TIDMJADE

RNS Number : 2753M

Jade Road Investments Limited

20 September 2021

20 September 2021

JADE ROAD INVESTMENTS LIMITED

(" Jade Road Investments ", " JADE ", the " Company " or the " Group ")

INTERIM CONSOLIDATED RESULTS FOR THE SIX MONTHSED 30 JUNE 2021

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 2021.

Financial Highlights:

-- Total income increased to US$1.25 million from interest payments and fair value adjustments (H1 2020: US$1.19 million).

-- Net loss of US$0.27 million (H1 2020: US$0.70 million). The core drivers of the net loss are a US$259k finance expense, mainly related to the interest payable on the Company's corporate bond.

   --   Consolidated loss per share (basic) of US$0.24 cents (H1 2020: US$0.69 cents). 

-- Consolidated NAV at 30 June 2021 decreased slightly by 0.25% to US$106.2 million/GBP76.8 million (31 December 2020: US$106.5 million/GBP77.9 million). The decrease in NAV stems from a decrease in cash.

   --   NAV per share at 30 June 2021 US$0.90 (GBP0.65) (30 June 2020 US$0.95/GBP0.75). 
   --   Period end cash position of US$2.56 million (30 June 2020: US$3.2 million). 

Investment and Operational Highlights:

   --     Future Metal Holdings Limited ( "Future Metal ") 

o In March 2021, a new contractor was appointed to further enhance the efficiency of the operation and reach customers with a further geographical radius.

o Sales have seen an upward trend in the first half of 2021 compared to 2020.

   --     Fook Lam Moon (" FLM ") 

o FLM's business was impacted by the COVID-19 pandemic in 2020, which severely limited inbound tourism, particularly from Mainland China.

o As the Hong Kong government eases COVID-19 restrictions on restaurants and some air travellers in 2021, the food and beverage industry is gradually recovering to pre-pandemic levels.

   --     DocDoc Pte Ltd (" DocDoc ") 

o In November 2020, DocDoc partnered with SpesNet Global Group, a leading healthcare technology provider, to integrate its digital third-party administrator ("TPA") technology and provide a first-of-its-kind complete digital health ecosystem to insurers, supporting their policyholders through the continuum of care.

o Under this agreement, DocDoc will receive exclusive access to SpesNet's platform to include Singapore, Malaysia, Thailand, Hong Kong, India, and the People's Republic of China.

   --     Meize Energy Industries Holdings Limited (" Meize ") 

o Meize has maintained a full order book from its clients in 2021 due to the strong market demand, especially the offshore wind market.

o The Jiangsu plant initiated an expansion in early 2021 to meet the rising demand, which was completed and commenced operation in June 2021.

Chairman of Jade Road Investments, John Croft, commented:

"The Company's portfolio has continued to weather the pandemic storm with the Company's investment manager, Harmony Capital, driving phase two of a three-phase investment strategy focused on exits, restructuring our legacy assets and seeking investments in smaller fast growing companies at IPO or pre-IPO stages.

Harmony Capital set out a three-phase strategy to reposition Jade Road. This has involved rehabilitating legacy assets, such as Future Metal Holdings Limited (FMHL) and Meize Energy, towards a full or partial exit and reinvesting the resulting cash into new income-generating assets, prioritising high-growth Asian SMEs in the Healthtech, Medtech and Fintech sectors.

With Asian SMEs increasingly starved of capital, Jade Road is assessing an exceptionally strong pipeline of investee candidates which, with an emphasis on credit instruments such as secured debt or non-mandatory convertible bonds, will result in a well-constructed portfolio with near-term downside protection.

The Board believes Jade Road's new investment strategy is well positioned to construct a solid base of exciting, income generating assets for high-quality growth, promoting long-term value for our shareholders."

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, 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.

Chairman's Statement

For the first half of 2021, Jade Road has been progressing phase two of a three-phase investment strategy focused on rehabilitating legacy assets, exits and seeking investments in smaller, IPO and pre-IPO investments.

Jade Road has delivered a stable financial performance in the period. Total income increased to US$1.24 million from interest earned and fair value adjustments for the first six months of the year (H1 2020: US$1.19 million).

