24 May 2011 07:00
24 May 2011
China Private Equity Investments Holdings Limited
("CPE" or the "Company")
Notice of Final Results and Trading Update
The Company's principal activity is to invest in growth companies operating in Greater China.
The Board of CPE (AIM: CPEH) today announces that final results for the year to 31 December 2010 will be published in the second week of June 2011 and provides shareholders with a trading update for the period to end April 2011.
Trading Update
Net assets at 31 December 2010 are expected to be approximately US$28.5 million (2009: US$27.4 million). Net asset value per share at that date is expected to be approximately US$0.44 (2009: US$0.43, adjusted for the four for one bonus issue). Profit after tax for the year to 31 December 2010 is expected to be approximately US$1.8 million (2009: US$2.5 million), reflecting a smaller relative increase in fair value of our 37% holding in Fortel Technology Holdings Limited ("Fortel") in 2010 compared to 2009. The Company anticipates that such fluctuations will even out as its portfolio mix continues to expand in line with its steady progress over the course of the past 16 months.
Within our investment portfolio, the strong 2010 performance by Fortel, a digital media and technology services company operating in mainland China has continued into the current year, and it last month repurchased some of its own shares from the Company. The repurchase price of US$690.50 per share valued Fortel at US$72 million in total, and CPE now retains a 33.60% stake.. The Company will use the US$3.8 million raised by the transaction to provide further funding for investing in additional opportunities.
Fortel's plans for a listing on the Hong Kong Stock Exchange later this year remain on course.
In November 2010, the Company further positioned itself for continued growth with the acquisition of a 40% interest in Beijing based China iEducation Group for a total consideration of US$2 million. Involved in the development and distribution of digital education content to elementary and middle schools in mainland China, China iEducation Group has been profitable since 2008 and is working with CPE to implement a long-term expansion strategy.
Post the Company's year end, in March 2011, CPE announced an agreement to acquire up to a 30% stake in Hong Kong-based Enfinium International Holdings Limited ("Enfinium"), a leading online financial services business, for a total consideration of US$6 million, satisfied by the issue of 10 million new CPE ordinary shares of no par value at a price of US$ 0.60 per share. Enfinium represents a strategic investment intended simultaneously to broaden CPE's exposure to online opportunities and provide direct access to Enfinium's global network of private equity investors.
Established in 2007, Enfinium provides its clients with a global online trading platform that allows them to trade stocks on most of the world's stock exchanges, along with foreign exchange, futures and other transactions. It has a wide network of high net worth investors who are seeking access to Chinese investment opportunities such as those sourced by CPE. For the twelve months ending 28 February 2011, Enfinium generated pre-tax profits of approximately US$2.5 million. As at 28 February 2011, the business had unaudited net assets of approximately US$3.5 million. The trading in the last three months has been well ahead of the same period last year, and the business is expecting to substantially outperform 2010.
The Company's investment strategy is to provide shareholders with an attractive return on their investment through capital appreciation, by investing in businesses doing business in or with China which are likely to achieve a trade sale or an IPO, predominantly within a medium to long term time horizon. The Directors believe that the Company's current portfolio of investments will generate such returns and that CPE is on course to deliver its objectives for shareholders.
Commenting, Duncan Chui, CEO, said, "In addition to our flagship investment in Fortel, we have successfully sourced a number of exciting opportunities that we consider to have the potential to generate significant capital appreciation for shareholders. 2011 will see further progress towards our objectives."
For further information, please visit www.cpe-invest.com or contact:
China Private Equity Investments Holdings Limited | +852 2801 6770 |
Duncan Chui, CEO / Ernest Wong, CFO | |
Shore Capital and Corporate Limited (Nominated Adviser) | +44 (0)20 7408 4090 |
Stephane Auton | |
Tavistock / First City Public Relations | |
Allan Piper | +852 2854 2666 |
Simon Hudson / Lydia Eades | +44 (0) 20 7920 3150 |