Legend Holdings Corporation ( “Legend Holdings” or the “Company”; Stock Code: 3396.HK) today announced its unaudited condensed consolidated interim results for the six months ended June 30, 2019 (the “Reporting Period”). During the Reporting Period, the revenue of the Company increased by 15% year-on-year to RMB179.311 billion. The net profit attributable to equity holders of the Company amounted to RMB2.665 billion and basic earnings per share was RMB1.14.
Mr. Zhu Linan, president of Legend Holdings, stated: “Confronted with uncertainties from the global macro environment and downward pressure on economic growth, Legend Holdings has resolutely implemented its established strategy and maintained steady development in its overall business. In the first half of the year, in line with a changing market environment, the Company actively took measures to ensure the stability of business fundamentals and operating safety of the Company. Strategic Investments business proactively strengthened risk prevention and control, continuing to promote the capital operation of portfolio companies to establish their diversified financing capacity. Financial Investments business continued to promote fundraising which achieved outstanding results, while strengthening portfolio management and resource recycling, thus ensuring sound cash inflow and increase in fair value to Legend Holdings. In the future, Legend Holdings will continue to enhance the fundamentals of portfolio businesses and operation profitability, and assist portfolio companies in strengthening their capability of risk resistance and competitiveness through proactive and in-depth post-investment management and value-added services. We will also continue to optimize our investment portfolio and pay attention to resource recycling and efficiency improvement. Meanwhile, we will further conduct research on and promote the resource synergy of our portfolio companies and strive to improve the profitability and value of the Company.”
Strategic Investments continued to expand its business scale and the fundamentals grew steadily
In the first half of 2019, despite a number of external challenges, Strategic Investments business continued to expand its business scale. The Company took active measures to ensure the stability of its business fundamentals and the operating safety. The revenue from it increased by 15% year-on-year to RMB178.986 billion, recording growth for the fifth consecutive reporting period.
IT segment continued to promote the transformation and achieved good growth. Revenue from this segment increased by 14% year-on-year to RMB163.998 billion and the net profit attributable to equity holders of the Company generated a 159% year-on-year growth to RMB598 million.
Thanks to its Intelligent Transformation strategy, Lenovo realized a record-breaking market share of 25.1% in PC Business, further enhance its industry-leading profitability. The mobile business remained profitable and continued to improve its profitability. Data Center Group’s losses have been continuously narrowed. In the future, Lenovo will keep pace with the Intelligent Transformation strategy and strive to be the industry leader.
Business structure of financial services segment was well improved with strengthened risk resistance capacity, the revenue up to RMB4.342 billion representing an increase of 119% year-on-year with the net profit attributable to equity holders of the Company coming in at RMB1.043 billion.
During the Reporting Period, financial services segment closely responded to macro-economic and regulatory trends, correspondingly adjusted the business structure and scale and continuously improved the risk control capability, while actively searched for opportunities in insurance and securities to propel portfolio companies to go public. During the Reporting Period, Lakala Payment was listed on the ChiNext Board of Shenzhen Stock Exchange, which contributed good income. Based on its study and evaluation on the macro-environment, Zhengqi Financial focused on high-tech industries and relevant ecological chains and reduced its scale of capital-based business, while its scale of investment business remained stable. JC Finance & Leasing continued to reinforce its business layout and market expansion which brought rapid growth. The revenue and net profit reached RMB500 million and RMB120 million respectively.
As a new pillar asset of Legend Holdings, Banque Internationale a Luxembourg (BIL) has grown steadily for one year from its acquisition with stable and positive ratings and repeated market recognition. Assets under management (AUM) increased by 6.1% reaching EUR41.9 billion compared with that at the end of 2018. During the Reporting Period, the revenue and net profit amounted to EUR265 million and EUR45 million respectively, and CET-1 ratio stood at 11.73%. The Retail, Corporate and Wealth Management business of BIL delivered a good performance. At the same time, BIL approved its strategic plan for the period from 2020 to 2025, in which expanding the Chinese market is one of the major priorities in the future.
Innovative consumption and services segment continued to develop the existing business and promote value enhancement, while seeking investment opportunities. The revenue from this segment recorded RMB429 million.
Better Education’s fundamentals are still solid despite the effect from the education industry policies. As a leading kindergarten group with direct operation networks of middle and high-end kindergartens in China, it directly ran 111 kindergartens and 9 early learning centers and training schools. Shanghai Neuromedical Center put emphasis on technology and service quality, promoted business progress and enhanced the hospital brand. Thus, it welcomed an interim profit for the first time. CAR focused on its core business and strengthened the application of advanced technologies. During the Reporting Period, CAR recorded the revenue of RMB3.741 billion and net profit of RMB279 million, representing a year-on-year increase of 22% and 106%, respectively.
The agriculture and food segment witnessed rapid development, the revenue of which increased by 17% year-on-year to RMB7.491 billion with net profit attributable to equity holders of the Company amounting to RMB112 million.
