China Everbright Announces 2009 Annual Results
Business Related 25 Mar 2010
| Press Release |
25 March 2010
The Direct Investment Division has established a sophisticated model of operationcomprising three management teams and six investment funds. Seabright China Special Opportunities (I) Limited (“SOFI”) reported significant value growth in its portfolio in 2009, but investments had yet to be disposed given the management’s bullish outlook for further growth. Excluding this factor, the Direct Investment Division’s profit contribution in 2009 should be positive. In addition, during the year, Everbright further expanded the RMB fund business in China. It entered into agreements with the local enterprises of Jiangyin City and Wuxi City in Jiangsu Province and formed two venture capital funds with a capital commitment of RMB 500 million each, focusing on investments in hi-tech industrial projects in the Yangtze River Delta Region.
Management Division reported healthy growth during the year. “EB Golden Sunshine 165”, a Hong Kong equity trading platform tailored for Mainland investors, was launched in August 2009. Its web design and functions are similar to the mainstream online trading platforms in China. In addition to the futures and billion trading systems launched last year, Everbright provided more diversified online trading platform to local and Mainland investors.
About China Everbright Limited
China Everbright Announces 2009 Annual Results
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“““3+2 Macro Asset Management””” strategy shows great progress
With significant growth of asset size
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Performance highlights
• Hong Kong business successfully transited, in which the complementary roles and functions of both investment-based and fee-based business become clearer
• Profit after taxation and minority interest reached record high of HK$4.76 billion
• Shareholders’ equity reached a record high of HK$20.9 billion
• Total number of investment funds increased to 10, fair value of the assets under management amounted to approximately HK$10 billion
• Strong financial position with cash on hand of HK$2.09 billion, debt / equity ratio remained at 1.9%
• Everbright Securities reported rapid growth, generating HK$1.35 billion of profit contribution to the Group
• Board of Directors proposes final dividend of 20 HK cents per share, full-year dividend of 37.5 HK cents per share
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China Everbright Limited (“Everbright” or the “Group”; stock code: 165) today announced its annual results for the year ended 31 December 2009. Everbright’s overall business strategy and various business lines reported significant progress during the year. Shareholder equity reached a record high of HK$20.9 billion, representing a significant increase of 59% against FY2008.
In 2009, the Group reported operating income of HK$580 million, representing a 71% increase over 2008. Profit after taxation and minority interest increased significantly by 371% to HK$4.76 billion. Earnings per share was HK$2.98 (FY2008: HK$0.63), while net asset value per share grew 59% to HK$13.2. Everbright Securities was listed on the Shanghai Stock Exchange at August 2009, and the public offering exercise generated HK$3.17 billion of gains on deemed disposal of interest in associate. The Group maintained a healthy financial position during the year. As of 31 December 2009, its net cash on hand amounted to HK$2.09 billion while its debt / equity ratio maintained at 1.9%. The Board of Directors proposes a final dividend of 20 HK cents per share (FY2008: 12 HK cents); together with the interim dividend of 17.5 HK cents per share, the full-year dividend is 37.5 HK cents per share (FY2008: 20 HK cents per share).
China Everbright Group said, “Against the backdrop of challenging economic and financial environments, the Group has successfully mitigated negative impacts and closed FY2009 with record-high shareholder equity. We effectively implemented our ‘3+2 Macro Asset Management’ strategy, which demonstrates our dedication to and capability in risk management and strong growth potential and helped us successfully overcome the market challenge.”
Everbright said, “China Everbright had a number of highlights in 2009. We expedited the development of the ‘3+2 Macro Asset Management’ business structure. We also set up a number of investment funds during the year by leveraging our business platform in Hong Kong and operating network in mainland China, laying solid groundwork for a business model that promises a strong, recurrent source of income. The Direct Investments, Asset Investments and Asset Management divisions continued to drive the Hong Kong business, which grew rapidly and healthily under the ‘3+2 Macro Asset Management’ strategy. In 2009, our investment funds expanded rapidly to 10, with the fair value of assets under management amounted to approximately HK$10 billion. The newly established investment funds will focus on various industries with high growth potential such as infrastructure, real estate, new energy and hi-tech.”
The Direct Investment Division has established a sophisticated model of operationcomprising three management teams and six investment funds. Seabright China Special Opportunities (I) Limited (“SOFI”) reported significant value growth in its portfolio in 2009, but investments had yet to be disposed given the management’s bullish outlook for further growth. Excluding this factor, the Direct Investment Division’s profit contribution in 2009 should be positive. In addition, during the year, Everbright further expanded the RMB fund business in China. It entered into agreements with the local enterprises of Jiangyin City and Wuxi City in Jiangsu Province and formed two venture capital funds with a capital commitment of RMB 500 million each, focusing on investments in hi-tech industrial projects in the Yangtze River Delta Region.
