Everbright Announces FY2010 Annual Results
Business Related 29 Mar 2011
| Press Release |
29 March 2011
Everbright Announces FY2010 Annual Results
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Hong Kong Operatioins Profit Surges 361% and Becomes Major Growth Driver
“3+2 Macro Asset Management” Strategy Delivers Solid Results
Performance Highlights
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Excluding one-off book profit from the listing of Everbright Securities in 2009, profit after taxation amounted to HK$1.93 billion, up 22%; earnings per share at HK$1.19, up 20%
Hong Kong Operations become major growth driver, profit before taxation surged by 361% to HK$1.47 billion
Equity to shareholders increased 34% to HK$28.1 billion
Investment funds increased to 11, raising HK$10.5 billion whilst the investment fair value amounted to HK$13 billion
Raised HK$2.28 billion via share placement
The Board of Directors declared a final dividend of 30 HK cents per share, making the full year dividend to 43 HK cents, up 15%
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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 2010. The performance reported during the period was supported by strong results from Hong Kong Operations, leading to a profit after taxation surged significantly by 22% to HK$1.93 billion. The investment projects reported significant increase in value, the listing of Everbright Bank and the share placement caused shareholders equity to rise significantly by 34% to HK$28.1 billion, marking its third consecutive year of growth.
As of 31 December 2010, after deduction of the one-off book profit of HK$3.18 billion from the listing of Everbright Securities, profit after taxation rose 22% compared to the same period last year, whilst earnings per share rose 20% to HK$1.19 (FY2009: HK$0.99). Net assets per share rose significantly by 24% to HK$16.3. The Board of Directors declared a final dividend of 30 HK cents per share (FY2009: 20 HK cents), adding the interim dividend of 13 HK cents per share, the full-year dividend is 43 HK cents per share (FY2009: 37.5 HK cents), up 15%.
During the period under review, the Group issued new shares at HK$18 per share, generating proceeds of approximately HK$2.28 billion. As of 31 December 2010, the Group maintained a strong financial position, with cash on hand of HK$4.9 billion and very low level of gearing ratio of 3.9%, calculated as interest-bearing liabilities divided by shareholders’ equity. The Group announced the sale and purchase of a 51% stake in fee-based operations with Everbright Securities so as to set up a larger platform for the cross-border fee-based operations in cooperation with Everbright Securities. The deal will provide the opportunity for the Group to make use of Everybright Securities’ extensive client resources and sales network in the Mainland and will lay a solid foundation for facilitating clients to participate in stock trading in Hong Kong and overseas investments.
Everbright said, “We adhered to our ‘3+2 Macro Asset Management’ strategy so as to create an international asset management platform that connects the demand of domestic and overseas clients, assists overseas clients in identifying and participating in China’s high potential of growth and provides services to domestic clients who invest overseas. Our range of fund products, funds under management and investment projects have developed substantially compared to the prior year.”
The Direct Investment Division reported HK$1.33 billion in pre-tax profit during the year, representing a substantial increase of 12,265% compared with last year. During the year, the number of direct investment projects increased by 10 to a total of 22. The Group has four overseas USD-denominated private equity funds and three RMB-denominated venture capital funds. With the increasing fund scale and strong exit pipeline, the Direct Investment Division has become the Group’s major profit driver. In 2010, the Group established CSOF III, raising USD400 million; the Fund plans to invest in China’s agriculture, consumer, service industry and financial services.The Asset Investment Division reported pre-tax profit of HK$3.8 million in FY2010, a 304% increase compared with the same period last year. The Division is in its preliminary stage, focusing on China’s real estate, infrastructure, energy and energy-related industries. During the year, the Division’s real estate fund signed a UK-based asset management company, Ashmore, as a strategic investor. The Fund had completed its second-tranche overseas fund raising, managed a size of AUM in excess of USD300 million. In terms of new energy sector, the New Energy (low carbon) Asset Investment Fund completed its first tranche of fund raising exercises, raising RMB1 billion. The Everbright Macquarie Infrastructure Fund had made solid progress through its first tranche of fund rising exercise, receiving an overwhelming response from leading overseas financial institutions. It is currently looking at potential investment projects, focusing on toll roads and airports.
The Asset Management Division reported a pre-tax profit of HK$81.8 million during the year, representing a 58% increase compared with the same period last year. The hedging fund, Dragon Fund, reported a return of 0.9% for the period, while its “Equity Advantage Fund”, which was launched in the second half of 2010, reported an annualised return of 7.6%.
