The first half saw total revenue of RMB179.3 billion, representing a 15 per cent increase year-on-year, which continued a trend of steady growth for the fifth consecutive reporting period since 2017.
In particular, this was thanks to the performance of strategic investments, most notably in IT, where revenue increased to RMB163,998 million, up 14 per cent compared with the same period last year, and in financial services, which achieved a 119 per cent year-on-year gain in revenue.
The figures for the agriculture and food segment were also impressive, with improvements in Joyvio Group’s fruit and animal protein businesses leading to 17 per cent overall revenue growth for the reporting period. And elsewhere, investment income and gains from the group’s financial investment segment rose to RMB1,290 million from the RMB469 million recorded for the first half of 2018.
This was achieved at a time when changes in the external environment, particularly with regard to domestic financing, interest rates and the ongoing China-US trade dispute created new uncertainties.
Thus the profitability of strategic investments faced extra challenges, with a need to enhance risk management systems and respond to market developments and tighter regulatory requirements.
In view of that, net profit attributable to equity holders amounted to RMB2.665 billion, which represented a slight decrease year-on-year. This followed a fall in net profit from strategic investments to RMB1.975 billion for the period, which was caused mainly by a decrease in gains from capital operations.
The group’s IT, agriculture and food, and innovative consumption and services segments all achieved profits at an operational level and continue to benefit from positive fundamentals. Significantly too, the net profit from financial investments attributable to shareholders climbed to RMB1.35 billion, a year-on-year increase of 187 per cent, signaling growth in both distributable income and fair value.
“By ensuring our fundamentals operated under safe and reliable conditions, we are heading firmly and steadily towards our established strategic goals.” said Liu Chuanzhi, chairman of Legend Holdings.
In addition, the company noted that during the reporting period seven companies within the group’s portfolio completed initial public offerings. One other completed a material asset acquisition, and a further two were incorporated into public companies through a restructuring of assets. Also the CSRC formally accepted IPO applications by Levima Advanced Materials and EAL.
Zhu Linan, president of Legend Holdings stated: “The group will continue to facilitate the development of portfolio companies by providing all-round support and monitoring credit and operational risks.”
Key highlights for the period in the financial services segment included the performance of group subsidiary BIL, the third-biggest bank in Luxembourg in terms of market share and an institution recognized as systemically important by the European Central Bank. BIL provides universal banking services for retail, corporate, private banking and capital market clients.
It maintained stable growth, with AUM (assets under management) reaching EUR41.9 billion as of June 30, a 6.1 per cent increase over the past six months. Customer deposits and loan balances were EUR18.3 billion and EUR14 billion, which represented respective growth of 5.8 per cent and 4.6 per cent since the end of 2018.
Separately, associate company Lakala Payment successfully completed its initial public offering and listing on the ChiNext board of the Shenzhen stock exchange in April, thereby contributing diluted earnings with an amount of RMB265 million. The company mainly provides third-party payment and other value-added services.
In the area of innovation consumption and services, the group’s strategic investment in Better Education, made back in 2017, continues to see steady growth.
In operation for more than a decade, the enterprise now runs a network of 111 kindergartens, nine early learning centers and various training schools covering 39 cities across China. Another 14 new kindergartens are planned to open in cities including Shanghai, Suzhou and Guangzhou.
Within that segment, the performance of Shanghai Neuromedical Center is also giving good cause for optimism. Revenue during the reporting period reached RMB138 million, an increase of 11.3 per cent from the same cut-off point a year earlier, with net profit coming in at RMB5 million. This improved result has been achieved through an emphasis on technology and service and enhancing the hospital’s brand.
“In general, the uncertainties brought by international politics and macroeconomic circumstances will remain for some time,” Liu said.
“With this in mind, Legend Holdings should focus on strategy, carry out sufficient research, and be aware of changes in the business environment. We should also make good use of the great advantages of China’s huge market, while continuing to pay close attention to forward-looking exploration and investments in scientific and technological innovation. “
“At the same time, we need to keep a watchful eye on overseas investment opportunities, welcome changes, and continuously provide returns to shareholders, thus contributing to China’s economy.”
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