Investment Strategy

I am pleased to report that in spite of the long shadow that COVID-19 has cast over the world in the past 18 months, the Company's existing portfolio has largely avoided any major impairments successfully navigating the challenges presented by the pandemic.

Jade Road is currently undergoing phase two of a three-phase investment strategy focused on the portfolio restructuring of its legacy assets which are not fully aligned with the Company's revised investment approach by exiting either through full or partial sales, or IPOs. In addition, the Company is aiming to build a new portfolio of pan-Asian investments providing income and capital gain.

Jade's large legacy assets in China: Future Metal Holdings Limited (FMHL), the largest magnesium dolomite quarry in Shanxi Province, and Meize Energy Industries, one of the largest wind turbine blade manufacturing companies with factories in Inner Mongolia, Ningxia Province, and Jiangsu Province, both reported significant progress for the first six months of 2021.

On our website you can find SRK Consulting's updated Competent Persons Report (CPR) for FMHL, which includes JORC Mineral Resources and Ore Reserves estimates totalling 113 million tonnes of dolomite as measured by Proved and Probable Reserves, and 149 million tonnes of dolomite as calculated by Measured, Indicated and Inferred Resource. As magnesium prices recover from recent weakness, we expect demand for FMHL's products to increase as the year progresses.

Meize Energy initiated an expansion of its third state-of-the-art turbine blade manufacturing plant in Jiangsu, commencing operations in June 2021. The factories are operating at full capacity, producing internationally certified blades for both onshore and offshore wind turbines.

Our Michelin-starred Fook Lam Moon restaurants in Hong Kong are recovering to pre-pandemic levels and our luxury resort projects in Niseko, Japan are accepting bookings for this upcoming skiing season, although uncertainty remains over the exact timing of a full opening of the resort.

The core strategy is to build a base of income generating assets that covers overheads, management fees and finance costs, with a growing surplus to fund dividends.

As part of this core strategy, Jade Road will look to invest in Asian High Growth Companies via equity (in listed companies and/or pre-IPO investments) as part of its existing investment policy. While Jade Road will consider opportunities in all sectors as they arise, potential opportunities in Technology, including Healthtech, Medtech and Fintech will be prioritised. The Total Allocation under this expanded investment focus will be no more than 10% of Jade Road's present NAV, as of 30 June at US$106.2 million, down slightly from US$106.4 million (31 December 2020) and no more than 20% once the NAV exceeds US$150 million. Investments in each company will not exceed 5% of the total allocation, in order to mitigate risk through diversification.

At the same time, we aim to limit single country and industry exposures to 20% of the overall portfolio and reduce portfolio exposure to China towards 30-40% in the near term.

By targeting the broad Asian SME subsector, Jade Road can access an immense market in which it can leverage both its capital, and its investment manager's direct relevant experience.

From a corporate perspective, Jade Road sees strong appeal in the vibrant start-up environment in regions such as Hong Kong and Singapore, typified by our investment in Singapore-based DocDoc, a leading pan-Asian virtual network of physicians, clinics and hospitals.

Investment candidates are undergoing detailed review from a pipeline of potential opportunities in IT, Fintech, Healthcare and online commerce.

In terms of ESG (Environmental, Social, Corporate Governance), Jade Road has been incorporating ESG principles into our risk management and due diligence processes. All potential investment candidates must demonstrate that they are taking ESG seriously and working towards being as fully ESG compliant for the stage of company, taking proportionality into account.

It is my strong belief that government policy to encourage more sustainable business models, technologies and consumption patterns in Asia is likely to create greater demand for private capital.

Summary

Our focus throughout 2021 is on exits, restructurings and investing in smaller, exciting IPO and pre-IPO investments that potentially possess substantial upside. Some of these smaller investments could have a disproportionate interest to our retail investors.

In a market in which Asian SMEs are increasingly starved of capital, Jade Road has seen opportunities to negotiate and invest in structured instruments. Its preference for income-generating assets puts an emphasis on credit instruments such as secured debt or non-mandatory convertible bonds when structuring investments, which the Company believes will result in a better constructed portfolio with near-term downside protection.

