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| Wednesday, 11 August 2010, 09:35 HKT/SGT | |
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Source: China Trends | |
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HONG KONG, Aug 11, 2010 - (ACN Newswire) - China Trends Holdings Limited ("China Trends", Stock Code: 8171.HK), the company focuses on energy-saving digital product solutions, today announced its H1 2010 results for the periods ended 30 June 2010.
Financial Performance Review
During the reported period, China Trends recorded a turnover of approximately HK$24,738,000 (2009: HK$25,027,000), representing a decrease of approximately 1.15% as compared to that of previous period. Loss attributable to owners of the Company for H1 2010 was approximately HK$ 3,869,000 (2009: HK$ 5,526,000), while basic loss per share attributable to owners of the Company amounted to 0.47 cents (2009: 0.80 cents). The directors do not recommend the payment of an interim dividend.
For the three months ended 30 June 2010, the Company recorded a turnover of approximately HK$ 13,342,000 (2009: HK$15,756,000), representing a decrease of approximately 15.32% as compared to that of previous period. Loss attributable to owners of the Company was approximately HK$ 1,959,000 (2009: HK$ 3,575,000), while basic loss per share attributable to owners of the Company amounted to 0.24 cents (2009: 0.52 cents)
Operation Review
On 30 September 2009, the Group entered into a sale and purchase agreement with an independent third party to acquire the copyright of film libraries ("Copyright Acquisition") at a consideration of HK$25,000,000, which will be financed by a refundable deposit ("Deposit") paid by the Group in October 2008 upon completion of the acquisition. The deposit was interest-free. Trademarks under the Copyright Acquisition will be transferred to the Group from the vendor at nil consideration upon completion. The acquisition is subject to and conditional upon shareholders' approval. A circular setting out the details of the acquisition will be sent to shareholders by the Group in due course.
On 10 December 2009, the Group entered into a sale and purchase agreement (the "Agreement") with an independent third party (the "Vendor"), pursuant to which, the Group agreed to acquire the entire issued share capital of Nopo International Limited (according to a distribution agreement, the company is principally engaged as a product agent of a mobile location-based service provider in the PRC and as a sole franchised dealer in overseas markets) ("Nopo Acquisition"), at a consideration of HK$19,493,000. At the time of signing the agreement, the Group has made the payment of an interest-free refundable deposit of HK$1,993,000 to the Vendor. Nopo Acquisition was completed on 22 January 2010. The remaining balance of the consideration in the amount of HK$17,500,000 has been paid by the Group by way of issuing 140,000,000 Consideration Shares at an issue price of HK$0.125 per share.
On 15 June 2009, the Group entered into a sale and purchase agreement (supplemented by two deeds of transfer and novation dated 30 September 2009 and 1 December 2009 respectively) with Mr. Yu Shu Kuen ("Mr. Yu"), (i) to dispose the entire issued share capital of Ace Solution Technology Limited ("Ace Solution"); and (ii) the shareholder loans owed by Ace Solution to the Company, at a consideration of HK$1. The transaction constituted a very significant disposal for the Group under the GEM Listing Rules, and was completed on 5 February 2010. Ace Solution and its subsidiaries (the "Disposal Group") are no longer subsidiaries of the Group. The results of the Disposal Group will no longer be combined into the Group's consolidated accounts.
On 28 April 2010, the Group announced that it proposed to issue a total of 3,374,958,000 rights shares by way of rights issue at a subscription price of HK$0.04 per rights share on the basis of four nil-paid rights shares for every existing share held. The right issue was completed on 30 June 2010, and an amount of approximately HK$13,499,800 (before expenses) was raised.
On 7 May 2010, the Group entered into a non-binding cooperative framework agreement with Shenzhen Nopo Electronic Commerce Co., Ltd, pursuant to which, the Group conditionally agreed to purchase the CEM bonus points redemption platform and the related assets with a capacity of 10 million subscribers from Nopo Electronic Commerce, at a consideration which is determined to be not more than HK$50,000,000 for the time being. The consideration will be satisfied in cash, or by the issue of notes or loan notes, consideration shares, convertible bonds and/or other financial instruments by the Group at an issue price or conversion price of HK$0.28 per share (subject to adjustment if the rights issue is completed). The actual method of payment is to be confirmed by the Group and Nopo Electronic Commerce through further negotiations.
On 14 May 2010, the Group entered into a non-binding cooperative framework agreement with Yu Tone Industrial Investment Limited ("Yu Tone Industrial"), under which, the Group conditionally agreed to acquire the entire equity interest in Yu Tone Industrial and to become its sole shareholder, with a condition precedent that Yu Tone Industrial will, after the completion of its restructuring, wholly own Guangdong Yu Tone Development Limited - a company having more than 10,000 square meters of commercial ground floor and extensive operation and sales channels of electronic products in Guangzhou business district. The consideration will be satisfied in cash, or by the issue of notes or loan notes, consideration shares, convertible bonds and/or other financial instruments by the Group at an issue price or conversion price of HK$0.28 per share (subject to adjustment if the rights issue is completed). The actual method of payment is to be confirmed by the Group and Yu Tone Industrial through further negotiations.
