Far East Horizon Interim Results Grow Steadily in 2018
Executive President Kong Fanxing, CFO Wang Mingzhe and Vice-President Shang Bing attended the press conference and responded to investors and journalists.
FAR EAST HORIZON made an exhilarating success in the 1st half of 2018 as it had always done. On Aug. 29, FAR EAST HORIZON (HKEX: 03360.HK) released its interim results in Hong Kong, announcing company performance as of Jun. 30, 2018.
In the 1st half of 2018, FAR EAST HORIZON maintained robust growth momentum, with total assets up by 19.72% and net income available to common shareholders up by around 24.13% from the beginning of the year. At the same time, overall asset quality remained consistent and controllable, proven by a non performing loan (NPL) ratio of 0.96% and a provision coverage ratio (PCR) of 237.68%, both of which were distinct from those of traditional financial institutions and indicative of high asset quality.
The “Finance + Industry” Strategy Met Performance Expectations with a Successive Record High
In response to continuous transformation in the domestic economy and to a dynamically readjusting industrial structure over the 1st half of 2018, FAR EAST HORIZON remained cautiously sensitive to the external environment in line with customer demand while sticking to a dual-core strategy of “Finance + Industry” which drove new business models and diversify means of operation. The double-impetus strategy, founded on finance and industry, helped achieve outstanding performance.
Motive Power Sustained FAR EAST HORIZON Growth in Various Fields and Asset Quality Remained High and Consistent
In the 1st half of 2018 FAR EAST HORIZON reorganized its business empire to suit the external environment, especially changing industry dynamics. Currently, FAR EAST HORIZON’s operation covers primarily seven sectors: medical care, education, construction, industry & equipment, and civil service & consumer goods, transportation & logistics, and urban utilities.
With the release of a series of macroeconomic regulations and the advances in business diversification, FAR EAST HORIZON brought to full play the synergistic effect of combining the industrial operation with the financial operation as it continued to upgrade financial service and optimizing industrial structure. Improvements were ongoing in the industrial sectors while asset quality remained high.
Financial Operation: Stable Growth in Seven Sectors
Going far beyond lease financing, FAR EAST HORIZON took the initiative to explore new financial investment vehicles, business models and investment vehicles in an effort to upgrade finance services, achieving significant growth in operational performance while making asset quality well-controlled as always. In terms of NPL and PCR, FAR EAST HORIZON achieved significant excellence above and beyond the traditional financial institutions, with asset quality remaining safe and sound.
Industrial Operation: Stepping up Expansion Efforts
As for the industrial operation, FAR EAST HORIZON pressed ahead with three sectors it focused on, i.e. medical care, construction and education and achieved an incipient synergistic beneficial effect by combining finance with industry.
Revenue from industry grew by 51.85% year over year, accounting for 15.77% of its gross revenue. Gross revenue from medical care, education and construction grew by 38.35%, 28.66% and 26.95% year over year.
In the 1st half of 2018, FAR EAST HORIZON stepped up efforts to invest in high-quality hospitals, ending up with 43 M&As and new establishments which offered over 16,000 beds and ranking among the highest in China. An incipient nationwide hospital network that covers East China, South China, North China, Southwest China and Northeast China has come into existence.
Changzhou Hongyue Maternity Hospital, the second high-end maternity hospital of FAR EAST HORIZON built after the greenfield fashion, opened in the 1st half of the year.
FAR EAST HORIZON is dedicated to achieving higher efficiency for its disciplinary study units by restructuring medical branches horizontally and vertically, exploring into the law governing hospital management and improving services. Centering on the operational philosophy of “One System, One Network and One Hospital”, it aims to become the largest hospital group in China in the future
Keeping to the teaching philosophy of “Student-centered, integration of East and West and Elite Education”, FAR EAST HORIZON pushes steadily ahead with quality domestic and international K12 education schemes. FAR EAST HORIZON is continually integrating and coordinating its domestic and overseas education resources while dabbling in higher education as a high-end service.
In the 1st half of 2018, FAR EAST HORIZON opened 3 new high-end kindergartens, 1 new Shanghai-based school and 1 new nursing college. Now there are 10 high-end kindergartens and 4 high-end schools under its umbrella, which gross 1,314 students, up by 35.46% from the 1st half of 2017.
It’s especially notable that the forthcoming opening of a Guangzhou-based nursing college as well as a Pudong-based nine-year school will mark a double breakthrough in compulsory education and higher education. It will also mark the birth of an incipient education system covering kindergarten through higher education both at home and abroad.
Fast growth and effective manoeuvring of education resources testified to FAR EAST HORIZON’s top selling point, i.e. a model combining finance with industry to spur synergism and complementation, while setting the mega-trend towards upgrading its education operation to keep up with the nationwide upgrades of industry and service.
Topping the list of the domestic industry and ranking among top 100 international contractors, FAR EAST HORIZON is known to have the largest asset size at home and takes the lead in the size of construction equipment assets, e.g. aerial work platforms, repeatedly-used materials and paving equipment. At the same time, FAR EAST HORIZON has forged an incipient O2O marketing network in operation nationwide over the years.
Persistence in a Resource Globalization Strategy to Strengthen Debt Financing Competitiveness
Financial resource is the lifeline of a firm. In the face of a complex financial climate worldwide, FAR EAST HORIZON pursued a resource globalization strategy with encouraging progress on both the direct and indirect financing markets. There were ongoing improvements on debt structure that enabled FAR EAST HORIZON to lead the competitors prominently in financing cost.
By continuously introducing a diversity of financing tools and optimizing debt structure, FAR EAST HORIZON further eased dependence on single products and markets. Financing product diversity and geographical dispersion of sources made sure of a consistently powerful cost advantage.
As for direct financing, FAR EAST HORIZON stepped up efforts to diversify bond varieties by introducing innovative products (e.g. renewable corporate bonds) and granting more quotas on private placement notes (PPN) and corporate bonds. Now a diversity of products, inclusive of corporate bonds, PPNs and super short-term commercial papers (SSCP), are traded on a number of market.
As for indirect financing, FAR EAST HORIZON continued to seek new financial resources beyond the existing ones by stepping up relations with banks, including the four leading state-owned banks and several policy-backed banks, to form strategic partnerships. At the same time, FAR EAST HORIZON struggled hard to expand overseas markets and had more access to funds from foreign investors.
Future Outlook: Clinging to the “Finance + Industry” Strategy
Vice-Chairman and Executive President Kong Fanxing said at the press conference that while growing international market uncertainties might pose some challenges to the foreign trade in the future, real economy sectors would become an important pillar to sustain long-term economy.
FAR EAST HORIZON will cling to the “Finance + Industry” Strategy by centering on real economy and manoeuvring financial resources to serve, participate in and operate the industry sector. It will dedicate itself to creating innovative products and services, provide custom services in various sectors and carry forward its dream of “Concentration of Global Resources to Boost the Chinese industry”.