TIDMJADE
RNS Number : 3362A
Jade Road Investments Limited
22 September 2022
22 September 2022
JADE ROAD INVESTMENTS LIMITED
(" Jade Road Investments ", " JADE ", the " Company " or the "
Group ")
INTERIM CONSOLIDATED RESULTS FOR THE SIX MONTHSED 30 JUNE
2022
Jade Road Investments Limited (AIM: JADE), the London quoted
pan-Asian diversified investment vehicle focused on providing
shareholders with attractive uncorrelated, risk-adjusted long-term
returns, is pleased to announce its interim results for the six
months ended 30 June 2022.
Financial Highlights:
-- Total income increased to US$1.56 million from interest
income and profit on partial disposal of one investment (H1 2021:
US$1.24 million).
-- Net profit of US$1.02 million (H1 2021: US$0.27 million loss).
-- Consolidated profit per share (basic) of US$0.88 cents (H1 2021: US$0.24 cents loss).
-- Consolidated NAV at 30 June 2022 increased slightly by 1.5%
to US$69.04 million/GBP 56.83million (31 December 2021: US$68.03
million/GBP 50.33 million).
-- NAV per share at 30 June 2022 US$0.59 (GBP0.49 ) (30 June 2021 US$0.90/GBP0.65).
-- Period end cash position of US$0.44 million (30 June 2021: US$2.56 million).
Investment and Operational Highlights:
-- Future Metal Holdings Limited ( "Future Metal ")
o The Investment Manager and Board of the Company continue to
focus on divestment opportunities for this asset.
o The local management team is actively seeking new sales
channels to enhance the business and also seeking local divestment
opportunities as directed by the Investment Manager.
-- Meize Energy Industries Holdings Limited (" Meize ")
o T he Company partially divested its interest in the period as
it entered into a share sale agreement for 112,500 shares of the
Series B Preferred Equity in Meize for consideration of USD1.2
million, which was settled in three equal tranches.
o The first tranche was received in June 2022 with the remaining
two tranches received by the end of August 2022.
o The Company maintains an interest of 6.3 per cent in this
business.
-- DocDoc Pte Ltd (" DocDoc ")
o The investee company has continued to develop its 'Neo
Insurer' model by building partnerships with insurance companies in
the region. It is also in discussions with various investors
regarding capital raisings to position the business for its future
growth.
Chairman of Jade Road Investments, John Croft, commented:
"The past six months continued to pose a challenging period for
the Chinese economy as it faces the slowest GDP growth forecast in
four decades.
Notwithstanding these difficult times, Jade Road successfully
completed the partial divestment of Meize, demonstrating that the
Company has the in-country resources and expertise to work closely
with portfolio companies to achieve investment returns.
The Board of the Company and the Investment Manager's assessment
is that Asian SMEs continue to provide investment opportunities for
the Company as strong, income-generating assets, at an attractive
entry point for Jade.
The Board is confident that significant opportunities exist for
Jade Road going forward, particularly investment candidates in the
IT, Fintech, Healthcare, and online commerce sectors in Southeast
Asia."
For further information on JADE, please visit the Company's
website at www.jaderoadinvestments.com and follow the Company on
Twitter (@ JadeFinance ).
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jade Road Investments Limited +44 (0) 778 531 5588
John Croft
WH Ireland Limited - Nominated
Adviser +44 (0) 20 7220 1666
James Joyce
Andrew de Andrade
Hybridan LLP - Corporate Broker +44 (0) 203 764 2341
Claire Noyce
Lionsgate Communications - Communications
Adviser +44 (0) 779 189 2509
Jonathan Charles
About Jade Road Investments
Jade Road Investments Limited is quoted on the AIM Market of the
London Stock Exchange and is committed to providing shareholders
with attractive uncorrelated, risk-adjusted long-term returns from
a combination of realising sustainable capital growth and
delivering dividend income.
The Company is focused on providing growth capital and financing
to emerging and established Small and Medium Enterprises (SME)
sector throughout Asia, and is well-diversified by national
geographies, instruments and asset classes. This vital segment of
the economy is underserved by the traditional banking industry for
regulatory and structural reasons.
