YANGZIJIANG Financial Holding : YF8 0% on Saturday (Aug 12) reported earnings of S$162.5 million for the first half of the fiscal year ended June, up 19.2 per cent from a net profit of S$136.4 million in the corresponding year-ago period. 

On a per-share basis, earnings rose to S$0.0439 from S$0.0345. The company said this figure was boosted by its earnings growth, as well as its share buyback activity over the last 12 months. 

No dividend was declared for the period under review, as the company’s policy is to declare a dividend annually. 

Total income for the period rose to S$198.4 million from S$173.8 million. 

Segmentally, interest income – which constitutes mainly the group’s debt investments business and was the main income generator group for the period under review – was down 18 per cent to S$151.6 million. 

Yangzijiang Financial’s interest income from its debts investments business fell 20.3 per cent year on year in H1 to S$143.1 million due chiefly to a 19.5 per cent decline in interest income earned on the group’s debt investments.

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This came on the back of a lower average debt investments balance in H1, as well as an increase in non-performing loans since H2 last year due to the deteriorating China real estate market. 

Interest income from cash and cash equivalents, meanwhile, rose to S$8.4 million from S$5.4 million, due to a higher cash balance and higher returns from the offshore yield enhancement cash management products denominated in US dollars. 

The company’s non-interest income – which comprises fee income and dividend income earned on investments in financial assets at fair value – stood at S$46.9 million in H1 versus a loss of S$11.1 million in the year ago period.

Dividend income rose 54.2 per cent to S$11.7 million due to higher dividend distribution from offshore fund investments. 

The company also booked a gain of S$34.5 million from net change in fair value, compared to a loss of S$19 million in H1 last year. 

The company said it has made “good progress” in tackling its non-performing loans in its debt investment portfolio in China over the past six months, due to effective recovery efforts in H1. 

As at end-June, Yangzijiang Financial’s non-performing loans stood at 37 per cent, down from 41 per cent as at end-December last year. 

The company said it remains focused on diversifying its assets under management, and is looking to gradually increase its investments outside China over the next five years. 

As part of its diversification strategy, the group said it intends to allocate half its funds to investments beyond China over the long term, and has also set a target to deploy approximately S$1 billion of its proprietary capital into investments outside of China by the end of this year.

Vincent Toe, chief executive officer of Yangzijiang Financial Holding, noted: “The group’s international portfolio has gotten off to a good start, and we are currently generating good returns from our investments. Our diversified set-up for this portfolio, currently spanning across four different asset types, aims to reduce portfolio volatility while yet concurrently achieve strong returns for all our stakeholders in the long run. ”

Shares of Yangzijiang Financial ended last Friday flat at S$0.36.