and integrated management.
Chen Shuang, Executive Director and Chief Executive Officer of Everbright, said, "We conducted a thorough optimisation of our business development strategy and systems, laying a clearer management framework and a more solid foundation for our future development. As the company's operations across all segments become more established, Everbright is expected to continue posting excellent returns. Despite the continued complexity of the macro-economic environment, we are very confident in our growth prospects for the second half of 2015."
The announcement of the interim results ended 30 June 2015 is available on the official website of the Company ( www.everbright165.com ) for reference.
About China Everbright Limited
China Everbright Limited ("Everbright", stock code: 165.HK) has woven huge cross-border social and business networks in Hong Kong and the Mainland. China Everbright Limited, being a member of China Everbright Group, is a diversified financial services enterprise operating in Hong Kong and Mainland China. It is the second largest shareholder of Everbright Securities (stock code: 601788.SH) and third largest shareholder of China Everbright Bank (stock code: 601818.SH, 6818.HK) in the Mainland. China Everbright Group is the holding company of Everbright.
Established in 1997 at Hong Kong, Everbright persistently pursues its "Macro Asset Management" strategy, with specific focuses being placed on fund management and investment businesses, namely Primary Market Investment, Secondary Market Investment and Structured Financing and Investment.
Moreover, being a substantial shareholder of China Aircraft Leasing Group Holdings Limited (stock code: 1848.HK), Everbright is actively developing aircraft leasing business in China and emerging markets. In addition, by leveraging the advantages in cross-border fee-based business of an associate, Everbright Securities, Everbright also participates in the development of investment banking (corporate financing) and brokerage services (wealth management) businesses in Hong Kong.
Over the past years, Everbright has developed solid bases in various sector markets. It manages series of private equity funds, venture capital funds, sector focus funds and hedge funds as operated via an international management platform, and provides overseas investors with opportunities to explore and invest in companies with fast growing potential in the Mainland China. On the other hand, Everbright also seeks investment opportunities from overseas and provides diversified financial services for its clients in Mainland China.
Through upholding the philosophy of "Making Wealth Simple", Everbright leverages on its own substantial financial strength, as well as the position and influence of China Everbright Group and its affiliated companies in the financial industry in China, and has successfully built huge cross-border social and business networks in Hong Kong and the Mainland, and established a reputable image in the market.
Source: China Everbright Limited
Contact:
Golin Nan Dong Tel: 2501 7902/ 9733 6558 Fax: 2810 4780 Email: NDong@golin.com Max Lau Tel: 2501 7905 Fax: 2810 4780 Email: MLau@golin.com
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