The Company's investment manager, Harmony Capital, seeks to
capitalise on its team's established investment expertise and broad
networks across Asia. Through rigorous diligence and disciplined
risk management, Harmony Capital is dedicated to delivering
attractive income and capital growth for shareholders with
significant downside protection through selectively investing in
assets and proactively managing them.
Harmony Capital is predominately sourcing private opportunities
and continues to create a strong pipeline of attractive
income-generating assets from potential investments in growth
sectors across Asia, including healthcare, fintech, hospitality, IT
and property.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
Chairman's Statement
The successful partial disposal of Meize Energy Industries
("Meize), a leading privately owned wind turbine blade
manufacturing company in China, at a 22% premium to the carrying
value as at the 31st of December 2021, helped validate Jade Road's
investment strategy during challenging times for the capital
markets.
The past six months continued to pose a challenging period for
the Chinese economy as it faces the slowest GDP growth forecast in
four decades.
Notwithstanding these difficult times, Jade Road successfully
completed the partial divestment of Meize, demonstrating that the
Company has the in-country resources and expertise to work closely
with portfolio companies to achieve investment returns.
Total income increased to USD1.56 million from interest income
and profit, compared to the corresponding period in the previous
year (H1 2021: USD1.24 million).
Net profit increased to USD1.02 million (H1 2021: USD0.27
million loss) while consolidated profit per share (basic) increased
to USD0.88 compared to a loss of USD0.24 (H1 2021).
Investment Portfolio
Jade Road's largest shareholding is an 85% stake in Future Metal
Holdings Limited (FMHL), the largest magnesium dolomite quarry in
Shanxi Province. The gradual removal of travel restrictions in
China is helping FMHL to reach out to new clients with a further
geographical radius for its high-end products. The investment
team's focus is on achieving a partial or complete sale of this
asset and a formal sales process has been initiated with this
objective in mind.
In June 2022, the Company announced the partial divestment via a
share purchase agreement (SPA) for 112,500 shares of the Series B
Preferred Equity in Meize for a consideration of USD1.2 million.
The consideration for the disposal was to be received in three
equal tranches of USD400,000. The first of these tranches was
received in June, the second and third tranche payments of
USD400,000 were received in July and August, thereby completing the
transaction.
The core investment strategy remains to pivot away from China
and focus on the broader Asian SME subsector, which is showing
greater resilience than larger companies in terms of recovery and
build a base of income generating assets that covers overheads,
management fees and finance costs, with a growing surplus to fund
dividends.
The Board is confident that significant opportunities exist for
Jade Road going forward, particularly investment candidates in the
IT, Fintech, Healthcare and online commerce sectors in Southeast
Asia.
A good example is Jade Road's investment in Singapore-based
DocDoc, which continues to develop its Neo Insurer model.
ESG
Environmental, Social and good corporate Governance is integral
to Jade Road's responsible investment approach., which is executed
through its Investment Manager, Harmony Capital.
Post Balance Sheet Events
The partial disposal of the Company's interest in Meize Energy
for $1.2m was announced in June 2022. $800k of the total $1.2m
consideration was received in two tranches in July and August . As
reported, the partial divestment of Meize implies a valuation of
USD10 million and a premium of 22.0% to the carrying value as at
the 31st of December 2021 (USD8.2 million). Following this
transaction, Jade retains a 6.3% stake in Meize.
The Board remains confident in the longer term prospects of this
and its other portfolio investments.
Summary
Whilst China falters, the Asian Development Bank has reported
that "developing Asia's economies are forecast to grow 5.2% this
year and 5.3% in 2023, thanks to a robust recovery in domestic
demand and continued expansion in exports". The Board of the
Company and the Investment Manager's assessment is that Asian SMEs
continue to provide investment opportunities for the Company as
strong, income-generating assets, at an attractive entry point for
Jade. Given the stage of growth of many of these SMEs, the
Investment Manager continues to pursue a strategy of structuring
investments through credit instruments where possible. Coupled with
continued divestments from our Chinese legacy assets, the Company
believes this investment strategy will create a better constructed
portfolio with near-term downside protection.
