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Public company info - Chinese Strategic Holdings Ltd. , 08089.HK
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Chinese Strategic Holdings Ltd., 08089.HK - Company Profile
Chairman Lam Kwok Hing, Wilfred
Share Issued (share) 422,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Conglomerates
Corporate Profile Business Summary: The Group is principally engaged in businesses of properties investments, securities trading, loan financing, trading business and dealing in, advising on securities and asset management. Performance for the year: For the year ended 31 December 2019, the Group recorded a revenue of approximately HK$4,140,000 (for the year ended 31 December 2018: approximately HK$24,886,000), representing a decrease of approximately 83.4% as compared with the preceding financial year. The loss attributable to the owners of the Company for the year ended 31 December 2019 aggregated at approximately HK$178,040,000 (for the year ended 31 December 2018: approximately HK$221,601,000). The basic loss per share for the year ended 31 December 2019 was HK72.53 cents (for the year ended 31 December 2018: HK107.17 cents). Business Review Properties Investments The Group recorded a rental income of approximately HK$1,369,000 for the year ended 31 December 2019 (for the year ended 31 December 2018: approximately HK$2,516,000) through properties leasing. Due to the falling prices experienced by the property market in Hong Kong in the fourth quarter during the year ended 31 December 2019, the Group recorded a loss arising from fair value changes of investment properties of approximately HK$19,377,000 (31 December 2018: gain approximately HK$8,291,000). As at 31 December 2019, the fair value of investment properties of the Group amounted to approximately HK$131,310,000 (as at 31 December 2018: approximately HK$164,840,000). Securities Trading During the year ended 31 December 2019, through disposal of financial assets at FVTPL, the Group recorded a loss of approximately HK$Nil (31 December 2018: loss approximately HK$57,074,000). With the volatile securities market affected by political and economic factors, the Group recorded a loss arising from the fair value changes of financial assets at FVTPL of approximately HK$21,336,000 (31 December 2018: loss from changes in fair value of financial assets at FVTPL of approximately HK$53,082,000). As at 31 December 2019, the Group had financial assets at fair value through profit or loss which represent listed securities in Hong Kong amounted to approximately HK$4,725,000 (as at 31 December 2018: approximately HK$33,294,000). There is no single investments of Hong Kong listed securities and/or relevant derivatives with market value exceeding HK$20,000,000 as at 31 December 2019. There is no single investment of Hong Kong listed securities recording a gain/loss exceeding HK$10,000,000 during the year ended 31 December 2019. The Group will remain both prudent and cautious in the securities investment business with the aim of achieving commensurate investment returns. The Group will carefully scrutinize the strategy and approach which will adopt for its securities investment business to navigate through an increasingly volatile investment economic climate. Loan Financing During the year ended 31 December 2019, the performance of the loan financing business was not satisfactory due to keen market competition. It recorded a decrease of approximately 57.3% in the interest income to approximately HK$774,000 from HK$1,814,000 in the preceding financial year. Trading Business The Group launched its trading business in the last quarter of 2017 as a means of diversify its revenue streams. During the year ended 31 December 2019, the group recorded the revenue and operating gain of tea leaves trading of approximately HK$1,991,000 and HK$306,000 respectively (31 December 2018: approximately HK$20,544,000 and loss of HK$1,088,000 respectively). Dealing in, Advising on Securities and Asset Management During the year ended 31 December 2019, the Group has two operating subsidiaries, FT Securities Limited (“FT Securities”), a company holding Type 1 (Dealing in Securities) and Type 4 (Advising on Securities) licences under Securities and Futures Commission (the “SFC”), and Chinese Strategic Asset Management Limited (“CSAM”), a company holding Type 4 (Advising on Securities) and Type 9 (Asset Management) licences under the SFC. This segment reported a revenue for the year ended 31 December of 2019 of HK$Nil (for the year ended 31 December 2018: HK$Nil). Due to the unfavorable business conditions and lack of business opportunities in the current competitive market, FT Securities and CSAM had made an application to SFC separately to revoke its license in August 2019, and subsequently, FT Securities and CSAM had ceased business of regulated activities. Financial Assets The Group held an investment portfolio, classified as equity instruments at fair value through other comprehensive income with carrying value of approximately HK$1,572,000 as at 31 December 2019 (as at 31 December 2018: approximately HK$2,426,000). The Group held certain unlisted convertible bond by a private company, classified as financial assets at fair value through profit or loss, amounted to HK$Nil as at 31 December 2019 (as at 31 December 2018: approximately HK$7,468,000). The convertible instruments were measured at fair value at the reporting end date. In this regard, a loss arising from fair value changes of financial assets at fair value through profit and loss of approximately HK$7,468,000 was recorded during the year ended 31 December 2019 (31 December 2018: loss of approximately HK$32,000). The carrying value of the aforesaid investments, representing 0.44% of the total assets of the Group, is marked against market value and its performance is affected by Hong Kong stock market and global economic environment. Prospects: Looking forward to the year of 2020, the macroeconomic environment remains pessimistic, the market conditions for Hong Kong remain uncertain and continue to face challenges. Hong Kong will be exposed to increasing risks and difficulties, mainly from trade war between China and the US, the continuing local political and social events, the outbreak of COVID-19 in Hong Kong and around the world, and China’s economic growth is forecast to decelerate this year. Although the residential property market in Hong Kong has primarily remained buoyant in the first quarter of 2019, however, the longest bull market in the Hong Kong property sector’s history likely came to an end in the fourth quarter of 2019 due to local social movement and economic uncertainties. The Company is of view that the property market might take a turn for the worse and residential property market is expected to fall in 2020. The management will continue to adopt a very cautious and conservative approach when seeking new property investment opportunities for the Company in 2020. For securities trading, on the back of slowing economy in China, the People’s Republic of China (the “PRC”) government is likely to introduce some policy easing measures to maintain the stable growth of the economy, the US economy may also face downward pressure and the Federal Reserve is expected to further cut interest rate. Given that the investment market is expected to be increasingly volatile, it is necessary to exercise caution and care in the securities investment business in order to monitor relevant risks. Therefore, the Group will continue to closely monitor market changes, manage and reorganize existing investment portfolio and, hopefully, achieve balance between risks and profits. The Group will continue to actively consider and source for new products for its trading business that have potential market appeal and reasonable returns. The development of loan financing business will depend on the market and the assessment of the repayment ability of the potential borrowers. The Group will continue to adopt a cautious and prudent approach to balance the finance income against credit risk from respective borrowers and to seek new borrowers. Overall, the Group is actively attempting to improve the performance of its various business operations, and from time to time, to explore business opportunities in different sectors in order to broaden its revenue stream. Given that the overall business environment in 2020 will likely be challenging, volatile and unpredictable, the management will maintain a very cautious and practical approach in managing the Company’s business operations in the coming financial year. The Group will no doubt act cautiously and prudently moving forward.

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