The Board would like to take this opportunity to thank the investment teams for their hard work and commitment during these challenging times.

Jade Road is well positioned for the future with an experienced investment management team, the development of a constructed base of income generating assets for high quality growth, and a resilient liquidity position and balance sheet. I hope to report further progress against this strategy by the end of 2021.

The principal assets as of 30 June 2021 are detailed below:

 
 Principal          Effective    Instrument       Valuation     Credit   Cash receipts         Equity      Valuation 
  assets             interest       type              at 31     income     US$ million    investment/          at 30 
                        %                          December        US$                          other           June 
                                                       2020    million                       movement           2021 
                                                US$ million                               US$ million    US$ million 
                                Convertible 
 FLM Holdings           -           Bond               28.4        0.7               -              -           29.1 
 
 Future 
  Metal Holdings                 Structured 
  Limited             84.8         Equity              50.4        0.3               -              -           50.7 
 
 Meize Energy                    Redeemable 
  Industrial                     convertible 
  Holdings                       preference 
  Ltd                  7.9         shares               8.2          -               -              -            8.2 
 
 DocDoc                         Convertible 
  Pte Ltd               -           Bond                2.4        0.1               -              -            2.5 
 
 Infinity 
  Capital                         Secured 
  Group                 -        Loan Notes             2.3        0.2               -              -            2.5 
 
 Infinity 
  TNP                  40          Equity               7.3          -               -              -            7.3 
 
 GCCF & 
  Other 
  investments           -                               8.3          -               -              -            8.3 
 
 Corporate 
  debt                  -                             (3.5)          -               -              -          (3.5) 
 
 Other 
  liabilities           -                             (1.5)          -               -              -          (1.5) 
 
 Cash                                                   4.1          -               -          (1.5)            2.6 
 
 
 Total N et Asset 
  Value                                               106.4        1.3               -          (1.5)          106.2 
-----------------------------  -------------  -------------  ---------  --------------  -------------  ------------- 
 
 

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.

Starting from March 2021, a new contractor was appointed to further enhance the efficiency of the operation and reach customers with a further geographical radius. In line with the wide-ranging industrial activities in China, sales have seen an upward trend. The management of the Quarry is now in contact with external parties regarding a potential business collaboration of highway construction. Together with the potential demand growth from the construction sector, the local team also noted the recovery in the magnesium market. In August 2021, magnesium prices reached a 13 year high surging from RMB21,200 (USD3,270) to RMB22,500 (USD3,470) per tonne due to a lack of supply in the market. The local team is actively looking for potential smelters in the local region to establish additional sales channels. 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 2021.

FLM Holdings ("FLM")

Our second largest investment by value is in the controlling shareholder of a Hong Kong-based restaurant group Fook Lam Moon ("FLM").

The Company holds a Convertible Bond of US$26.5 million in Fook Lam Moon Holdings. The Convertible Bond has a maturity of 5 years and pays a coupon of 5.0% per annum (3.0% paid in cash with the remainder rolled up with the principal amount outstanding).

FLM's business was impacted by the COVID-19 pandemic in 2020, which severely limited inbound tourism, particularly from Mainland China. However, FLM is an over 70-year-old business that has weathered many past crises such as SARS and the Company is confident in FLM's resilience and ability to ensure its long-term future. As the Hong Kong government eases COVID-19 restrictions on restaurants and some air travellers in 2021, the food and beverage industry is gradually recovering to the pre-pandemic levels.

As of 30 June 2021, the carrying value of the Convertible Bond was US$29.1 million taking into account the current face value of the instrument, accrued PIK interest and cash interest receivable, less an Expected Credit Loss ("ECL") provision of US$0.7 million against aged cash interest receivables.

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, holds 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 the second half of 2020, Meize completed a third plant in Jiangsu Province, which commenced operations in August 2020. The Jiangsu Plant will be solely focused on producing offshore blades due to demand in the market for this product. In terms of production, it is the largest production site and produces 24 sets of blades each month. The Jiangsu site is looking to double its production by the middle of 2021.

