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DFH Announces 2017 Interim Results Record Sustained Growth in Turnover and Profit

Addtime:2017-08-23   Author:DFH

Continuously Diversifies Business Portfolio

Actively Explores Cooperation Opportunities

To Further Reinforce its Leading Position in the Industry

 

Financial Highlights

 

For the Six Months Ended 30 June

RMB’000

2017

2016

Change

Turnover

151,993

132,880

+14.4%

Overview of Major Businesses

 

 

 

Asset Management Services

51,918

34,433

+50.8%

Finance Lease Services

30,839

22,792

+35.3%

Financial Services

31,781

15,512

+104.9%

Express Loan Services*

34,437

54,136

-36.4%

Guarantee Services

3,018

6,007

-49.8%

Profit

80,024

75,263

+6.3%

Basic Earnings Per Share (RMB cents)

1.74

1.68

+3.6%

*Including entrusted loan services, money lendingservices and pawn loan services (pawn loan services has been disposed on 24June 2016)

 

(Hong Kong, 21 August 2017) – DifferGroup Holding Company Limited (“DFH” or the “Group”) (stock code: 6878), aleading provider of short- to medium-term financing and financing-relatedsolutions in the PRC, has announced its unaudited interim results for the sixmonths ended 30 June 2017 (the “Period”).

 

Benefiting from the robust income growth of its asset management,finance lease and financial services businesses, the Group’s turnover increasedby 14.4% to approximately RMB152.0 million, profit for the Period rose to approximatelyRMB80.0 million and basic earnings per share climbed to RMB1.74 cents.

 

The Group maintained a healthy financial position with a 26.4% gearingratio. As at 30 June 2017, it had total cash and bank balances (includingrestricted bank deposits) of approximately RMB116.0 million.

 

Mr. Hong Mingxian, Chairman andExecutive Director of DFH,said, “Amidst the transformation and upgrade process of the Chinese economy, theGroup has implemented a diversified strategy so as to capture the opportunitiesin the industry, adjusted its development focus and concentrated on thebusinesses with greater profitability and higher sustainability, such as assetmanagement and finance lease businesses, and strive to achieve sustainablegrowth with a flexible business model.”

 

 

Business Review

Asset Management Services

To capture the opportunities presented by abundantasset in Fujian Province, the Group has continued to expand the assetmanagement business, and actively looking for quality asset which could potentiallyoffer high-percentage returns. During the Period, the income from assetmanagement services surged by 50.8% to approximately RMB51.9 million, mainlydue to the fact that more obligors of non-performing loans settled the debtsand the Group received dividend income from its equity investments. Theincrease also demonstrated that the Group has extended its disposal ofdistressed asset from immovable property to other asset class given the factthat no property was disposed during the period.

 

Finance Lease Services

Following the acquisition of Jiashi InternationalFinancial Limited and its subsidiaries (“Jiashi Group”) in late October 2015,the Group further developed its finance lease business. Apart from the financelease business for machineries, distant marine fishing vessels and car leasingto individuals, the Group has started its finance lease business for propertiesin late 2016 and has commenced its finance lease business in Hong Kong in thefirst half of 2017. Income increased by 35.3% to approximately RMB30.8 millionin relation to the finance lease business in Hong Kong.

 

Financial Services

The Group has mainly focused on financial servicesthat charge customers based on a certain percentage of the amount of financingobtained as a result of consultation. During the Period, the income fromfinancial services soared by 104.9% to RMB31.8 million assisted by the PRCgovernment encouraging the banks to support the SMEs, which often havedifficulty in obtaining bank loans. Thus in the first half of 2017, it has becomeeasier for SMEs to obtain loans from PRC banks. This in turn has led to theincrease of the amount and the successful rate of financing obtained from banksby the Group’s customers.

 

Express Loan Services

The Group has continued to expand the Hong Kong money lending businessin 2017 and has also provided short-team financing to customers in the PRC. Forthe sake of stability, the Group took a moreprudent approach and preferentially granted loans to customers with decentcredit histories during the economic downturn, and lowered the interest ratesaccordingly. Moreover, in order to focus on the businesses with greaterprofitability and higher sustainability, the Group retained capital for furtherexpanding its asset management business, and a certain amount of cash was usedin redeeming the convertible bonds of US$30 million. During the Period,affected by the lower average interest rate charges and adjustment in businessstrategy and resource allocation, income from express loan services declined toapproximately RMB34.4 million.

 

Guarantee Services

Since the overall macroeconomic environment has led tomore prominent credit risks, the Group has continued to take a prudent approachtowards vetting the applications of potential customers. As a result, thenumber of guarantee services decreased and income declined by 49.8% to approximatelyRMB3.0 million.

 


 

Outlook

Looking ahead, asset management business and financelease business will continue to be the Group’s key growth drivers. Furthermore,the Group has actively expanded these businesses along with continued toexplore cooperative opportunities with various state-owned / well-knowncompanies. Apart from the formation of Xiamen Chuang Yi Commercial FactoringCompany Limited with state-owned enterprises in late 2016, the Group has cooperatedwith Tsinghua Asset Management in order to further establish an offshore fundfocusing on investments in overseas high-tech projects with good quality andhigh growth. Leveraging on this opportunity and the first-hand resources itcould offer, the Group intends to pave the way for developing to Fintechbusiness. We believe that the close ties forged with these renowned companiescan enable the Group to develop new businesses, broaden the customer base,bolster the competitiveness and expand the geographical coverage of itsbusinesses, therefore generating sustainable growth momentum to further captureenormous opportunities in the market.

 

In the capital markets, the Group has issuedcorporate bonds of approximately HK$141.7 million during the Period. The fundsraised can enhance the Group’s capital base and accelerate the development ofits business. On the other hand, the Group has redeemed convertible bonds ofUS$30 million early in order to increase the flexibility of its business.

 

Mr. Hong concluded, “We will continue to actively grasp theopportunities presented by the rapidly-changing economic environment in thePRC, continue to facilitate the strong development of asset management and financelease services in domestic and overseas. The Group will also explorecooperation plans with different renowned companies at the same time, in a bidto maintain sustainable growth momentum. We are optimistic about our overallbusiness and financial prospects in the future, so we will further seek todevelop new businesses and explore business opportunities in order to broadenour income stream, and maintain our leading position as the preferred choice ofcomprehensive short- to medium-term financing solutions by SMEs, thusmaximising value for our shareholders.”