Asset Investment Division, focusing on the investment projects of China’s real estate, infrastructure, resources and energy sectors, completed a successful turnaround during the year. Currently it has three investment funds, and the Everbright ALAM Real Estate Fund has commenced its first tranche of fundraising exercises, receiving capital commitment of over USD 100 million. The Fund has identified projects with good potential. For the infrastructure fund, the Group jointly established the China Infrastructure Fund with Macquarie in August 2009, with a capital commitment of USD 50 million each and a fund size target of USD 1.5 billion. Leveraging Everbright’s business relationship and network as well as its project-sourcing capability in mainland China, together with Macquarie’s management capabilities in infrastructure projects around the world, management believes that the Fund will become a key player in China’s infrastructure development. The Group has established a new energy fund in early 2010 with a fund size target of RMB 3 billion, the first closing of RMB 1 billion has been completed.
The Asset Management Division has a successful turnaround in 2009 with a continuous focus on the development of investment funds in the secondary market and related fund management. During the year, the Dragon Fund adopted a less ambitious investment approach to reduce investment risk, holding over 50% of the investment portfolio in cash. The Fund’s return remained breakeven.
The Investment Banking Division sponsored the main-board listings of Strong Petrochemical and Qinfa Group on the Hong Kong Stock Exchange in 2009. It also took part in the underwriting and placing of 21 corporate exercises, while also acting as the financial advisor in 13 projects. During the year, the Group also restructured its institutional sales team and expedited the development of its sales network for institutional clients.
As market sentiment subsequently improved, trading volume and interest-bearing income from IPOs and margin financing gradually picked up. Hence, the Group’s Brokerage and Wealth
Management Division reported healthy growth during the year. “EB Golden Sunshine 165”, a Hong Kong equity trading platform tailored for Mainland investors, was launched in August 2009. Its web design and functions are similar to the mainstream online trading platforms in China. In addition to the futures and billion trading systems launched last year, Everbright provided more diversified online trading platform to local and Mainland investors.
Benefiting from the thriving development of the China securities market during the year, Everbright Securities, a 33.33% associate of the Group, reported excellent results. Profit after taxation amounted to RMB 3.26 billion, and Group’s share of associate’s profits amounted to HK$1.35 billion, in accordance with Hong Kong Financial Reporting Standards. In 2009, its brokerage business and asset management business sustained healthy momentum. The launch of the collective asset management product “Everbright Sunshine 3” further strengthened its leadership position in the industry. As of 31 December 2009, Everbright Securities had 93 sales offices and 4 securities services offices across the territory.
During the year, Everbright Bank reported positive momentum in all of its business segments and ongoing improvements in its asset quality. Based on the unaudited accounts prepared under PRC accounting standards, Everbright Bank’s total assets as of 31 December 2009 grew 40% to RMB 1,200 billion, while profit after taxation at RMB 7.6 billion. In order to enhance its capital resources, Everbright Bank introduced eight domestic enterprises as strategic investors and raised over RMB 11 billion. As such, the Group’s shareholding was diluted to 5.26%.
Abundant opportunities are coming our way given the enormous potential and wealth accumulation of the Chinese market, as well as an increasing number of domestic institutions and individuals that are expanding their overseas investments. In 2010, we will generate promising rewards for our fund investors and shareholders on the solid foundation of our Direct Investments, Asset Investments and Asset Management businesses.
“We will also expedite resource integration between our Mainland and Hong Kong operations, as well as collaboration between Everbright Securities, Everbright Bank and other China Everbright Group business units. This will help us identify suitable acquisition targets in China and expand the scope of our RMB asset management business to complement our Hong Kong business, while strengthening the development of Everbright’s fee-based business (Investment Banking and Brokerage & Wealth Management Divisions), which is striving for larger market share as it prepares itself for the increasing outflow of domestic funds into international investments.”
About China Everbright Limited
China Everbright Limited (“Everbright”), 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 pursues 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 past decade, Everbright has developed solid market bases in various sectors and provided diversified services for its clients. The company has set up several securities brokerage and wealth management branches in Hong Kong, as well as subsidiaries in various cities in China. Everbright is the second-largest shareholder of the Mainland-based Everbright Securities Co., Ltd. and the third-largestshareholder of China Everbright Bank.
By leveraging the substantial financial strength of the company itself, and the position and influence of its parent company and affiliated companies in the financial industry in China, Everbright has weaved considerable social and business networks in Hong Kong and the Mainland.
Following its service philosophy of “Making Wealth Simple”, the company endeavours to provide convenient, professional and practical solutions in the spirit of being “customer-friendly”, “agile” and “pragmatic”, to help clients create wealth and value with ease.
Everbright website: www.everbright.com
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For enquiries, please contact:
GolinHarris
Gloria Chiu Madison Wai
Tel: (852) 2501 7970 Tel: (852) 2501 7903 / 9306 1632
Fax: (852) 2810 4780 Fax: (852) 2810 4780
The announcement of the annual results ended 31 December 2009 is available on the official website of
the Company (www.everbright.com) for reference