I would like to take this opportunity to thank the investment
team for the successful completion of the partial divestment in
Meize, proving that with patience and perseverance, deals can still
be done.
I would also like to thank our shareholders for your continued
support, and I look forward to updating you on progress.
* Asian Development Bank, ' Developing Asia Economies Set to
Grow 5.2% this Year Amid Global Uncertainty', 6 April 2022.
The principal assets as of 30 June 2022 are detailed below:
Principal Effective Instrument Valuation Credit Cash Equity Fair Valuation
assets interest type at 31 income receipts investment/ value at 30
% December US$ US$ million other adjustment June
2021 million movement US$ million 2022
US$ US$ million US$
million million
Convertible
FLM Holdings - Bond - 0.7 - - (0.7) -
Future
Metal
Holdings Structured
Limited 84.8 Equity 50.4 0.3 - - - 50.7
Meize Energy Redeemable
Industrial convertible
Holdings preference
Ltd 6.3 shares 8.2 0.3 (1.2) 1.5 8.8
DocDoc Convertible
Pte Ltd - Bond 2.6 - 0.1 - 2.7
Infinity
Capital Secured
Group - Loan Notes 1.4 0.2 - - - 1.5
Infinity
TNP 40 Equity 3.6 - - - - 3.6
Project
Nicklaus 1.8 - - - - 1.8
Loan to
HKMH 3.7 - - - - 3.7
Other
receivables - - - - 0.8 - 0.8
Corporate
debt - (3.6) - - (0.2) - (3.8)
Other
liabilities - (1.0) - - (0.3) - (1.3)
Cash 0.8 - 0.4 (0.8) 0.4
Total N et Asset
Value 68.0 1.5 0.4 (1.6) 0.8 69.0
------------------------- ------------ ---------- --------- ------------ ------------ ------------ ----------
Future Metal Holdings Limited ("FMH")
Our largest asset by value is the dolomite quarry project
("Quarry") in China, Future Metal Holdings Limited ("FMHL"), which
was previously known as Hong Kong Mining Holdings. The Company has
an 85% shareholding in FMHL.
JADE has been exploring the option of a partial or full exit of
this investment by actively engaging with interested parties on the
ground in the Shanxi Province as well as with brokers in Mainland
China, Hong Kong and Singapore.
Including loan disbursements provided by the Company to FMHL and
its subsidiaries and accrued PIK interest, the estimated fair value
of the Company's investment is US$ 50.7 million as of 30 June
2022.
Meize Energy Industries Holdings Limited ("Meize")
Swift Wealth Investments Limited, a 100% (2019: 100%) owned
subsidiary of the Company incorporated in the British Virgin
Islands, held a 7.2% stake in Meize through a redeemable preference
share structure.
Meize is a privately owned company that designs and manufactures
blades for both onshore and offshore wind turbines.
In June 2022, the Company entered into a share purchase
agreement for 112,500 shares of the Series B Preferred Equity in
Meize for consideration of USD1.2 million. The transaction price
implies a valuation of USD10.0 million for the Company's investment
in Meize.
The partial divestment was completed by the end of August 2022.
The Company held approximately 6.3% interest in Meize post this
divestment.
As of 30 June 2022, the Company's interest in Meize had a fair
value of US$ 8.8 million based on an implied valuation following
the divestment of 112,500 shares.
Infinity TNP
The Company maintains a 40% equity stake of Infinity Capital
Group Limited's ("ICG") wholly-owned subsidiary Infinity TNP, which
holds units in a luxury hotel-condominium called Tellus Niseko.
Tellus Niseko is a unique development in Hirafu Village, with
its high-end concierge service, an in-house Michelin star
chef-managed restaurant, in-room onsen (hot spring) baths, and
prime location just minutes away from the Grand Hirafu ski
lifts.
