Everbright Announces FY2011 Annual Results
Business Related 22 Mar 2012
| Press Release |
22 March 2012
Everbright Announces FY2011 Annual Results
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Hong Kong operations remain major profit contributor with HK$1.41 billion for 2011
Group continues to adhere to “3+2 Macro Asset Management” strategy
Performance Highlights
About China Everbright Limited
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China Everbright Limited (“Everbright” or “the Group”, HKSE code: 00165.HK) today announced its annual results for the year ended 31 December 2011.
The Group’s operating income surged by 82% to HK$680 million. Profits of the Hong Kong operations increased 5% to HK$1.41 billion, while the Group’s profit after tax at HK$1.92 billion, maintaining a similar level as last year. Earnings per share slipped 6.1% to HK$1.12 (2010: HK$1.19). The Board of Directors recommended a final dividend of 30 HK cents per share (2010: 30 HK cents); added to the interim dividend of 15 HK cents per share, the full-year dividend is 45 HK cents per share (2010: 43 HK cents), up 5%. Impacted by the drop in market prices of its investment projects, shareholder equities dropped 6% to HK$26.5 billion. Net asset value per share at HK$15.36.
As of 31 December 2011, the Group maintained a strong financial position, with cash on hand of HK$4.25 billion and a very low level of gearing ratio of 5.8%.
Everbright said, “Our range of fund products, funds under management and investment projects have developed substantially compared to the prior year. In 2011, we had a total of 12 investment funds in our management portfolio. The total funds raised by these funds reached approximately HK$16.8 billion. Investment projects increased by 13 to a total of 36, of which six have listed in different markets. The addition of fund products not only offered clients more options and flexibility in asset allocations, but also effectively enhanced the stability of our profits by allowing us to build a healthy investment pipeline and divestment cycle.”
The Direct Investment Division, which aims to identify unlisted companies in the Mainland with high growth potential, reported HK$700 million in pre-tax profit, representing a decrease of 48% compared with the last fiscal year. In 2011 the Group had eight new investments, while unrealised projects in the portfolio increased to 30. Everbright’s Direct Investment Division runs four offshore private equity funds and three RMB-denominated venture capital funds. This business platform has become mature with a healthy investment cycle and it continued to become a major source of income to the Group. The USD 400 million “China Special Opportunities Fund III” has reviewed over 200 potential projects, and it invested in four, including China Apparel and Beijing Jingneng Clean Energy, which were listed on the Hong Kong Stock Exchange in late 2011.
The Asset Investment Division explored and identified growth sectors with mid-long term growth potential in China. This division is still in the investment stage. It reported pre-tax profit of HK$2.08 million in FY2011, a 45% decrease compared to last fiscal year. The Everbright Macquarie Infrastructure Fund raised USD479 million while receiving an additional USD250 million co-investment commitment from an investor amidst the weakening market. The Fund’s capital pool was close to USD800 million. During the year, the Asset Investment Division added five investment projects, bringing the total number to six.
The Asset Management Division reported a loss of HK$275 million during the year. This division focuses on investments in secondary markets, with the aim of offering clients more options for flexible asset allocation in addition to direct investments and asset investments in the primary market.
Everbright established the capital investment and financing unit during the year, officially commencing its “Structured Investment & Financing” business. Leveraging the Group’s capital-rich position and the demand for short- to medium-term financing under China’s relatively tight monetary policies, Everbright increased the “investment + financing” quota for projects that have high potential but are not directly suitable for investment by existing funds. In 2011 the Division reported outstanding results at a pre-tax profit of HK$370 million, making it a new growth spot for the Hong Kong operations. Considering the favourable outlook for this business in China, Everbright is currently arranging the initiation of a RMB-denominated Mezzanine fund with structured investment and financing features, aiming to further expand the Group’s range of products and size of assets under management.
Everbright completed the transfer of 51% shares of its Hong Kong-based investment banking, brokerage and wealth management businesses (renamed “Everbright Securities (International)”) to associate Everbright Securities in May 2011. Both Everbright and Everbright Securities were benefited from this business integration as they could further reallocate their resources and expand their businesses more efficiently. Impact by the tightening liquidity in China on the Hong Kong stock market and the ongoing Eurozone debt crisis, the performance and revenue of the brokerage and wealth management businesses of Everbright Securities (International) was affected.
Everbright’s share of profits at associate Everbright Securities (33.33% shareholding) was HK$640 million, which represented a decrease of 24% year-on-year. As of 31 December 2011, Everbright Securities had 117 sales offices nationwide. Everbright Bank, at which Everbright holds 4.51%, reported a pre-tax profit of RMB 24.2 billion, representing a huge increase of 41%. Everbright Bank embarked on preparations for the issuance of H-shares in Hong. The proposed issuance has obtained all necessary approvals from the relevant authorities, and the listing will be completed when market conditions permit. As of 31 December 2011, Everbright Bank had 689 branches nationwide.
Outlook
Looking ahead, Everbright said it will maintain its strategy of “progressing with prudence” in 2012 while remaining committed to developing its “Macro Asset Management” business. The Group will also further optimize and expand its primary and secondary market funds as well as the structured investment and financing business, with the aim of achieving stable profit growth.
“We will make appropriate adjustments to the ‘3+2’ structure in 2012 while maintaining our macro asset management strategy. The direct investment, asset investment and asset management divisions represented by the ‘3’ will be realigned into primary market investment, secondary market investment, and structured investment and financing business, while the fee-based operations represented as ‘2’ will remain unchanged and continue to capitalise on Everbright Securities’ advantageous position in the cross-border fee-based business. We believe that the fine-tuning of our business model and management structure will provide a clearer development focus and allow more effective allocation of resources and management efficiency. At the same time, our solid financial positions will provide us excellent conditions for potential acquisition and expansion opportunities.”
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The announcement of the annual results ended 31 December 2011 is available on the official websiteof the Company (www.everbright.com) for reference.
About China Everbright Limited
China Everbright Limited (“Everbright”, stock code: 165), with China Everbright Group as its parent company, is a diversified financial conglomerate operating in both Hong Kong and mainland China.
Established in 1997, Everbright is committed to a “3+2 Macro Asset Management” strategy, focusing on direct investment, asset management and asset investment whilst developing fee-based businesses including investment banking (corporate financing) and brokerage services (wealth management). Over the course of a decade, Everbright has developed solid market bases in various sectors and provided diversified services for its clients. The company has set up a securities brokerage and wealth management branches in Admiralty, North Point, Hung Hom and Mongkok in Hong Kong, and subsidiaries in many provinces and cities of China. Everbright is the second-largest shareholder of the Mainland-based Everbright Securities Co., Ltd. and the third-largest shareholder of China Everbright Bank.
By leveraging the substantial financial strength of the company itself, and with the position and influence of its parent company and affiliated companies in the financial industry in China, Everbright has weaved huge social and business networks in Hong Kong and the Mainland.
Everbright website:
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GolinHarris
Gloria Chiu Madison Wai
Tel: (852) 2501 7970 Tel: (852) 2501 7903 / 9306 1632
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