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Announces 2017 Annual Results Profit for the year surged by 20% to approximately RMB171 million Twin Growth Engines – Assets Management Business and Finance Lease Services Create Sustainable Growth

Addtime:2018-04-03   Author:

[28 March 2018, Hong Kong] Differ GroupHolding Company Limited (“DFH” or“Company”, Stock code: 6878) together with its subsidiaries (“Group”), a leading provider of short tomedium-term financing and financing-related solutions in the PRC, is pleased toannounce its annual results for the year ended 31 December 2017 (the “Year”).


During the Year, in order to grasp theopportunities arising from the continued growth of the macro-economy in Chinaand the change in relevant government policies, the Group fine-tuned itsbusiness strategy by concentrating on assets management and finance leaseservices. The result was another year of outstanding performance. In 2017, theGroup’s overall business revenue reached RMB299 million while profitattributable to owners of the Company surged by 18.2% to RMB160.2 million.Basic earnings per share grew to RMB3.78 cents. During the Year, the gearingratio of the Group was 31.8% (2016: 28.2%), continued to be at a healthy levelcompare to its peers.


By expanding its asset management business from non-performing assetsto including value assets, the Group demonstrated its capability of managingassets in multi-classes. This was a significant milestone because it will allowthe Group to tap into a much wider source of acquisition targets and promoteits overall profitability. In November 2017, through the Differ AssetDevelopment Limited, a wholly-owned subsidiary of the Company, acquired theentire issued share capital of Differ Cultural Tourism Development CompanyLimited (“Differ Cultural Tourism Development”) at a consideration of RMB375million with an expected return that will continue for the next 3 to 5 years.Differ Cultural Tourism Development is principally engaged in assetsdevelopment and management. With this acquisition, the Group is now able to notonly develop its NPL business but also to attain mid-and-long term revenue bythe continued development of value assets should management decides that doingso can yield a better return for our shareholders. This is a unique businessmodel, one that the management believe will provide its shareholder’s with asustainable return in the future.

Business Review

Asset Management Services

To capture the opportunities presented byabundant asset in Fujian Province, the Group has continued to expand the assetmanagement business, and actively looking for quality assets which couldpotentially offer high-percentage returns. During the Year, the income fromasset management services surged by 26.7% to approximately RMB118 million. Eventhough the Group did not dispose a single asset during the year, through debtcollection, the team was able to generate such good result, which alsodemonstrated the capability of managing assets in multi-classes. Another reasonfor not disposing any asset during the Year was that the acquisition of DifferCultural Tourism Development by the Group meant that a number of the NPL assetswhich was supposed to be one-off transactions in nature can now be operated forlonger term with much higher profitability.


Finance Lease Services

Following the acquisition of JiashiInternational Financial Limited and its subsidiaries in 2017, the Groupcontinues to develop its finance lease business. Apart from the finance leasebusiness for distant marine fishing vessels and car leasing to individuals, theGroup has started its finance lease business for properties in late 2016.Revenue from finance lease business increased by 27.6% year-on-year to RMB52.8million for the Year (2016: RMB41.4 million).


Financial Services

The Group’s financial services comprises ofexpress loan services, financial consultancy services, supply chainfinancing and guarantee services. During the Year, the Group recorded acombined income of RMB100million, a reduction from approximately RMB120 millionin the year 2016 or a reduction of 19.9%. This was attributable to the factthat the Group decided to focus its resources in its asset management businessand finance leasing business during FY2017.


The combined effect of the actions abovewas that the Group recorded an increase in overall income and profit in 2017compare to 2016.



Mr. HONG Mingxian,Chairman and Executive Director of DFH stated, “After years of operations in theindustry, we believe that we have successfully found a formula for long termsustainable growth and profitability - a business model driven by a combinationof finance leasing and asset management. Our persistent in maintaining ourintegrity in the industry and our conviction in helping local businesses haveearned us the trust by our local partners, clients and stakeholders. Ourfinance leasing business has enjoyed years of success and we believe that itwill continue to thrive. On the other hand, our success in working outnon-performing assets and value-assets demonstrated that we are entrusted withportfolio of assets we can profit from. Some of these assets can utilize theservices provided by our finance lease business. In the future, we plan toinvest more in these areas, further promote the economies of scales betweenthese two businesses and propel our steady long term growth. The Group willcontinue to seek for collaboration with different renowned and/ or state-ownedenterprises. We will also strive to grasp opportunities arising from “One BeltOne Road” policy and the development of our Fintech platform to add newelements and momentum to our current businesses.  Our goal is to maintain sustainable growthand maximize the value to our shareholders.”