Meize has maintained a full order book from its clients in 2021 due to the strong market demand, especially the offshore wind market, and driven by their largest existing customer. The Jiangsu plant initiated an expansion in early 2021 to meet the rising demand, which was completed and commenced operation in June 2021.

As of 30 June 2021, the Company's interest in Meize had a fair value of US$8.2 million based on a Discounted Cash Flow analysis. The carrying amount represents a discount of over 50% to the full redemption value of the Company's investment.

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.

Tellus Niseko is in late stage discussions with several buyers in the Asia-Pacific region to sell a number of units in the development. The management team has been monitoring the local market performance to ensure prices are reflected appropriately.

As of 30 June 2021, the carrying value of its investment was US$7.3 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. The Company agreed to provide a US$4.0 million Secured Loan note facility to ICG in December 2018. The facility included two equal tranche drawdowns, carrying a coupon of 17.5% per annum in cash. The first tranche and second tranche were drawn on 31 January 2019 and 30 August 2019, respectively. The Company was also issued detachable warrants, which give it the right to purchase shares in ICG or its parent company should either undertake a liquidity event, such as an Initial Public Offering.

ICG has been closely monitoring the local tourism market to decide on the winter operation plan. As soon as the pandemic restrictions are lifted in Niseko, ICG shall recommence the operations immediately.

As of 30 June 2021, the carrying value of the Secured Loan was US$2.5 million taking into account the current face value of the instrument and cash interest receivable, less an Expected Credit Loss ("ECL") provision of US$47.2k against aged cash interest receivables.

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. In November 2020, DocDoc partnered with SpesNet Global Group, a leading healthcare technology provider, to integrate its digital third-party administrator ("TPA") technology and provide a first-of-its-kind complete digital health ecosystem to insurers, supporting their policyholders through the continuum of care.

Under this agreement, DocDoc will receive exclusive access to SpesNet's platform to include Singapore, Malaysia, Thailand, Hong Kong, India, and the People's Republic of China. Going forward, DocDoc will integrate SpesNet's digital TPA technology with DocDoc's telemedicine platform and AI-powered doctor discovery platform, HOPE (Heuristic for Outcome, Price and Experience), which matches policyholders to relevant healthcare providers, to power a holistic offering.

As of 30 June 2021, the carrying value of the Convertible Bond was US$2.5 million. An annual coupon of 8% (4.0% cash and 4% Payment-in-Kind was converted to 8% Payment-in-Kind).

John Croft

Chairman

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
                                                   Six months ended      Year ended 
                                               30 June        30 June   31 December 
                                                  2021           2020          2020 
                                             Unaudited      Unaudited       Audited 
                                    Note        US$000         US$000        US$000 
 
 Income from unquoted 
  financial assets                                 575            525         1,137 
 Finance income from 
  loans                                            673            668         1,337 
 
 Gross portfolio income             4            1,248          1,193         2,474 
 
 Fair value changes on 
  financial assets at 
  fair value through profit 
  or loss                                           48           (14)         5,045 
 Expected credit loss 
  provision                         9                -          (322)         (779) 
                                          ------------  -------------  ------------ 
 
 Net portfolio income               4            1,296            857         6,740 
 
 Management fees                    13           (914)          (900)       (1,888) 
 Incentive fees                                      -           (40)       (1,750) 
 Administrative expenses                         (394)          (436)       (1,017) 
 
 Operating (loss)/profit                          (12)          (519)         2,085 
 
 Finance expense                                 (259)          (179)         (442) 
 
 (Loss)/profit before 
  taxation                                       (271)          (698)         1,643 
                                          ------------  -------------  ------------ 
 
 Taxation                           5                -              -             - 
 
 Other comprehensive 
  income 
 Foreign currency translation 
  differences                                        -              -             - 
 
   Profit/(Loss) and total 
   comprehensive expense 
   for the year                                  (271)          (698)         1,643 
                                          ============  =============  ============ 
 
 Earnings per share                 7 
 Basic                                     (0.24)cents    (0.69)cents    1.56 cents 
                                          ============  =============  ============ 
 