The local team has been closely monitoring the local condition,
the reservation for this winter is available now. The Investment
Manager and Board of the Company is also evaluating its options for
recovering its initial investment with all options under
consideration.
As of 30 June 2022, the carrying value of its investment was US$
3.6 million.
Infinity Capital Group Limited ("ICG")
Ultimate Prosperity Limited, a 100% owned subsidiary of the
Company incorporated in the British Virgin Islands, holds a Secured
Loan to ICG.
ICG develops premium residential projects in Hirafu Village, a
world-class ski village in Niseko, Japan - one of the most popular
winter travel destinations in the world.
As the COVID-19 pandemic continues to impact Japan and the
Hokkaido region, ICG has been working closely with the local
management to monitor the domestic property market and the local
market's response to the pandemic, including construction project
planning and potential movements in property prices.
As of 30 June 2022, the carrying value of the Secured Loan was
US$ 1.5 million taking into account the current face value of the
instrument and cash interest receivable, less an Expected Credit
Loss ("ECL") provision of US$ 38k against aged cash interest
receivables. The Company has decided to escalate its efforts to
ensure an exit from this position including taking legal action
while also pursuing consensual avenues.
DocDoc Pte Ltd. ("DocDoc")
DocDoc is a Singapore-headquartered online network of over
23,000 doctors, 600 clinics, and 100 hospitals serving a wide array
of specialities. It uses artificial intelligence, cutting-edge
clinical informatics, and proprietary data to connect patients to
doctors which fit their needs at an affordable price.
DocDoc pivoted its business model to become a "Neo Insurer" and
attempts to partner with insurance companies to enhance their
policy offerings. DocDoc is working to offer fully-digitised
insurance products to consumers or businesses, exclusively through
digital channels, with end-to-end digital service delivery. These
offerings will include quoting, binding, issuing of policies,
documentation, proof of insurance, electronic billing, payment and
real time policy management all digitally.
As of 30 June 2022, the carrying value of the Convertible Bond
was US$ 2.7 million. An annual coupon of 8% (4.0% cash and 4%
Payment-in-Kind was converted to 8% Payment-in-Kind).
Greater China Credit Fund LP (the "GCCF") & Other
investments
As of 31 December 2021, we have applied a 100% provision against
GCCF. Given there is no GCCF number in this item, we separated the
two primary components namely Project Nicklaus and Loan to
HKMH.
John Croft
Chairman
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Year ended
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
Note US$000 US$000 US$000
Income from unquoted
financial assets 580 575 1,162
Finance income from
loans 679 673 1,347
Gain on disposal 300 - -
Gross portfolio income 4 1,559 1,248 2,509
Fair value changes on
financial assets at
fair value through profit
or (loss) 737 48 (38,893)
Expected credit (loss)
provision 9 (3) - 731
----------- ------------- ------------
Net portfolio income/(loss) 4 2,293 1,296 (35,653)
Management fees 13 (674) (914) (1,861)
Incentive fees - - 424
Administrative expenses (344) (394) (812)
Operating profit/(loss) 1,275 (12) (37,902)
Finance expense (259) (259) (522)
Profit/(Loss) before
taxation 1,016 (271) (38,424)
----------- ------------- ------------
Taxation 5 - - -
Profit/(Loss) and total
comprehensive expense
for the period 1,016 (271) (38,424)
=========== ============= ============
Earnings per share 7
(33.33)
Basic 0.88 cents (0.24)cents cents
=========== ============= ============
(33.33)
Diluted 0.76 cents (0.24)cents cents
=========== ============= ============
The results above relate to continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
Note US$000 US$000 US$000
----------------------------- ----- ----------- ------------ --------------
Assets
Unquoted financial assets
at fair value through
profit or loss 8 67,344 73,991 66,202
Loans and other receivables 9 6,347 34,681 5,556
Cash and cash equivalents 437 2,560 848
Total assets 74,128 111,232 72,606
