Far East Horizon Announced 2016 Annual Results
Hong Kong, 29 March 2017 – Far East Horizon Limited ("Far East Horizon" or "the Group" , Stock Code: 03360.HK), a leading financial services company in China, today announced its annual results for the year ended 31 December 2016 (the "Period").
In 2016, the Group realized revenue of RMB13.93 billion, representing a year-on-year growth of 18.08%. The profit attributable to holders of ordinary shares of the Company during the Period was RMB2.88 billion, representing an increase of 15.15%. As of 31 December 2016, the total assets of the Group amounted to approximately RMB166.56 billion, up 19.55% as compared with the same period of 2015.
Maintain Stable Growth of All Business and Keep Assets Quality Stable and Under Control
During the Period, both financial and advisory segment and industrial operation segment recorded steady growth of income. Income of the Financial and advisory segment (before business taxes and surcharges) was RMB11.96 billion, accounting for 84.98% of the total income, and representing a growth of 11.77% from the previous year. The Group also accelerated its pace in developing integrated industrial operation business with income derived from industrial operations grew by 75.16% to RMB2.11 billion, accounting for 15.02% of the total income.
The Group has achieved a higher growth rate of major financial indicators. Meanwhile, the Group maintained basically stable asset quality throughout the year, through continuous optimizing the industry distribution of asset and introducing high-quality customers in the industry. As at the end of year, the non-performing asset ratio was 0.99%, while the ratio of overdue interest-bearing assets past 30 days was approximately 0.98%. The Group’s provision coverage has remained at a level of more than 200% throughout the year,
Financial Business Segment
With regard to the financial business, the Group implemented ongoing and stable expansion of the financial business while safeguarding its assets. While continuing to expand its business scale, the Group set service integration as its goal the Group further enriched its financial product and service portfolio by operating business similar to investment banking, in order to meet the multi-dimensional financial needs of real economic customers. In addition to the original leasing and factoring products, we added structured financing, PPP model, asset management and other innovative products, to further expand the customer base and form a stable business increment.
Industrial Operation Business Segment
As for the industrial operation business, Far East Horizon facilitated its deployment on healthcare and education, and continued to enhance the operating capability in different sectors.
Hospital operation: As of the end of 2016, the Group entered into agreements to invest or gain control over 11 additional hospitals through investment, merger and acquisition, as well as reorganization. The Group invested or gained control over 20 hospitals in total with over 7,000 beds available and nearly 4,400 beds were actually in use. During the Period, the operating revenue of 2016 from the above 20 hospitals amounted to approximately RMB1,415 million with a net profit of RMB118 million. The Group will focus on the nature of medical care as the core, with the existing specialist advantages as the starting point, and optimize the synergies to expand the medical field, in order to establish a professional and technical leading hospital operation management group with extraordinary service awareness.
Education: As of the end of 2016, The Group entered into agreements in respect of 12 new high-end kindergarten sites in Shanghai and some other cities during the year and acquired three kindergartens and 2 international schools in 2015. As of the end of 2016, the Group operated 4 high-end kindergartens and 2 international schools with more than 930 students, representing an increase of approximately 100% as compared to last year. as compared to last year. During the Period, Revenue from education institutions amounted to RMB115.9 million for 2016, representing an increase of 1,063.87% from 2015.
Diverse financing methods and improved liability structure
With respect to direct financing, the Group further enriched the bond portfolios at home, having formed the continued issuing trend. The issuance of the year amounted to 14, with the cumulative amount of RMB26 billion, including RMB13 billion of corporate bonds, RMB8 billion of PPNs, RMB2 billion of ultra-short financing bills, RMB2 billion of short financing bills and RMB1 billion of other bonds. Within the market of indirect financing, the Group achieved cross-platform facility on the basis of the current financing channel as required by its strategic development, and strengthened its co-operation relationship with key bank channels at the same time.
In terms of off-balance-sheet financing, the Group achieved the breakthrough in quantity in 2016, which gradually showed the effect of scale. The financing amount of asset securitization business in 2016 accumulated to RMB27.7 billion, which was 1.8 times of that of 2015, which enabled us to be the most active financial leasing company with the issue of asset-backed securities products in China. Off-balance-sheet financing diversified funding sources, optimized liability structure and improved management on financial statements. Meanwhile, in the situation that the off-balance-sheet financing cost had been continuously reducing, we achieved the best issuance of products in the same category in the period. Currently, the Group is fully equipped with the continuous and effective issue ability, enabling it to establish the market standard, solidify the project model and set up the image of a mature issuer in the capital market.
Mr. KONG Fanxing, Vice Chairman of the Board and Chief Executive Officer of Far East Horizon, said, “In 2016, the Chinese economy continues to go downward and the industrial restructuring continued to deepen. With the support of national policies, China’s financial leasing industry has achieved a rapid development. Amidst the continuous macroeconomic downturn and the increasingly fierce competition of the financial industry, the Group adhered to the operation concept of “finance plus industry” and focused on the real economies. It took advantages and features of the “focusing on industry” and deeply understood the customer’s needs, to provide comprehensive and diversified products to realize a stable growth in the results. Looking forward, there are uncertainties in global economy and politics, and China’s economy is facing challenges with opportunities ahead. As a big country, China’s future lies in the real economy and the cornerstone of long-term economy lies in the real industry. Although China’s economic growth is declining, the quality of economic growth is gradually improving, which will be savings energy for the Chinese economy to get out of the cycle. Against this backdrop, Far East Horizon will continue to adopt the innovative development model characterized by an “organic and effective combination of finance and industries” by optimizing the asset allocation for the traditional financial leasing industry and strengthening management of risks relating to assets to effectively safeguard assets security, while actively accelerating the expansion of our industrial operations. Our efforts in facilitating the organic combination of and effective interactions between our financing businesses and industrial operations businesses and in actively releasing their financial value will ultimately maximize shareholder value.”