 Diluted                                   (0.24)cents    (0.69)cents    1.34 cents 
                                          ============  =============  ============ 
 
 
 

The results above relate to continuing operations.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
 
                                                          30 June     31 December 
                                           30 June           2020            2020 
                                              2021      Unaudited         Audited 
                                         Unaudited     (Restated)      (Restated) 
                                 Note       US$000         US$000          US$000 
-----------------------------   -----  -----------  -------------  -------------- 
 Assets 
 Unquoted financial assets 
  at fair value through 
  profit or loss                  8         73,991         68,054          73,423 
 Loans and other receivables      9         34,681         33,691          33,970 
 Cash and cash equivalents                   2,560          3,190           4,093 
 Total assets                              111,232        104,935         111,486 
                                       -----------  -------------  -------------- 
 
 Liabilities 
 Other payables and accruals                 1,515          1,227           1,530 
 Current liabilities                         1,515          1,227           1,530 
                                       -----------  -------------  -------------- 
 
 Loans & borrowings               10         3,536          3,472           3,504 
                                       -----------  -------------  -------------- 
 Total liabilities                           5,051          4,699           5,034 
                                       -----------  -------------  -------------- 
 
 Net assets                                106,181        100,236         106,452 
                                       ===========  =============  ============== 
 
 Equity and reserves 
 Share capital                    11       148,903        145,084         148,903 
 Treasury share reserve                      (615)          (671)           (615) 
 Share based payment reserve                 2,936          2,937           2,936 
 Accumulated losses                       (45,043)       (47,113)        (44,772) 
                                       -----------  -------------  -------------- 
 Total equity and reserves 
  attributable to owners 
  of the parent                            106,181        100,236         106,452 
                                       ===========  =============  ============== 
 
 

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 2020                 145,027      (671)      2,936      (46,415)   100,877 
 Loss for the period                 -          -          -         (698)     (698) 
 Other comprehensive 
  income                             -          -          -             -         - 
                             ---------  ---------  ---------  ------------  -------- 
 Total comprehensive 
  expense for the period             -          -          -         (698)     (698) 
 Transactions with 
  owners: 
 Issue of shares                    57          -          -             -        57 
 Share buybacks                      -          -          -             -         - 
 
 Group balance at 30 
  June 2020                    145,084      (671)      2,936      (47,113)   100,236 
                             ---------  ---------  ---------  ------------  -------- 
 
 Profit for the period               -          -          -         2,341     2,341 
 Other comprehensive 
  income                             -          -          -             -         - 
                             ---------  ---------  ---------  ------------  -------- 
 Total comprehensive 
  income for the period              -          -          -         2,341     2,341 
 
 Transactions with 
  owners: 
 Issue of shares                 3,819          -          -             -     3,819 
 Treasury shares acquired            -      (201)          -             -     (201) 
 Treasury shares sold                -        257          -             -       257 
 Share-based payments                -          -          -             -         - 
 
 Group balance at 31 
  December 2020 and 
  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 
                             =========  =========  =========  ============  ======== 
 
 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 
                                             Six months ended        Year ended 
                                                           30-Jun   31 December 
                                             30-Jun          2020          2020 
                                               2021     Unaudited       Audited 
                                          Unaudited    (Restated)    (Restated) 
                                            US$'000       US$'000       US$'000 
-------------------------------------   -----------  ------------  ------------ 
 Cash flow from operating activities 
 Profit/(Loss) before taxation                (271)         (698)         1,643 
 Adjustments for: 
 Finance income                               (673)         (668)       (1,336) 
 Finance expense                                259           179           442 
 Exchange (gain)/loss                          (58)            19         (197) 
 Fair value changes on unquoted 
  financial assets at fair value 
  through profit or loss                      (566)         (511)       (5,923) 
 Share-based expenses                             -             -           479 
 Decrease in other receivables                 (16)           398           992 
 (Decrease)/Increase in other 
  payables and accruals                        (15)       (1,072)           202 
                                        -----------  ------------  ------------ 
 