----------- ------------ --------------
Liabilities
Other payables and accruals 1,257 1,515 1,010
Current liabilities 1,257 1,515 1,010
----------- ------------ --------------
Loans & borrowings 10 3,827 3,536 3,568
----------- ------------ --------------
Total liabilities 5,084 5,051 4,578
----------- ------------ --------------
Net assets 69,044 106,181 68,028
=========== ============ ==============
Equity and reserves
Share capital 11 148,903 148,903 148,903
Treasury share reserve (615) (615) (615)
Share based payment reserve 2,937 2,936 2,936
Accumulated losses (82,181) (45,043) (83,196)
----------- ------------ --------------
Total equity and reserves
attributable to owners
of the parent 69,044 106,181 68,028
=========== ============ ==============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Treasury based
Share share payment Accumulated
capital reserve reserve losses Total
US$000 US$'000 US$000 US$000 US$000
Group balance at 1
January 2021 148,903 (615) 2,936 (44,772) 106,452
Loss for the period - - - (271) (271)
Other comprehensive
income - - - - -
--------- --------- --------- ------------ ---------
Total comprehensive
income for the period - - - (271) (271)
Group balance at 30
June 2021 148,903 (615) 2,936 (45,043) 106,181
--------- --------- --------- ------------ ---------
Loss for the period - - - (38,153) (38,153)
Other comprehensive
income - - - - -
--------- --------- --------- ------------ ---------
Total comprehensive
income for the period - - - (38,153) (38,153)
Group balance at 31
December 2021 and
1 January 2022 148,903 (615) 2,936 (83,196) 68,028
--------- --------- --------- ------------ ---------
Profit/(Loss) and
total comprehensive
expense for the period - - - 1,016 1,016
Total comprehensive
income for the period - - - 1,016 1,016
Group balance at 30
June 2022 148,903 (615) 2,936 (82,180) 69,044
========= ========= ========= ============ =========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Year ended
30-Jun 31 December
30-Jun 2021 2021
2022 Unaudited Audited
Unaudited (Restated) (Restated)
US$'000 US$'000 US$'000
------------------------------------- ----------- ------------ ------------
Cash flow from operating activities
Profit/(Loss) before taxation 1,016 (271) (38,424)
Adjustments for:
Finance income (679) (673) (1,347)
Finance expense 259 259 522
Exchange (gain)/loss 29 (58) 23
Fair value changes on unquoted
financial assets at fair value
through profit or loss (2,043) (566) 7,222
Share-based expenses - -
Fair value changes on loans
and receivables at fair value
through profit or loss 679 - 30,459
Realised (gain) on disposal
of investments (300) - -
Increase in other receivables (21) (16) (295)
Increase/(Decrease) in other
payables and accruals 247 (15) (520)
----------- ------------ ------------
Net cash used in operating
activities (812) (1,340) (2,360)
----------- ------------ ------------
Cash flow from investing activities
Sale proceeds of unquoted financial
assets at fair value through
profit or loss 400 - -
Purchase of unquoted financial
assets at fair value through
profit and loss - -
Net cash generated from investing
activities 400 - -
----------- ------------ ------------
Issue of Shares - - -
Sale of treasury shares - - -
Purchase of treasury shares - - -
Proceeds from loans and borrowings - - -
Payment of interest on loans
and borrowings - (228) (459)
----------- ------------ ------------
Net cash used in financing
activities - (228) (459)
----------- ------------ ------------
Net (decrease) in cash & cash
equivalents during the period (412) (1,568) (2,819)
Cash and cash equivalents
and net debt at the beginning
of the period 848 4,093 3,673
Foreign exchange on cash balances 1 35 (6)
Cash & cash equivalents and
net debt at the end of the
period 437 2,560 848
=========== ============ ============
NOTES TO THE FINANCIAL INFORMATION
1. CORPORATE INFORMATION
The Company is a limited company incorporated in the British
Virgin Islands ("BVI") under the BVI Business Companies Act 2004 on
18 January 2008. The address of the registered office is Commerce
House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British
Virgin Islands VG 1110 and its principal place of business is
19/F., CMA Building, 64 Connaught Road Central, Central, Hong
Kong.