On 28 May 2010, the Group entered into a non-legally binding cooperative framework agreement with Joy China Group Limited ("Joy China"), under which, the Group agreed conditionally to purchase Joy China's large volume advertising broadcasting platform making use of internet and 3C as the media and terminal and having a capacity of not less than 10 million subscribers. The consideration will be satisfied in cash, or by the issue of notes or loan notes, consideration shares, convertible bonds and/or other financial instruments by the Group at an issue price or conversion price of HK$0.28 per share (subject to adjustment if the rights issue is completed). The actual method of payment is to be confirmed by the Group and Joy China through further negotiations.
On 3 June 2010, the Group entered into a cooperative framework agreement with Grand Business (Beijing) Educational and Cultural Development Company Limited, whereby the Group and Grand Business will establish a cooperation relationship. Grand Business is in the process of establishing its multi-media education platform. It is responsible for promotion and publication, operation and investment promotion and allowing suitable working partners to form an alliance. The Group will provide energy-saving computers and project-related solutions to Grand Business to implement its multi-media education platform by mean of energy management contract. It is targeted to build 10,000 education platforms with the alliance partners within three years in the PRC.
On 7 June 2010, the Group and China Innovation Investment Limited ("China Innovation", stock code: 1217.HK) jointly announced that Boss (China)Information Systems Limited, a subsidiary of the Group, Dooda Innovation (China) Technology Development Limited under China Innovation and Huizhou TCL Lighting Appliance Technology Limited under TCL Group (A share code: 000100) entered into a strategic cooperative framework agreement. The three parties plan to establish a strategic cooperation for research and development, production and marketing of energy-saving LED products, in particular by mean of energy management contract, in order to achieve mutually reciprocal benefits and the sharing of resources.
On 8 June 2010, the Group and Industrial and Commercial Bank of China Limited Shenzhen Xinghe Branch ("ICBC") entered into a cooperative framework agreement in order for it to provide the Group project financing on energy management contract business, including project loans and factoring services, and also provide the Group the guidance on project financing, rationalization of application and approval procedures.
On 17 June, 2010, the Group, New Times Global Investment Limited and Ningbo Sunbay Development Co., Ltd. entered into a cooperative framework agreement, whereby three parties establish possible cooperation to develop the Sunbay Marina (Low Carbon Tourism) Project. The Group intends to extend its energy management contract business to the low-carbon tourism development. In addition, the Group's shareholders may qualify for preferential scheme when purchasing any property available for sale in the Sunbay Marina (Low Carbon Tourism) Project.
On 22 June 2010, the Company and Beijing Hui Likang Hi-Tech Company Limited entered into a cooperative framework agreement, whereby it is intended to build up 20,000 children wisdom groups in major cities in the PRC in order to further extend its business of energy management contract to children's market.
On 29 June 2010, the Group and China Innovation jointly announced that, China Trends, China Innovation and China Oriental Numerical Control Company Limited, China Oriental Numerical Control, a subsidiary of CNIGC, entered into a cooperative letter of intent, whereby three parties propose to establish cooperation for operation and marketing by mean of contract energy management in relation to the application of new energy numerical control system on solar electric vehicles.
Outlook
The Group principally engaged in developing digital product solutions, including the existing business of mobile product solutions, as well as energy-saving applications for digital products.At the beginning of 2008, the Group established overall co-operation with China Innovation and Chi Mei Optoelectronics Corporations (3009.tw) relating to LED products and technologies.
In order to attain the above-mentioned strategic objective, the Group will undergo research and development, and application through merger and acquisition.The energy-saving solutions for digital industry make use of the energy management contract (CEM) and BOT mechanism which ultimately would apply to different sectors in the society. With the transfer of turnover from traditional products sales to CEM services, the Group believes the switch would enhance the earnings.
According to the CEM made between the Group and the clients, the commercial operating model provides a set of energy saving services, project financing, engineering construction, and related services to the clients in a contract of five years. The Group will then realize its investment return and profit by sharing relevant percentage of the energy saving efficiency realised by the clients' energy saving measures.
The first stage for the Group's CEM product would be "all-in-one energy-saving computer", which can save approximately 90% of energy compared with the traditional laptop computer, and the Group owns the intellectual property.
Contact:
Carmen Lee
Investor Relationship Department
China Trends Holdings Limited
Email: carmen.lee@8171.com.hk
Tel: +852 2111 9988
Direct: +852 2155 6275
Mobile: +852 6301 6611
Fax: +852 2111 9989
Topic: Press release summary
Source: China Trends
Sectors: Daily Finance
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