 Net cash used in operating 
  activities                                (1,340)       (2,353)       (3,698) 
                                        -----------  ------------  ------------ 
 
 Cash flow from investing activities 
 Purchase of unquoted financial 
  assets at fair value through 
  profit and loss                                 -         (207)         (207) 
 
 Net cash (used in)/generated 
  from investing activities                       -         (207)         (207) 
                                        -----------  ------------  ------------ 
 
 Issue of Shares                                                -         2,367 
 Sale of treasury shares                          -             -           257 
 Purchase of treasury shares                      -             -         (201) 
 Proceeds from loans and borrowings               -         1,720         1,720 
 Payment of interest on loans 
  and borrowings                              (228)         (245)         (476) 
                                        -----------  ------------  ------------ 
 Net cash (used in)/generated 
  from financing activities                   (228)         1,475         3,667 
                                        -----------  ------------  ------------ 
 Net (decrease)/increase in 
  cash & cash equivalents during 
  the period                                (1,568)       (1,085)         (238) 
 Cash and cash equivalents and 
  net debt at the beginning of 
  the period                                  4,093         4,275         4,275 
 Foreign exchange on cash balances               35             -            56 
 Cash & cash equivalents and 
  net debt at the end of the 
  period                                      2,560         3,190         4,093 
                                        ===========  ============  ============ 
 

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 20 September 2021.

   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 2021 are the same as those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2020 and are those the Group expects to apply into financial statements for the year ending 31 December 2021.

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 
                                        2021      2020          2020 
                                      US$000    US$000        US$000 
 
 Income on unquoted financial 
  assets                                 575       525         1,137 
 Financial income on loans 
  & receivables                          673       668         1,336 
 
 Gross portfolio income                1,248     1,192         2,473 
                                   ---------  --------  ------------ 
 
 Expected credit loss provision            -     (322)         (529) 
 Other provisions                          -         -         (250) 
 Foreign exchange                         48      (14)           215 
 Equity fair value adjustments             -         -         4,831 
 
 Portfolio income through 
  profit or loss                       1,296       857         6,740 
                                   ---------  --------  ------------ 
 
 Net assets: 
 
 FMHL                                 50,696    45,263        50,400 
 Meize                                 8,201     8,201         8,200 
 GCCF                                  2,745     2,745         2,745 
 DocDoc                                2,491     2,301         2,395 
 ICG                                   2,522     2,207         2,346 
 Infinity TNP                          7,320     7,320         7,320 
 Other                                    16        17            17 
                                   ---------  --------  ------------ 
 Unquoted assets at fair 
  value through profit or 
  loss                                73,991    68,054        73,423 
 
 Loans and other receivables 
  at fair value through the 
  profit or loss (third party)        34,681    33,691        33,970 
 Cash                                  2,560     3,190         4,093 
 Liabilities                         (5,051)   (4,699)       (5,034) 
 
 Net assets                          106,181   100,236       106,452 
 

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 
                                         2021      2020          2020 
                                       US$000    US$000        US$000 
 
 Income on unquoted financial 
  assets through profit or 
  loss                                    575       525         1,137 
 
 Equity fair value adjustments: 
 
        *    FMHL                           -         -         4,831 
 
        *    ICG                            -         -             - 
                                    ---------  --------  ------------ 
                                            -         -         4,831 
 Expected credit loss provision: 
            - ICG                                     -          (62) 
 Foreign exchange on unquoted 
  financial assets at fair 
  value through profit or 
  loss                                    (9)      (14)            17 
 
 Total fair value changes 
  on financial assets at 
  fair value through profit 
  or loss                                 566       511         5,923 
                                    =========  ========  ============ 
 
   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 2021 (30 June 2020: 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 
                                                               2021      2020          2020 
                                                             US$000    US$000        US$000 
 
 Numerator 
 Basic/Diluted:        Net profit/(loss)                      (271)     (698)         1,643 
                                                          ---------  --------  ------------ 
 
                                                                   Number of shares 
                                                               '000      '000          '000 
 Denominator 
 Basic:                Weighted average shares              115,278   101,618       105,518 
  Dilutive effect of warrants                                     -         -        17,568 
 
 
 Diluted:              Adjusted weighted average shares     115,278   101,618       123,086 
                                                          ---------  --------  ------------ 
 
 Earnings per share 
 Basic (cents)                                               (0.24)    (0.69)          1.56 
 Diluted (cents)                                             (0.24)    (0.69)          1.34 
 
 

For the six months ended 30 June 2021 and 2020, the warrants issued to the Investment Manager are anti-dilutive and therefore there is no impact on the weighted average shares in issue.