The Company is quoted on the AIM Market of the London Stock
Exchange (code: JADE) and the Quotation Board of the Open Market of
the Frankfurt Stock Exchange (code: 1CP1).
The principal activity of the Company is investment holding. The
Company is principally engaged in investing primarily in unlisted
assets in the areas of mining, power generation, health technology,
telecommunications, media and technology ("TMT"), and financial
services or listed assets driven by corporate events such as
mergers and acquisitions, pre-IPO, or re-structuring of state-owned
assets.
The condensed consolidated interim financial information was
approved for issue on 22(nd) September 2022.
2. BASIS OF PREPARATION
The condensed consolidated interim financial information has
been prepared in accordance with International Accounting Standard
("IAS") 34 "Interim Financial Reporting" and presented in US
Dollars.
3. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated interim financial information has
been prepared on the historical cost convention, as modified by the
revaluation of certain financial assets and financial liabilities
at fair value through the income statement.
The accounting policies and methods of computation used in the
condensed consolidated financial information for the six months
ended 30 June 2022 are the same as those followed in the
preparation of the Group's annual financial statements for the year
ended 31 December 2021 and are those the Group expects to apply
into financial statements for the year ending 31 December 2022.
The seasonality or cyclicality of operations does not impact the
interim financial information.
4. SEGMENT INFORMATION
The operating segment has been determined and reviewed by the
Board to be used to make strategic decisions. The Board considers
there to be a single business segment, being that of investing
activity.
The reportable operating segment derives its revenue primarily
from debt investment in several companies and unquoted
investments.
The Board assesses the performance of the operating segments
based on a measure of adjusted Earnings Before Interest, Taxes,
Depreciation and Amortisation ("EBITDA"). This measurement basis
excludes the effects of non-recurring expenditure from the
operating segments such as restructuring costs. The measure also
excludes the effects of equity-settled share-based payments and
unrealised gains/losses on financial instruments.
The segment information provided to the Board for the reportable
segment for the periods are as follows:
Six months ended Year ended
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Income on unquoted financial
assets 580 575 1,162
Financial income on loans
& receivables 679 673 1,347
Gain on disposal 300 - -
--------- -------- ------------
Gross portfolio income 1,559 1,248 2,509
--------- -------- ------------
Expected credit loss provision (3) - 731
Other provisions - -
Foreign exchange (84) 48 (53)
Equity fair value adjustments 821 - (38,840)
Portfolio income through
profit or loss (2,293) 1,296 (35,653)
--------- -------- ------------
Net assets:
FMHL 50,666 50,696 50,400
Meize 8,801 8,201 8,200
GCCF - 2,745 -
DocDoc 2,696 2,491 2,592
ICG 1,515 2,522 1,343
Infinity TNP 3,650 7,320 3,650
Other 16 16 17
--------- -------- ------------
Unquoted assets at fair
value through profit or
loss 67,344 73,991 66,202
Loans and other receivables
at fair value through the
profit or loss (third party) 6,347 34,681 5,556
Cash 437 2,560 848
Liabilities (5,084) (5,051) (4,578)
Net assets 69,044 106,181 68,028
The impact of fair value changes on the investments in the
portfolio are as follows:
Six months ended Year ended
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Income on unquoted financial
assets through profit or
loss 580 575 1,162
Equity fair value adjustments:
* FMHL - (583)
* Meize 1,500 - -
* GCCF - - (2,745)
* ICG - - (1,384)
* Infinity TNP - - (3,670)
--------- -------- ------------
- 1,500 - (8,382)
--------- -------- ------------
Expected credit loss provision:
- ICG (3) 27
Foreign exchange on unquoted
financial assets at fair
value through profit or
loss (34) (9) (29)
Total fair value changes
on financial assets at
fair value through profit
or loss 2,043 566 (7,222)
========= ======== ============
5. TAXATION
The Company is incorporated in the BVI and is not subject to any
income tax.