Brokerage and Wealth Management Division reported a pre-tax profit of HK$104 million, representing a year-on-year increase of 28%. On the back of low interest rates and continuous capital inflows, the Group intensified its marketing efforts and expanded diversified business in securities, gold, futures and foreign exchange etc., achieving a steady growth in commission income. In addition, the Division saw an increase in market demand and a recovery of interest income generated from IPO activities from clients compared with the same period last year and the rate of bad debt remained extremely low on the back of continuous recovery of the overall economy and improving market sentiment. During the year, the Group set up a third branch at Mongkok for securities agency and wealth management.
The Investment Banking Division reported a substantial growth of pre-tax profit at HK$56.1 million, up 126% compared with the same period last year. Entering a period of rapid growth, the Group sponsored four IPOs on the Hong Kong Stock Exchange. The listing of China Datang Corporation Renewable Power Co., Limited marked the second successful investment banking cooperation between the Group and Everbright Securities following the IPO of Zijin Mining Group Co., Ltd., showing great room for future cooperation. In addition, China New Economy Fund Limited, sponsored by the Group, was listed on the Hong Kong Stock Exchange after the 2010 reporting period. It was the first investment company listed on the Hong Kong Stock Exchange in compliance with Chapter 21 of the Listing Rules in the past six years. During the period the team expanded its income sources by providing financial advisory services for 14 projects.
Everbright Securities Co., Ltd., in which the Group holds a 33.33% stake, reported after-tax profits of RMB2.22 billion under Hong Kong Financial Reporting Standards, decreased by 33% year-on-year as the commission rates of brokerage businesses in the Mainland were reduced by the tightening of the money supply and intense competition. During the period, Everbright Securities proactively strived to keep its existing market shares in traditional businesses such as security brokerage and investment banking. Its brokerage business continues to maintain its position as in the prior year to rank amongst the top 10 in the industry. Its asset management scale and investment results was top 3 in the market. During the period, Everbright Securities was also one of the domestic securities firms approved by the China Securities Regulatory Commission (“CSRC”) to pioneer the operation of margin financing, stock borrowing and stock index futures. Everbright Securities once again received the highest ranking in the classification of Mainland securities firms conducted by the CSRC as a Category A – AA securities house. As at 31 December 2010, Everbright Securities had 107 sales offices nationwide.
Everbright Bank realized its plan to float its A-shares on the Shanghai Stock Exchange. Everbright’s shareholding in Everbright Bank was diluted from 5.26% to 4.51% pursuant to its IPO exercise. Everbright Bank reported positive development in all its businesses during the year with continuous improvements in asset quality. Based on the unaudited accounts prepared under PRC accounting standards, Everbright Bank’s profits for the year amounted to RMB12.67 billion, a growth of 66% compared to the same period last year. Total deposits and loan balance, as of 31 December 2010, amounted to RMB1,070.9 billion and RMB779.9 billion respectively, representing a respective growth of 33% and 20% compared with the beginning of the year. Non-performing loan ratio stood at 0.75%, 0.5 percentage points lower compared with the beginning of the year. As at 31 December 2010, Everbright Bank had 605 branches and sub-branches nationwide. Everbright Bank has appointed sponsors planning for a H-Share listing exercise in Hong Kong.
Outlook
Looking ahead, China Everbright is committed to enhancing Hong Kong Operations’ profitability by further expanding the business platform of its secondary market-focus hedge fund and Equity Advantage Fund, bringing all of them together with the private equity funds, venture capital funds and asset investment funds to make up the Group’s core businesses. In terms of fee-based operations, upon the completion of the transaction with Everbright Securities, the trading platform of the securities business will be significantly enhanced, whilst investment banking business will see more business opportunities. The Fund Management-based and Fee-based operations under the “3+2 Macro Asset Management” platform are expected to jointly generate more solid and sustainable profits. At the same time, the Group will adopt an “investment + financing” approach for projects with high potential but which are unsuitable for investment with existing funds. The Group will fully utilize its own sufficient capital to expand its revenue source.
“Given our profound understanding of market knowledge and our extensive network in China, we are well-positioned to explore investment opportunities with long-term growth potential for domestic and overseas investors. While riding on the opportunities, we are committed to establishing a balanced business model. The Group is currently in its prime time since our establishment more than a decade ago. We are fully confident of our future development.”
The announcement of the annual results ended 31 December 2010 is available on the official website of the Company (www.everbright.com) for reference.
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