   8.        UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 
 
                                   30 June   30 June   31 December 
                                      2021      2020          2020 
                                    US$000    US$000        US$000 
 
 At the beginning of the period     73,423    67,172        67,172 
 Fair value changes through 
  profit and loss                      568       544         5,975 
 Expected credit loss provision 
  through profit and loss                -         -          (62) 
 Additions                               -       182           264 
 Reclassification                        -       156           156 
 Payment of cash interest                -         -          (81) 
 
 At the end of the period           73,991    68,054        73,423 
                                  ========  ========  ============ 
 
 
   9.      LOANS AND OTHER RECEIVABLES AT FAIR VALUE THROUGH PROFIT OR LOSS 
 
                                    30 June   30 June        31 December 
                                       2021      2020    2020 (Restated) 
                                     US$000    US$000             US$000 
 
 At the beginning of the 
  period                             33,970    33,516             33,516 
 Additions                                -       364                 64 
 Reclassification                         -     (156)              (156) 
 Fair value changes through 
  profit and loss                        38      (33)              (324) 
 Expected credit loss provision 
  through profit and loss                 -         -              (467) 
 Finance income on loans                673         -              1,337 
 
 At the end of the period            34,681    33,691             33,970 
                                   ========  ========  ================= 
 
 
                               Note                                          31 December 
                                      30 June                 30 June               2020 
                                         2021         2020 (Restated)         (Restated) 
                                       US$000                  US$000             US$000 
 
 Loans                                 29,081                  27,820             28,408 
 Other receivables               14     5,600                   5,442              5,562 
 Amounts receivable from                    -                     429                  - 
  related parties 
 
 Total loans and borrowings            34,681                  33,691             33,970 
                                     ========       =================       ============ 
 

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 determined that an ECL allowance is required in respect of accrued cash interest relating to its fixed interest credit investment. The breakdown of Loans is as follows:

 
                                      30 June   30 June   31 December 
                                         2021      2020          2020 
                                       US$000    US$000        US$000 
 
 Loan principal                        26,500    26,500        26,500 
 Accrued PIK interest                   1,408       860         1,132 
 Accrued interest payable in 
  cash                                  1,877     1,019         1,480 
                                     --------  --------  ------------ 
 
 Gross loans receivable                29,785    28,379        29,112 
                                     --------  --------  ------------ 
 
 Lifetime ECL allowance recognised      (704)     (559)         (704) 
 
 Net loans receivable                  29,081    27,820        28,408 
                                     ========  ========  ============ 
 
 
                                    30 June   30 June   31 December 
                                       2021      2020          2020 
                                     US$000    US$000        US$000 
 
 At the beginning of the period         704       237           237 
 ECL allowance charged to profit 
  or loss                                 -       322           467 
 
 
 At the end of the period               704       559           704 
                                   ========  ========  ============ 
 
   10.      LOANS AND BORROWINGS 
 
                               30 June   30 June   31 December 
                                  2021      2020          2020 
                                US$000    US$000        US$000 
 Corporate debt                  3,536     3,472         3,504 
 
 Total loans and borrowings      3,536     3,472         3,504 
                              ========  ========  ============ 
 

The movement in loans and borrowings is as follows:

 
                                  30 June   30 June   31 December 
                                     2021      2020          2020 
                                   US$000    US$000        US$000 
 Opening balance                    3,504     1,909         1,909 
 Proceeds from issue of loan 
  notes                                 -     1,720         1,720 
 Termination of lease                   -      (34)          (34) 
 Capitalised borrowing costs            -      (57)          (57) 
 Borrowing costs amortised             32        24            56 
 Interest expense accrued             228       155           386 
 Payment of interest liability      (228)     (245)         (476) 
 