6. DIVID
The Board does not recommend the payment of an interim dividend
in respect of the six months ended 30 June 2022 (30 June 2021:
Nil).
7. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share
attributable to owners of the Group is based on the following:
Six months ended Year ended
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Numerator
Basic/Diluted: Net profit/(loss) 1,016 ( 271 ) (38,424)
-------- --------- ------------
Number of shares
'000 '000 '000
Denominator
Basic: Weighted average shares 115,278 115,278 115,278
Dilutive effect of warrants 17,568 - -
Diluted: Adjusted weighted average shares 132,846 115,278 115,278
-------- --------- ------------
Earnings per share
Basic (cents) 0.88 ( 0.24 ) (33.33)
Diluted (cents) 0.76 ( 0.24 ) (33.33)
For the year ended 31 December 2021, the warrants issued to the
Investment Manager were anti-dilutive and therefore there is no
impact on the weighted average shares in issue. No warrants were
issued during the period to 30 June 22.
8. UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
At the beginning of the period 66,202 73,423 73,423
Fair value changes through
profit and loss 2,045 568 (7,248)
Expected credit loss provision
through profit and loss (3) - 27
Disposals (900) - -
Payment of cash interest - - -
At the end of the period 67,344 73,991 66,202
======== ======== ============
During the period, the Company entered into a share purchase
agreement of 112,500 shares of the series B Preferred Equity in
Meize for the consideration of US$1.2 million. The Transaction
Price implies a valuation of US$10.0 million, a 22% premium to the
carrying value as at the 31(st) December 2021. In accordance with
company accounting policies, the fair value of the remaining shares
was adjusted upwards by US$1.5m.
9. LOANS AND OTHER RECEIVABLES AT FAIR VALUE THROUGH PROFIT OR LOSS
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
At the beginning of the
period 5,556 33,970 34,390
Additions - Meize consideration 14 800 - -
Cash receipts - - (417)
Fair value changes through
profit and loss (688) 38 (30,468)
Expected credit loss provision
through profit and loss - - 704
Finance income on loans 679 673 1,347
At the end of the period 6,347 34,681 5,556
======== ======== ============
Note 30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Loans - 29,081 -
Due in respect of Meize
divestment 14 800 - -
Other receivables 5,547 5,600 5,556
Amounts receivable - -
from related parties -
Total loans and borrowings 6,347 34,681 5,556
======== ======== ============
Loans represent the Convertible Bond issued by Fook Lam Moon
Holdings plus accrued interest. The Group has assessed the
recoverability of Loans in accordance with its policy, and at
year-end 31 December 21 applied a 100% provision against this
investment such that the carrying value of the Convertible Bond was
US $0 .0m. The circumstances remain unchanged as at 30 June 2022
and a further provision of US $0.68m has been taken against the
bond interest accrued in the period. The breakdown of Loans is as
follows:
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Loan principal 26,500 26,500 26,500
Accrued PIK interest 1,966 1,408 1,685
Accrued interest payable in
cash 2,672 1,877 2,274
Fair Value Adjustments - Principal (26,500) - (26,500)
Fair Value Adjustments - Accrued
Interest (4,638) - (3,959)
--------- -------- ------------
Gross loans receivable - 29,785 -
--------- -------- ------------
Lifetime ECL allowance recognised - (704) -
Net loans receivable - 29,081 -
========= ======== ============
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
At the beginning of the period - 704 704
ECL allowance charged to profit
or loss - - (704)
At the end of the period - 704 -
========== ======== ============
10. LOANS AND BORROWINGS
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Corporate debt 3,827 3,536 3,568
Total loans and borrowings 3,827 3,536 3,568
======== ======== ============
The movement in loans and borrowings is as follows:
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Opening balance 3,568 3,504 3,504
Borrowing costs amortised 31 32 63
Interest expense accrued 228 228 459
Payment of interest liability - (228) (459)
Closing balance 3,827 3,536 3,568
======== ======== ============
11. SHARE CAPITAL
Number
of Amount
Shares US$000
Authorised, called-up and fully paid
ordinary shares of no-par value each
at 30 June 2021 115,277,869 148,288
Authorised, called-up and fully paid
ordinary shares of no-par value each
at 31 December 2021 and at 30 June 2022 115,277,869 148,288
------------ --------
Consisting of:
Authorised, called-up and fully paid
ordinary shares of no-par value each
at 30 June 2022 117,925,673 148,903
Authorised, called-up and fully paid
ordinary shares of no-par value held
as treasury shares by the Company at
30 June 2022 (2,647,804) (615)
(i) Under the BVI corporate laws and regulations, there is no
concept of "share premium", and all proceeds from the sale of
no-par value equity shares are deemed to be share capital of the
Company.