Joyvio Group categorizes fruit and high-end animal protein as its two main business lines, and actively plans its business layout in fresh semi-finished products and agro-food technology. During the Reporting Period, Joyvio Group continued to increase its shareholdings in Golden Wing Mau, further enhancing the strategic value of Golden Wing Mau as a fruit business platform. The revenue of Golden Wing Mau whose main products are quality fruits grew rapidly, gaining broader brand influence of “Joyvio”. The “global resources + China’s market” strategy of Joyvio Agriculture has made a major breakthrough and successfully materialized the first project involving cross-border merger and acquisition of upstream high-quality salmon resources overseas by a Chinese enterprise, which further consolidated its ability to control scarce and high-quality upstream resources. Joyvio Agriculture’s existing businesses remained stable, preserving its leading position in the industry. KB Food has been awarded the title of Best Seafood Supplier for three consecutive years, which continuously consolidated its leading position in Australian market. In addition, Huawen Food in which Joyvio Group holds shares formally submitted its A-share market IPO application, which has been accepted.
The advanced manufacturing and professional services segment achieved profit growth. The net profit attributable to equity holders of the Company increased by 59% year-on-year to RMB236 million and the revenue recorded RMB2.726 billion.
During the Reporting Period, benefiting from the further optimization of its product mix and continuous improvement in operation, Levima Group recorded a net profit of RMB242 million, representing a year-on-year increase of 98%. Levima Advanced Materials, a subsidiary of the Company, maintained the leading level in the industry and has made positive progress in scientific and technological innovation. At the same time, Levima Advanced Materials is actively preparing for the A-share listing and completed counselling and inspection, and received the notice of accepting its IPO and Listing application from CSRS. Zeny Supply Chain turned losses into profits mainly due to the optimization of heavy asset. Facing the serious market challenges, EAL continued to improve its efficiency in operation. In addition, CSRC also formally accepted the IPO application of its A-shares.
Revenue from the Financial Investments was increased, with remarkable fundraising.
Financial Investments business paid more attention to improving the fundamentals of the asset portfolio, managed to exit projects by seizing the opportunities in the capital market, and made proper efforts in resources recycling, which contributed to sound cash inflow and increase in fair value to Legend Holdings. During the Reporting Period, net profit attributable to the equity holders of the Company increased by 187% year-on-year to RMB1.350 billion. In addition, although facing continuous market volatility, the fund raising through the associate funds continued to achieve outstanding results which proved the market recognition and competitiveness at each platform.
Legend Star managed 5 funds, of which the total AUM exceeded RMB2 billion with an aggregate of over 250 onshore or offshore investment projects to date. During the Reporting Period, Legend Star had nearly 20 onshore or offshore new investment projects. Among the projects under management, over 30 projects had follow-on financing, while 5 projects were exited. Legend Star has gained considerable investment incomes and achieved value enhancement.
Legend Capital managed 21 funds, of which the total AUM exceeded RMB50 billion. A total of 64 portfolio companies of Legend Capital have been successfully listed to date. During the Reporting Period, the total raised fund amounted to RMB7.877 billion, including a total of RMB3.481 billion newly raised. During the Reporting Period, Legend Capital completed 13 new project investments, fully or partially exited 22 projects. Among the enterprises under management, 6 of which completed the listing and the application for the listing of A shares of 1enterprise has been approved, contributing a cash inflow of over RMB600 million.
Hony Capital managed 11 funds, of which the total AUM exceeded RMB80 billion. A total of 45 portfolio companies of Hony Capital were successfully listed and another 3 were listed on NEEQS to date. During the Reporting Period, the cultural industry fund completed a new round of delivery with a size of RMB970 million. Hony Horizon Fund Management Co., completed a new fund raising – Hony Horizon consumption and upgrading hybrid fund (fund code: 006644), with a net subscription amount of RMB404 million. The AUM of the 2 public funds in management amounted to an aggregate of RMB610 million. During the Reporting Period, Hony Capital completed additional investment in 6 existing projects, fully or partially exited from 14 projects, and 2 of its portfolio companies got listed in China’s capital market. Hony Horizon SOE transformation and upgrading hybrid fund established its position, while consumption upgrading hybrid fund is still building its position.
Mr. Liu Chuanzhi, chairman of Legend Holdings, stated: “At present, the uncertainties brought from international politics and macroeconomic circumstances will remain for some time. With this in mind, Legend Holdings should stand strategically higher, carrying out sufficient research afore environmental changes. By ensuring our fundamentals operated under safety, we will firmly and steadily head to our established strategic goals. The Company should also make good use of the great advantages of China’s huge market, while continuing to pay close attention to forward-looking exploration and investments in scientific and technological innovation. At the same time, we need to keep a watchful eye on overseas investment opportunities, welcome changes, and continuously provide returns to shareholders, thus create great contributions to China’s economy.”
About Legend Holdings Corporation
Legend Holdings is a leading large investment holding company in China, and has created an innovative two-wheel-drive business model of “Strategic Investments + Financial Investments”. Strategic Investments business invests in 5 segments including IT, financial services, innovative consumption & services, agriculture & food, and advanced manufacturing and professional services. Financial Investments business includes angel investment, venture capital and private equity investment, covering all stages of a company’s life cycle. Over the past 30 years, under the leadership of Founder and Chairman, Mr. Liu Chuanzhi, and President, Mr. Zhu Linan, by understanding on important themes of China’s economic development, implementing flexible investment strategies, extensive management experience, value discovery and creation, Legend Holdings acquires and manages excellent investment portfolios with high potential, and has cultivated a number of influential and outstanding enterprises at home and abroad. We also promote the business synergy among associate companies, and continuously optimize our asset portfolio to achieve sustained value growth.
