everbright announces fy2012 annual results | china everbright limited-九游会登录

26 march 2013

everbright announces fy2012 annual results
* * *
improved cross-border asset management platform enhances profitability
of hong kong business

performance highlights
 

china everbright limited (“everbright” or “the group”, hkse code: 00165.hk) today announced its annualresults for the year ended 31 december 2012.

the group reported that operating income rose 24% to hk$840 million. profit from the hong kongoperations surged 57% to hk$1.41 billion, while the group’s profit attributable to equity shareholdersdropped 18% to hk$1.14 billion, after the deduction of a disposal gain of 51% of everbright securitiesinternational in the previous fiscal year. earnings per share declined 41% to hk$0.663 (2011: hk$1.116).the board of directors has recommended a final dividend of 15 hk cents (2011: 30 hk cents) per share,added to the interim dividend of 11 hk cents per share, the full-year dividend is 26 hk cents per share(2011: 45 hk cents), representing a decrease of 42%.

the group’s funds reported stable growth in fair value for all their investment projects, resulting in a 6.2% growth in equity to shareholders at hk$28.1 billion. cash on hand amounted to hk$2.66 billion, whileinterest-bearing gearing ratio remained very low at 3.6%. this healthy financial position providesfavourable conditions for the group to expand its scale of operations through mergers and acquisitions.

everbright said, “to accommodate ourbusiness development needs, we made structural adjustments to our business platform during the year.the direct investment, asset investment and asset management divisions were restructured into threekey segments, namely primary market investment, secondary market investment, and structuredfinancing & investment. they have now become the core business operations of the group. we alsoreorganised our investment banking and brokerage and wealth management divisions (everbrightsecurities (international)) in hong kong and placed them under the management of everbright securities.these changes have created a more streamlined structure for the group and allowed us to optimiseresource allocation and strengths of each business segment to facilitate healthy long-term growth.”

as at the end of 2012, everbright’s cross-border macro asset management platform managed a total of 14funds, with total fund raised to hk$23 billion. the outstanding balance not yet utilised, together with theaggregate fair value of projects invested, amounted to approximately hk$23.9 billion, representing anincrease of 37% and 35% respectively compared to last year.

the primary market investment segment of the cross-border macro asset management platform consistsof three private equity funds, three venture capital funds, and four sector focus funds under the chinaspecial opportunities fund series, covering infrastructure, real estate, low-carbon new energy and newmaterials, as well as medical and healthcare sectors. primary market investment focuses on identifyinginvestment opportunities from unlisted companies in china, making it one of the most competitivebusiness segments within the group. in 2012 the primary market investment business continued toexpand, achieving a gradual increase in income from management fees. last year, its fundraising scale had risen by hk$3.6 billion to hk$20 billion, and 59% of total proceeds were already invested. theunderperformance of china’s stock markets and a slowdown in the approval of companies for listingmeant that fewer projects were divested last year, leading to a decrease of 59% in earnings before tax tohk$290 million.

the medical and healthcare fund is a newly established fund in the group’s business portfolio. run by aprofessional team with solid experience in the international investment market and the pharmaceuticalindustry, the fund focuses on enterprises in china’s medical and wellness market that are growing but notyet listed. the scope of investments encompasses biopharmaceuticals, medical devices and equipment,medical services and medical it.

the secondary market investment business focuses on investment opportunities in listed companies.during 2012, the secondary market investment business underwent a comprehensive restructuring. the“dragon fund” was discontinued and the operation was divided into two segments: traditional assetmanagement focused primarily on fixed income products, and worldwide hedging products. bothreported significant progress during the year. the fixed-income products investment team raised rmb1billion in november 2012, taking bond positions in several sectors including real estate, raw materials,transportation and consumables. the group also established the everbright dynamic bond fund in hongkong, raising a total of us$30 million to further enhance the fund’s portfolio of fixed income products. forglobal hedging products, everbright launched two hedge funds in july 2012. these two funds achievedpositive returns during the year under review, and the annualised rate of return was approximately 12%,creating excellent conditions for raising funds from external parties in the future. in 2012 the grouprecorded a profit of hk$10.5 million from the secondary market investment business.