 Closing balance                    3,536     3,472         3,504 
                                 ========  ========  ============ 
 
   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 2020                            101,755,422   144,413 
 
 Sale of treasury shares                       1,264,000       257 
 Purchase of treasury shares                   (595,000)     (201) 
 Share issue - open offer and placement        8,356,663     2,699 
 Share issue - HCIL incentive fees             4,496,784     1,453 
 Share issue costs                                     -     (333) 
 
 Authorised, called-up and fully paid 
  ordinary shares of no-par value each 
  at 31 December 2020 and at 30 June 2021    115,277,869   148,288 
                                            ------------  -------- 
 
 
 Consisting of: 
 Authorised, called-up and fully paid 
  ordinary shares of no-par value each 
  at 30 June 2021                            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 2021                               (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 
                                     30 June            30 June                   As at 
                                        2021               2020             31 December 
                                                     (Restated)         2020 (Restated) 
                                     US$'000            US$'000                 US$'000 
 
 Unquoted financial assets 
  at fair value                       73,991             68,054                  73,423 
 Loans at fair value                  29,081             27,820                  28,408 
 Other receivables at fair 
  value                                5,559              5,831                   5,536 
 Cash and cash equivalents 
  at amortised cost                    2,560              3,190                   4,093 
                                   ---------  ---  ------------  ---  ----------------- 
 
 Financial assets                    111,191            104,895                 111,460 
                                   =========  ===  ============  ===  ================= 
 

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                1,515      1,227          1,530 
 Corporate debt at amortised 
  cost                             3,536      3,472          3,504 
                               ---------  ---------  ------------- 
 
 Financial liabilities             5,051      4,699          5,034 
                               =========  =========  ============= 
 

The Corporate Bond has a remaining term of over 1 year, due for repayment in October 2022. 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 
                                                               30 June         31 December 
                                              As at               2020                2020 
                                            30 June         (Restated) 
                                               2021                             (Restated) 
                                             US$000             US$000              US$000 
 
 Level 3 
 Unquoted financial assets at 
  fair value                           8     73,991             68,054              73,423 
 Loans at fair value                   9     29,081             27,820              28,408 
 Other receivables at fair value    9,14      5,559              5,831               5,536 
 
                                            108,631            101,705             107,367 
 
 

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 
                                                            2021      2020          2020 
                                                Notes     US$000    US$000        US$000 
 
 Remuneration payable to Directors                           159       122           256 
 
 Harmony Capital 
 Management fee                                  (i)         914       900         1,888 
 Incentive fee                                                 -        40         1,750 
 
 Amount due to Harmony Capital at period end               1,289       974         1,289 
 
 

(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 excessed 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.      PRIOR YEAR ERROR 

In the previous financial year, cash held on account by investment brokers was presented as part of the other receivables balance. This was an error, as the balances were held for the purposes of meeting short term cash commitments rather than for investment. The broker accounts were not subject to restrictions and were readily convertible into cash at short notice. Therefore, the accounts met the definition of cash equivalents detailed in the Company's accounting policies and should be reclassified from loans and other receivables to cash and cash equivalents. The impact of the restatement at the beginning and the end of the prior period is as follows:

 
                                  (Reported)          (Restated)                         (Restated) 
                                                                                          1 January 
                                 31 December         31 December        1 January              2020 
                                        2020                2020             2020            US$000 
                                      US$000              US$000           US$000 
 
 Loans and other receivables 
  at fair value through 
  profit or loss                      34,390              33,970           33,720            33,516 
 
 Cash and cash equivalents             3,673               4,093            4,071             4,275 
 
 
   15.      EVENTS AFTER THE REPORTING PERIOD 

The Management Team at the Quarry is in late stage discussions for a large off-take agreement for a construction project that is underway.

   16.      COPIES OF THE INTERIM REPORT 

The interim report is available for download from www.jaderoadinvestments.com.

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IR EAKNEAELFEEA

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September 20, 2021 02:07 ET (06:07 GMT)

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