Hong Kong, Nov 2, 2011 - (ACN Newswire) - China Trends Holdings Limited ("China Trends", Stock Code: 8171.HK), the company focuses on developing the energy-saving applications for digital products, today announced its 3Q 2011 results for the periods ended 30 September 2011.
Financial Performance Review
For the three months ended 30 September 2011, China Trends recorded a turnover of approximately HK$ 22,496,000 (three months ended 30 September 2010: HK$8,580,000), representing an increase of 162.19%; loss attributable to owners of the Company was narrow down to HK$1,538,000, while basic loss per share attributable to owners of the Company amounted to 0.02 cents.
For the nine months ended 30 September 2011, the Company recorded a turnover of approximately HK$71,941,000 (nine months ended 30 September 2010: HK$33,318,000), representing an increase of 115.92%. The increase in revenue was due to the increase of trading business. Loss attributable to owners of the Company for the period was approximately HK$ 405,000, which has narrowed down comparing with the loss at the same period in 2010 of HK$ 6,557,000. The loss was mainly attributable to the drop of profit margins of the existing business operations. Basic loss per share attributable to owners of the Company amounted to 0.01 cents. The directors do not recommend the payment of dividend.
Operation Review
On 7 January 2011, the Company entered into a sale and purchase agreement with Joy China Group Limited (the "Vendor"), pursuant to which, the Company will
acquire 100% equity interest in Full Smart Asia Limited, a company incorporated in British Virgin Islands with limited liability, at a consideration of HK$228,000,000. The consideration shall be settled by the Company in the following manner: (i) HK$11,400,000 already paid in cash to the Vendor within 14 business days from the date of signing of the Agreement as deposit; (ii) HK$113,740,000 shall be satisfied by issuing the convertible bonds to the Vendor at completion; and (iii) HK$102,860,000 shall be satisfied by issuing the promissory note to the Vendor at completion.
On 29 June 2011, the Company entered into a supplemental agreement with the Vendor to vary the terms of the Agreement in respect of the Acquisition, (i) since the Company need additional time to consider the structure of the Target Group with the Vendor, all the parties agreed that the completion of the transaction will be postponed to on or before 31 December 2011, and (ii) an additional HK$11,400,000 shall be payable in cash by the Company to the Vendor within 14 Business Days from the date of signing of the supplemental agreement as interest-free refundable deposit. A circular containing further details in respect of the Agreement and the transactions contemplated hereunder (including the issue of convertible bonds and the promissory note in relation thereto), and other information as required under the GEM Listing Rules, will be despatched to the shareholders on or before 31 December 2011.
On 1 September 2011, the Company entered into a cooperative framework agreement with Mr. Sun Tianqun and Mr. Zhao Bao (collectively the "Vendor") and Boss Dream Cultural Communication Company Limited ("Boss Cultural"), under which, the Company conditionally agreed to acquire the entire issued share capital of (transliterated Beijing Need Education Technology Company Limited) - a company is in process of establishing an education platform from project planning, education resources integration, project operation and management, and teaching system implementation. It is targeted to build 10,000 education platforms for developing the training programs in PRC. The total consideration will be based on the Company and the Vendor's consultation and evaluated by Hong Kong assets evaluation agencies and/or auditors recognized by the Stock Exchange. The Directors believe that the Acquisition will create a chain opportunities to the Company's energy management contract. The Company also terminated the Project Cooperation Agreement signed by a subsidiary of Company, Boss China Systems Limited and Boss Cultural dated 9 November 2010.
Outlook
The Group is principally engaged in developing the energy-saving applications for digital products. The applications mainly make use of the energy performance contracting (EPC) and BOT mechanism which would ultimately apply to different sectors in the society. With the transfer of turnover from traditional products sales to EPC services, the Group believes the switch would enhance the earnings.
According to the EPC business model, the commercial operating model provides a set of energy saving services, project financing, engineering construction, and related services to the clients in a contract of three to five years. The Group will then realize its investment return and profit by sharing relevant percentage of the energy saving efficiency realised by the clients' energy saving measures.
About China Trends
China Trends Holdings Limited ("China Trends", Stock Code: 8171.HK) is principally engaged in energy-saving e-solutions, while the brand new idea for energy-saving digital industry further make use of the energy management contract (CEM) model and ultimately apply to different sectors. The Company is determined to become an application access of "New Energy Resources", "New Light Resources", "New Materials" and "New Media" - and is listed on The GEM Board of the Stock Exchange of Hong Kong Limited on 31 July 2002. Fore more information, please visit www.8171.com.hk.