Cross-border asset management and investment platform makes remarkable progress with total fundraising up 79% to HK$87.5 billion
HONG KONG — China Everbright Limited (“CEL” or “the Group”, 165.HK) today announced its audited annual results for the year ended 31 December 2016.
CEL made substantial progress in 2016 in all areas of its business, primarily by expediting plans to enter new industry sectors, actively promoting overseas investments, and leveraging the strength of its domestic and foreign financing platforms. During the reporting period, CEL posted operating income of HK$2.17 billion, up 2% compared with last year. Other net income, derived mainly from investment returns, increased 546% to HK$5.22 billion.
Operating profit was HK$6.01 billion, an increase of 302% compared with last year. Pre-tax profit from CEL’s core businesses of fund management and investment rose 303% to HK$5.6 billion. However, profit attributable to equity shareholders declined 21% from last year to HK$4.07 billion as the profit contribution from Everbright Securities and after-tax dividend income from China Everbright Bank both fell. Earnings per share was HK$2.42, representing a decrease of 21%.
To focus its resources on developing its core businesses, the Group sold its remaining 49% equity in Everbright Securities (International) Limited to Everbright Securities Financial Holdings Limited for a consideration of HK$930 million on 15 June 2016.
The Board of directors has resolved to declare a final dividend of HK$0.50 per share for the year ended 31 December 2016 (2015: HK$0.50 per share). Together with the interim dividend of HK$0.25 per share, the full-year dividend for 2016 is HK$0.75 per share (2015: HK$0.75 per share), same as the full year dividend of last year.
Business Review
After years of transformative development, CEL’s fundraising scale saw breakthrough growth in 2016. The Group also made significant progress in business diversification, specialisation and product innovation.
Fund Management Business
The fund management business covers Primary Market Funds, Secondary Market Funds, Multi-strategy Alternative Investment Fund (“FoF Fund”) and Everbright Prestige Capital Asset Management Company (“Everbright Prestige”), providing investors from Asia-Pacific, Europe and the US with diversified services.
Significant breakthroughs in fundraising scale – As at the end of 2016, the Group’s fund management business managed a total of 36 funds and held 105 primary market post-investment management projects and 15 secondary market portfolios. Of the primary market projects, 13 have been listed on stock markets around the world. The fund management business’s total fundraising amount increased to HK$87.5 billion, up 79% from the end of 2015. Pre-tax profit for the full year was HK$5.3 billion, up 386% from last year.
Entering new industry sectors – CEL proactively pursued strategic plans for investment in the fintech and TMT sectors by building solid strategic partnerships with well-known fund managers and industry leaders such as IDG and Focus Media and raising more than HK$10 billion.
Strengthening overseas investment and promoting the integration of industry and finance in the mainland – During the period under review, the Group actively promoted overseas investment and financing, setting up Global M&A Fund to raise US$293 million and promoting industrial upgrade in the mainland China. Overseas Infrastructure Fund was put up as a reserved project and completed its acquisition of Tirana International Airport in the Albanian capital.
In addition, the management company for CEL Ashmore Real Estate Fund was successfully incorporated into Mainland-listed enterprise Shanghai Jiabao Group, realising a sizeable profit and achieving quantum development through a capital-raising platform.
Principal Investment Business
As at 31 December 2016, Principal Investment business was valued at HK$12.2 billion and reported a pre-tax profit of HK$300 million for the year, maintaining its performance from 2015.
Nurturing industries with strong long-term growth potential – During the year, CEL completed a number of plans for long-term investment by investing in industry-leading companies such as Haiyin Fund, Beijing Huichen, Hope Education, reflecting stepped-up planning efforts aimed at the internet intelligence, elderly care, education and other sectors with strategic growth potential.
Strong growth in CALC’s profit contribution and business development – China Aircraft Leasing Group Holdings Limited (“CALC”) moved into a period of rapid growth after years of cultivation. In 2016, CEL’s share of profit from CALC reached HK$210 million, representing an increase of more than 50% year on year. Teams from CEL’s various businesses demonstrated positive synergies; for example, the Secondary Market team worked with CALC to complete the design and sale of fixed income products valued at US$500 million, broadening CEL’s product line.
Other Development Highlights
CEL issued RMB panda bonds, totalling RMB8 billion, for the first time in China’s domestic capital market, reflecting the strength of the Group’s platform.
After years of continued operational excellence, the Group has received a number of industry recognitions for its performance in fund management and corporate governance. In 2016, CEL ranked fourth in Zero2IPO’s annual private equity awards and was named “Fundraising Winner of the Year”. CEL also clinched the Corporate Governance Excellence Award, the highest honour of its kind, in the Hong Kong Corporate Governance Excellence Awards organised by the Chamber of Hong Kong Listed Companies. In addition, CEL won Gold Awards in the Governance, Social Responsibility and Investor Relations categories of The Asset Corporate Awards, where Group CEO Mr Chen Shuang was also named “Best CEO – Banking and Finance”. Meanwhile, Everbright China Focus Fund won EurekaHedge’s “Best Asian Long Only Absolute Return Fund” award in 2016, and Everbright Dynamic Bond Fund was nominated by AsiaHedge, a major hedge fund research company, for Asia’s “Best Fixed Income Fund” in 2016.
Strategy and Outlook
Looking ahead in 2017, global economic uncertainties are likely to continue, while anti-globalisation sentiment gains momentum around the world. The risk of an even more imbalanced global monetary system will persist, and China’s economic slowdown is also expected to continue. Amid these challenges, CEL will stay focused on its core businesses while planning and implementing asset allocations in light of the changing market.
CEL will embark on a new round of financing for Mezzanine Fund (USD), Water Fund, Overseas Infrastructure Fund, and Healthcare and Elderly Care Fund. By meeting the demand from major institutions for all-around cross-border asset allocations, CEL will further enhance its ability to offer a full spectrum of fund products covering venture capital, private equity, industry M&A, mezzanine financing and secondary market liquidity.
Mr Chen Shuang, Executive Director and Chief Executive Officer of China Everbright Limited, said, “CEL will continue to leverage the strength of its dual domestic and foreign platforms to consolidate its foundation, and be highly selective with its investment projects. We can help overseas investors ‘bring in’ capital and participate in domestic projects that can create long-term value. We can also help Chinese enterprises ‘go out’ and match China’s market demand with overseas technologies and equipment through a professional approach to capital structuring and investment, so as to build a ‘cross-border asset management and investment platform'”.
The announcement of the annual results for the year ended 31 December 2016 is available on the Company’s official website: www.everbright165.com.
Photo: Senior management of China Everbright Limited announce the Company’s 2016 annual results. From left, Mr Richard Tang, Executive Director & Chief Financial Officer, Mr Chen Shuang, Executive Director & Chief Executive Officer and Mr Frederick Tsang, Chief Risk Officer.