12. FINANCIAL INSTRUMENTS
Financial assets
As at As at As at
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
Unquoted financial assets
at fair value 67,344 73,991 66,202
Loans at fair value - 29,081 -
Other receivables at fair
value 6,291 5,559 5,521
Cash and cash equivalents
at amortised cost 437 2,560 848
--------- --------- -------------
Financial assets 74,073 111,191 72,571
========= ========= =============
Financial liabilities
As at As at As at
30 June 30 June 31 December
2021 2020 2020
US$'000 US$'000 US$'000
Other payables and accruals
at amortised cost 1,257 1,515 1,010
Corporate debt at amortised
cost 3,827 3,536 3,568
--------- --------- -------------
Financial liabilities 5,084 5,051 4,578
========= ========= =============
The Corporate Bond is due for repayment in October 2022 and all
other financial liabilities are due within 12 months.
Financial assets at fair value through profit or loss
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into Level 1, 2 or 3 based on the degree to
which the fair value is observable:
Note As at As at As at
30 June 30 June 31 December
2022 2021 2021
US$000 US$000 US$000
Level 3
Unquoted financial assets at
fair value 8 67,344 73,991 66,202
Loans at fair value 9 - 29,081 -
Other receivables at fair value 9,14 6,291 5,559 5,556
73,635 108,631 71,757
There is no transfer between levels in the current period.
Carrying values of all financial assets and liabilities are
approximate to fair values. The value of level 3 investments has
been determined using the yield capitalisation (discounted cash
flow) method.
13. RELATED PARTY TRANSACTIONS
During the period under review, the Group entered into the
following transactions with related parties and connected
parties:
30 June 30 June 31 December
2022 2021 2021
Notes US$000 US$000 US$000
Remuneration payable to Directors 117 159 309
Harmony Capital
Management fee (i) 674 914 1,861
Incentive fee - - (424)
Amount due to Harmony Capital at period end 1,089 1,289 865
(i) Harmony Capital has been appointed as the Investment Manager
of the Group. The management fee, which was calculated and paid
bi-annually in advance calculated at a rate of 0.875% of the net
asset value of the Company's portfolio of assets at 30 June and 31
December in each calendar year.
Harmony Capital is entitled to receive an incentive fee from the
Company in the event that the audited net asset value for each year
is (1) equal to or greater than the audited net asset value for the
last year in relation to which an incentive fee became payable
("High Water Mark"); and (2) in excess of 105% of the audited net
asset value as at the last calendar year-end ("the Hurdle").
Subject to the High Water Mark and Hurdle being exceeded in respect
of any calendar year, the incentive fee will be equal to 20% of the
difference between the current year-end NAV and the previous
year-end NAV. 50% of the incentive fee shall be paid in cash and
the remaining 50% of the incentive fee shall be paid by ordinary
shares.
14. EVENTS AFTER THE REPORTING PERIOD
On the 20th July 2022 the Company received the Second Tranche
Price of US$ 400,000 from its partial divestment in Meize. On the
18th August 2022 the Company received the final Tranche Price of
US$ 400,000 from its partial divestment in Meize.
15. COPIES OF THE INTERIM REPORT
The interim report is available for download from
www.jaderoadinvestments.com.
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END
IR EAENAASKAEFA
(END) Dow Jones Newswires
September 22, 2022 06:59 ET (10:59 GMT)
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