the structured financing & investment business utilises everbright’s abundant financial resources andextensive business channels in the primary and secondary markets to exploit mid- to short-term“financing investment” opportunities. this business model allows everbright to enjoy capitalappreciation from both long-term development and the listing of the enterprises in which it invests. thegroup supports the development of these enterprises through appropriate and prudent leverage, whichin turn generates interest income for the group.

at the end of 2012 the business had nine projects, three of which had matured during the year, recoveringthe principal together with interest. in 2012, the business recorded hk$220 million in interest income,hk$540 million in investment income and a profit before taxation hk$710 million, making it an importantprofit driver for the group. the group successfully established a domestic mezzanine fund in september2012, with the first tranche of fundraising generating rmb800 million. it has already invested in a fixedincome debenture project. the group is also actively preparing the establishment of a usd-denominatedmezzanine fund to diversify investment risks and enhance the portfolio of asset management productsoffered by everbright.

the group reported that china aircraft leasing company limited, acquired in 2011, performed wellduring the year and sustained rapid growth. as at the end of 2012, the number of aircraft in operationincreased to 16. to improve its capital strength, everbright introduced china aerospace investmentholdings limited, part of china aerospace science and technology corporation, as a strategic investorholding an approximate 8% interest. correspondingly, the group’s holding decreased to approximately44%. in 2012 the aircraft leasing business contributed approximately hk$40 million in profit to the group.

everbright securities, in which the group has 33.33% interest, was affected by the drop in transactionvolumes resulting from the weakening mainland stock market in2012. as a result, everbright has to makea provision of hk$260 million for the reduction in value of part of the investments it held, leading to asubstantial drop of profit contribution by everbright securities by 76% to hk$150 million. everbright bank,in which everbright holds 4.51%, contributed a dividend income of hk$296 million to everbright in 2012.

outlook
the group said it believes china’s sustainable development as well as the reform and opening of china’sfinancial industry, provide unprecedented opportunities for everbright and its unique macro assetmanagement platform.

everbright said, “after five years of transition, everbright’s macro asset managementplatform is now well established . our asset management products range from private equity funds,venture capital funds and sector focus funds to structural investment and financing products, mezzaninefunds, hedge funds and bond investment funds. these products are primarily targeted at corporate clientsand high-net worth personal clients. our understanding of clients’ experience and long-term investmentphilosophy provides favourable conditions for us to achieve higher returns.”

– ends –

the announcement of the annual results ended 31 december 2012 is available on the official website ofthe company (九游会登录-九游会登陆) for reference.


about china everbright limited
china everbright limited (“everbright”, stock code: 165), being a member of china everbright group, is a diversifiedfinancial services enterprise operating in hong kong and mainland china. it is the second largest shareholder ofeverbright securities (stock code: 601788) and third largest shareholder of everbright bank (stock code: 601818) inthe mainland. china everbright group is the holding company of everbright.

established in 1997, everbright leverages a “3 2 macro asset management” strategy, focusing on the developmentof three fund management and investment businesses – primary market investment, secondary market investmentand structured financing & investment – while continuing to capitalize on everbright securities’ advantageousposition in its two cross-border fee-based businesses of investment banking (corporate financing) and brokerageservices (wealth management). moreover, as a major shareholder of china aircraft leasing company limited,everbright proactively develops its aircraft leasing business in china and emerging markets.

over the past 15 years, everbright has developed solid market bases in a number of sectors. through private equityfunds, venture capital funds, industrial investment funds and hedge funds from our global fund managementplatform, we explore and nurture investment opportunities with overseas investors in companies that have potentialfor fast growth on the mainland. we also explore investment opportunities overseas for mainland investors andprovide them with diversified financial services.

everbright strives to realize its service philosophy of “making wealth simple”. by leveraging the substantial financialstrength of the company itself, and the position and influence of china everbright group and affiliated companies inthe financial industry in china, everbright has woven huge cross-border social and business networks in hong kongand the mainland.

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