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HONG KONG, Mar 29, 2011 - (ACN Newswire) - China Trends Holdings Limited ("China Trends", Stock Code: 8171.HK), the company focuses on energy-saving digital industry applications, announced its 2010 financial results for the periods ended 31 December 2010, which the loss has narrowed down comparing with the same period in 2009.
Financial Performance Review
During the reported period, China Trends recorded a turnover of HK$37,108,000 (2009: HK$51,183,000). Loss attributable to owners of the Company was HK$8,813,000 (2009: HK$49,774,000). Basic loss per share attributable to owners of the Company amounted to 0.24 cents (2009: 6.29 cents). The directors do not recommend the payment of dividend.
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 at a consideration of HK$25,000,000, which was financed by a refundable deposit already paid by the Group to the independent third party. The deposit was interest-free. The Copyright Acquisition was completed by late September 2010. Trademarks under the Copyright Acquisition would be transferred to the Group from the vendor at nil consideration afterward upon completion.
On 10 December 2009, the Group entered into a sale and purchase agreement with an independent third party, 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), 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, (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 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 8 July 2010, and an amount of approximately HK$134,998,000 (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., ("Nopo Electronic Commerce"), 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. However, given that the business features under the project cooperative agreement dated 9 November 2010 is sufficient to support the energy management contract business of the Group, the Board decided that the above cooperative framework agreement would not be proceeded.
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 ("Guangdong Yu Tone") - 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. However, given that the business features under the project cooperative agreement dated 9 November 2010 is sufficient to support the energy management contract business of the Group, the Board decided that the above cooperative framework agreement would not be proceeded.
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. However, given that the business features under the project cooperative agreement dated 9 November 2010 is sufficient to support the energy management contract business of the Group, the Board decided that the above cooperative framework agreement would not be proceeded.
On 3 June 2010, the Group entered into a cooperative framework agreement with Grand Business (Beijing) Educational and Cultural Development Company Limited ("Grand Business"), 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, ("Boss China"), a subsidiary of the Group, Dooda Innovation (China) Technology Development Limited ("Dooda China") under China Innovation and Huizhou TCL Lighting Appliance Technology Limited ("Huizhou TCL") 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 ("New Times Global Investment") and Ningbo Sunbay Development Co., Ltd., ("Ningbo Sunshine") 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 Group and Beijing Hui Likang Hi-Tech Company Limited ("Beijing Hui Likang") 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 energy management contract in relation to the application of new energy numerical control system on solar electric vehicles.
On 12 July, 2010, the Group has, through Asian Capital (Corporate Finance) Limited ("Asian Capital (Corporate Finance)"), informed the board of directors of C Y Foundation Group Limited ("C Y Foundation", stock code: 1182.HK), that the Group is contemplating making the Possible Offer, subject to the approval of the shareholders of the Group. Subsequently, C Y Foundation informed the Group that C Y Foundation intended to conduct fund raising exercise, and the Group required C Y Foundation to provide the further details in respect of proposed fund raising accordingly. As of 7 September, however, the board of directors of the Group has noticed from the media report that there might be certain possible regulatory issues relatin to C Y Foundation and/or its certain directors/shareholders and the trading in shares of C Y Foundation was suspended since 31 August 2010 pending the release of an announcement in relation to information which is price sensitive in nature. As such, the board of directors has decided not to proceed with the Possible Offer.
On 9 November 2010, Boss China (currently renamed as Boss Dream(China) Limited), a subsidiary of the Group in the PRC entered into a project cooperative agreement with an independent third party to commence exclusive cooperation on the joint construction and operation of online education platform, video production platform, reward redemption platform and advertisement broadcasting platform.
On 29 December 2010, the Group entered into a cooperative framework agreement with two independent third parties to build the 10,000 education platforms with the alliance partners in mainland China for promoting the programs of Need Education Program Office ("Need Education").
Outlook
The Group is principally engaged in developing the energy-saving applications for digital products. The applications mainly make use of the energy management contract (CEM) and BOT mechanism which would ultimately 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 three to 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.
The Group has already entered into cooperative agreements with different parties, to further promote the CEM operations into diversified aspects, like online education platform, video production platform, reward redemption platform and advertisement broadcasting platform.
In fact, China Trends raised approximately HK$135 million before expenses by way of the Rights Issue in end-June last year, which is the strategy to further strengthen the CEM business.
The Company's directors and management will dedicate their best effort to lead the Group to strive for the best interests for its shareholders.
Contact:
China Trends Holdings Limited
Carmen Lee
Investor Relationship Department
Email: carmen.lee@8171.com.hk
Tel: +852 2111 9988
Direct: +852 2155 6275
Mobile: +852 6301 6611
Fax: +852 2111 9989
Topic: Earnings
Source: China Trends
Sectors: Daily Finance
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From the Asia Corporate News Network
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