– Income from Factoring and Other Services Surges 30.0% to RMB237.5 Million
– Healthy Financial Position and Excellent Factoring Business Performance
– Makes Application to HKEX for Transfer of Listing to Main Board to Seize Future Opportunities
Sheng Ye Capital Limited (“Sheng Ye Capital” or the “Group”; Stock code: 8469), a specialised enterprise financial services provider offering accounts receivable financing and other related solutions mainly in the energy, construction and medical sectors in the PRC, has today announced its interim results for the six months ended 30 June 2019 (the “Review Period” or “1H 2019”).
The Group continued to record encouraging results in 1H 2019, with income from factoring and other services amounting to approximately RMB237.5 million (1H 2018: RMB182.7 million), representing an increase of approximately 30.0%. The increase was mainly attributable to an expanded factoring business that was supported by a major portion of proceeds generated from the placing exercise conducted in July 2018 as well as bank and other borrowings. The Group’s profit before taxation increased by 46.7% to approximately RMB160.2 million (1H 2018: RMB109.1 million). Profit after taxation also climbed by 67.0% to RMB124.9 million (1H 2018: RMB74.8 million). Basic earnings per share were RMB14 cents (1H 2018: RMB10 cents).
Notwithstanding the slowdown of the global and PRC economies, the Group managed to raise additional working capital for expanding the factoring operation through shares placing, borrowing and bond issuance. The Group’s revenue in 1H2019 increased by approximately 52.3% to RMB201.6 million (1H 2018: RMB132.4 million). In order to improve cash flow as well as to more effectively manage the Group’s factoring receivables portfolio and fund the factoring business, the Group sold the rights of factoring assets and recorded revenue of approximately RMB35.9 million (1H 2018: RMB50.3 million) from the sales of factoring assets, providing financing support to the factoring business.
Business Review
Sheng Ye Capital has positioned itself as a specialised enterprise financial services provider offering accounts receivable financing and other related solutions to the energy, construction and medical sectors in the PRC. The Group has also sought to strategically expand its factoring service customer base, comprising small and medium-sized enterprises that are suppliers of state-owned enterprises and large enterprises in the abovementioned three sectors. During the Review Period, the Group provided these customers with funds secured by, among others, their accounts receivable, and also offered them accounts receivable management services, including review and verification of documents relating to the accounts receivables, collection of accounts receivable on behalf of customers, and regular reporting to customers on matters concerning their accounts receivable. The Group received interest income and professional fees for the services rendered and also derived income from the sale of rights of the factoring assets.
The Group’s online factoring platform “Easy Factoring” linked up with the enterprise credit reporting system of People’s Bank of China, following which stringent risk supervision will be conducted. This will include examining the background of co-operating enterprises, such as their operation status and credit record, and also implementing risk control on overdue situation as well as examining and verifying customers’ asset information.
Besides, SY Factoring Limited, a subsidiary of the Group, also signed a strategic co-operative agreement with a financial asset trading platform in the PRC, which will combine the strengths of the two parties, leading to resource and system integration and information sharing.
The Group has been diversifying its financing channels and has achieved notable results. The signing of banking facility agreements with a number of banks this year has also helped the Group to implement an inclusive financial strategy that is promoted by the country.
The Group was included as one of the constituents of MSCI China All Shares Small Cap Index in 2018, demonstrating the widespread recognition that it enjoys for its financial position and business development. The Group believes the inclusion in the Index will enable it to draw greater attention from investors. On the other hand, Sheng Ye Information Technology Service (Shenzhen) Co., Limited, another subsidiary of the Group, was named “National High and New Technology Enterprise” and “Shenzhen High and New Technology Enterprise” by Shenzhen Municipal Tax Service, State Administration of Taxation, Science and Technology Innovation Committee of Shenzhen Municipality and Finance Commission of Shenzhen Municipality.
Prospects
The Group listed on GEM of Hong Kong Exchanges and Clearing Limited (“HKEX”) in 2017, making it the first and only factoring company from the PRC to list in Hong Kong. The listing status and funds raised have undoubtedly enhanced the Group’s brand image, financial position and competitive strength. On 30 April 2019, the Group made an application to HKEX for the transfer of its listing to the Main Board. It considers that the transfer of listing will help raise investors’ awareness and acceptance of the “Sheng Ye Capital” brand and enable it to gain access to more efficient financing channels both locally and abroad to support business growth.
Looking ahead, the Group will continue to focus on the construction, energy and medical sectors and expand its clientele and factoring assets. With its advanced online factoring platform “Easy Factoring” and professional risk management mechanism, the Group will be able to offer financial products, customised solutions and also integrated factoring services including account receivable financing, account receivable management services and credit evaluation to customers, helping them secure funding during different stages of their development. Meanwhile, the Group will continue to raise its core competitiveness and advance its risk management mechanism and IT system, as well as to explore new and relatively low-cost financing channels so as to drive sustainable business growth in the most cost-effective manner.
About Sheng Ye Capital Limited (Stock code: 8469)
Sheng Ye Capital Limited is a specialised enterprise financial services provider offering accounts receivable financing and other related solutions mainly in the energy, construction and medical sectors in the PRC. It has a strong capital base with its principal operating subsidiary in the PRC having a registered capital of US$100 million. The Group was included as one of the constituents of MSCI China All Shares Small Cap Index in 2018. For more information about Sheng Ye Capital, please visit: http://www.shengyecapital.com/.
Media Enquiries
Strategic Financial Relations Limited
Iris Lee Tel: (852) 2864 4829 Email: iris.lee@sprg.com.hk
Katrina Leung Tel: (852) 2864 4857 Email: katrina.leung@sprg.com.hk
Queenie Chan Tel: (852) 2864 4851 Email: queenie.chan@sprg.com.hk
Fax: (852) 2527 1196
