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China Innovation Announces 2010 Annual Results
Post Date: 24 Mar 2011 Viewed: 585
China Innovation Investment Limited ("China Innovation", Stock Code: 1217.HK), the company focuses on "four new industries", announced its 2010 annual results for the periods ended 31 December 2010.
Financial Performance Review
During the reported period, China Innovation recorded a total revenue of HK$2,848,000 (2009: HK$10,801,000). Profit attributable to owners of the Company was HK$ 3,586,000, while the profit for the corresponding period of 2009 was HK$ 30,739,000. Basic earninGS per share attributable to owners of the Company amounted to 0.05 cents (2009: 0.58 cents). The directors do not recommend the payment of dividend. The decrease in profit was mainly due to the decrease in the gain on fair value change of investment properties, interest income and net realized gains on dISposal of financial assets at fair value through profit or loss and the increase in equity-settled share option EXpenses.
Operation Review
As at 31 December 2010, the Company held investments in four unlisted companies namely Topsun Creation Limited ("Topsun"), Aesthetic Vision Limited ("Aesthetic Vision"), United Century Company Limited ("United Century") and Blue Angel (H.K.) Limited ("Blue Angel"), carrying values of approximately HK$13,527,000 (after impairment provision of HK$4,500,000), HK$15,133,000, HK$51,355,000 and HK$20,002,000 respectively.
On 30 April 2010, the Company entered into a termination agreement with Kenon Holdings Limited, whereby the parties have agreed to terminate the framework agreement in connection to the acquisition of a substantial portion of the issued share capital of C.G.E. (H.K.) Co., Limited ("CGE"), which was mainly attributable to the need of internal reorganization of the shareholdings in CGE. The termination agreement will provide Flexibility to the parties in seeking for further cooperation.
On 7 June 2010, the Company and China Trends Holdings Limited ("China Trends", stock code: 8171.HK) jointly announced that (1) tranSLiterated as Dooda Innovation (China) Technology Development Limited) ("Dooda China"), an investment in the PRC made by the Company, through Dooda Innovation Limited, (2) transliterated as Boss Dream(China) Limited)("Boss China"), a PRC subsidiary of China Trends, and (3) transliterated as Huizhou TCL Lighting Appliance Technology Limited ("Huizhou TCL"), a member of TCL Corporation (the shares of which are listed on The Shenzhen Stock Exchange with stock code: 000100), entered into a strategic cooperation framework agreement to establish strategic cooperation for research and development, production, sales and distribution of energy-saving LED produCTS, in particular areas such as energy management contract ("CEM") mode, in order to gain mutual benefits from sharing resources.
On 29 June 2010, the Company and China Trends jointly announced that the Company, China Trends and (transliterated as China Oriental Numerical Control Company Limited ("China Oriental Numerical Control"), a subsidiary of China North Industries Group Corporation, a state-owned enterprise under the direct adMINIstration of Central Government and is a military organisation authorised by the State, entered into a Letter of Intent to cooperate in areas such as running and marketing of CEM operation mode for applying new energy system on solar electric cars.
On 26 July 2010, Topsun Creation (China) Energy Technology Limited ("Topsun Creation China"), a company held by one of the Company's investment, entered into the Cooperation Agreement with the Venture Partners, pursuant to which Topsun Creation China and the Venture Partners agreed to establish a joint venture in the PRC, with a registered capital of RMB 50,000,000. Topsun Creation China and the Venture Partners will hold 77.5% and 22.5% intereSTS in the joint venture respectively. The joint venture will mainly engage in the production and sale of the materiaLS for the positive electrode of lithium battery business so as to further develop into the lithium battery business for Topsun Creation.
On 15 November, the Company entered into the Equity Interests and Shareholders' Loan Swap Agreement with an independent third party, to swap the 150 A shares and 2,250 B shares it holds in the equity interests of Dooda Innovation Limited ("Dooda Innovation") for the 1,890 B shares that the independent third party holds in the equity interests of Aesthetic Vision Limited ("Aesthetic Vision"). At the same time, the Group will swap the shareholders' loan of Dooda Innovation amounted to HK$51,352,252 for the shareholders' loan of Aesthetic Vision amounted to HK$51,352,252, in order to enhance the strenGTh in "New Light Resources".
Outlook
The Company is one of the few investment companies in Hong Kong focusing investment in military and industrial sectors. We invest in listed and non-listed civil and military joint ventures with high quality to strive for medium-term gains from capital appreciation in the course of securitization of corporate assets invested, and apply the same as our key operation strategy and income source.
Leveraging on our experience and well-connected network in the Mainland market over years, the Company accelerates its pace apparently in investing in military and civil dual-used charge storage batteries, new models of lighting products, eco-equipment materials and energy-saving media terminals respectively through its investment. With energy conservation as our development goal, our investments have achieved breakthrougHS in realizing the military and civil dual-application in real projects.
By investing in the industries of "New Energy", "New Light", "New Materials" and "New Media", our objective in the investment is to form energy conservation solutions integrated with military and civil dual-application technology, such as solar photovoltaic energy, LED lighting, energy conserving materials and energy-saving media terminals, and to introduce innovative products to the market, including solar electric cars, solar energy electronic books and solar energy advertising SCreens.
For "New Energy", the Company invests in Topsun, which adopts the power reserve patent technology of military aviation as its own core to develop the strategy of "Production - Research - Preliminary Research" for the research and manufacturing of solar photovoltaic system. With features of high capacity, fully sealed and maintenance-free, the system is widely used in military equipment and civil vehicles as well as construction, etc. It possesses a large room for growth and enormous development potential in both civil and military markets.
For "New Light", the Company invests in Aesthetic Vision, and was also given with preference to make investment in China Opto-Electro Industries Co., Ltd ("COEI"), a wholly-owned subsidiary of CNGC. Aesthetic Vision's major product is LED lighting. It possesses of LED ergonomics technology with features including LED illuminant, appropriate light flux, free colour temperature, healthy spectrum and compliance to ergonomics. Its products are widely used in military production as well as CIVIC purposes.
For "New Materials", the Company invests in United Crown Century. Being the pioneer in the new energy-saving eco-sheet industry in the PRC market, United Crown Century mainly specializes in research and development of energy-saving eco-sheet materials for walls.
For "New Media", with key investments in "New Energy", "New Light" and "New Materials" as aforesaid, the Company plans to further innovate and apply these three new resources industries. The invested company, Blue Angel, mainly engages in producing and assembly of new products such as solar electric cars, solar energy electronic books and solar energy advertising screens with the use of solar energy and LED technologies, so as to develop a completed industry chain of four new energy and provide a one-stop production setting with synergy effect.
Being dedicated to outline a completed industry chain of four energy conservation, the Company is actively seeking more investment opportunities in new technologies like solar energy and LED, in order to build a greener low-carbon living environment.
