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Unaudited
Interim Results For The Six Months Ended June 30, 2002
HONG KONG, September 25, 2002 China Enterprises Limited ("the
Company") (NYSE: CSH) announced today its unaudited condensed
consolidated results for the six months ended June 30, 2002.
Financial
Highlights
Revenues,
operating income, loss from continuing operations and loss from
discontinued operations for the six months ended June 30, 2001
have been restated from amounts previously reported to reflect
the effect of discontinued operations as of June 30, 2001. Please
refer to Note 1 to the attached Financial Highlights for details.
For
the period under review, the Company has successfully diversified
its business outside the tire manufacturing and trading sectors
through the acquisition of a substantive stake in Ananda Wing
On Travel (Holdings) Limited ("Ananda"), a leading
travel operator based in Hong Kong whose shares are listed on
The Stock Exchange of Hong Kong Limited. The investment was
accounted as an investment in affiliate companies in the interim
results.
In
the fourth quarter of fiscal 2001, the Company entered into
a share transfer agreement with a third party to dispose of
its entire interest in Yantai CSI and the respective shareholder's
advance of Rmb20.2 million for an aggregate consideration of
Rmb25.5 million. The approval from the relevant governmental
authorities has been obtained in late January 2002 and the Company
transferred substantially all its risks and benefits of ownership
of Yantai CSI to the buyer. The Company recognized a net realized
gain on such disposition of Rmb7.8 million and has ceased to
account for the results of operations and the assets and liabilities
of the factory from the disposal date. The sale proceeds were
fully received by the Company in cash in August 2002.
In
January 2002, the Company also signed a transfer agreement to
sell its entire interest in Shandong Synthetic to its Chinese
joint venture partner for a consideration of Rmb10,000. The
sale was considered as completed in July 2002 as approval from
the relevant governmental authorities has been obtained and
the Company transferred substantially all its risks and benefits
of ownership of the factory to the buyer in early July 2002.
During
the period, tire prices remained flat amidst the highly competitive
tire market but the prices of major raw materials such as natural
rubber and nylon cord have moved up. Despite the above, the
Company was able to maintain a 7.2% revenue growth with revenue
climbed up to Rmb1.46 billion as compared to the Rmb1.36 billion
recorded in the same period last year due to the Company efforts
to reorganize its product strategy into marketable and higher
margin products and discontinue those of lower profit margins.
There was a notable increase in the sales of radial tires of
22.1% and bicycle tires of 18.3%. Gross profit margin improved
from 12.97% to 13.49%. The Company was able to control the rising
cost of production while benefiting from the sales of higher
margin products at the same time. However, it is worth noting
that the tension in the Middle East may lead to an upward trend
in crude oil prices as well as a continuing price increase in
the natural rubber prices. In view of the above, the present
profit margin achieved for these six months may not be maintained
unless general market selling prices can be adjusted to compensate
for the rising production costs.
Compared
to the same period last year, selling and administrative expenses
decreased by 27.6% to Rmb114.9 million. This significant improvement
can be attributed to: the discontinuance of free delivery services,
management's stringent cost cutting efforts and the implementation
of more efficient and effective administrative and marketing
strategies.
Loss
from continuing operations increased to Rmb27.0 million compared
to Rmb1.5 million last year. It comprises an impairment loss
provision for the long-lived assets of Yinchuan CSI amounting
to Rmb174.4 million due to continued recurring losses incurred
by Yinchuan CSI, a gain of Rmb37.1 million upon an increase
in fair value of the convertible options in the convertible
note of Ananda and the Company's share of losses of Ananda in
an amount of Rmb3.6 million since its acquisition on April 19,
2002. The downturn of the Hong Kong economy and the September
11, 2001 incident led to a general decrease in consumer consumption
in Hong Kong and a change of customer's preference to short
distance journeys. In addition, the second quarter of a year
is generally a low season in the travel industry. All these
facts contributed to affect the performance of Ananda in the
quarter results.
Income
from discontinued operations increased to Rmb3.9 million in
the half year ended 2002 compared with a loss of Rmb16.6 million
in the half year ended 2001. It represented the operating results
of the radial tire factory of Double Happiness, Shandong Synthetic
and Yantai CSI up to the disposal date and a gain on disposal
of Yantai CSI amounting to Rmb7.8 million in the first half
year of 2002.
For
the half-year ended June 30, 2002, the Company recorded a consolidated
net loss of Rmb23.1 million (2001: Rmb18.0 million).
In
late August 2002, the Company decided to reengineer the operation
of Yinchuan CSI. The Company is actively engaged in negotiations
with its Chinese joint venture partner to formulate different
alternatives for the future operations of Yinchuan CSI. No concrete
plan has yet been agreed among all parties as at the report
date.
The
New York Stock Exchange ("NYSE") informed the Company
on September 19, 2002 that the NYSE intends to suspend trading
in the Company's Common Stock prior to the Exchange's opening
on September 27, 2002 for a failure to meet the NYSE's continuing
listing standards. The Company intends to request a review of
the NYSE's decision according to NYSE appeal procedures. Following
the review, if the Company is unsuccessful in its appeal, the
NYSE may apply to the SEC to delist the Common Stock from the
NYSE.
For
details of the unaudited consolidated results of the Company
and its subsidiaries for the six months ended June 30, 2002,
please refer to the attached Financial Highlights.
Click here for the
China Enterprises Limited - Financial Highlights
Notes
to Financial Highlights
1. During
the third and fourth quarters of 2001, the Company decided to
dispose of certain of its subsidiaries which included Double
Happiness, Yantai CSI and Shandong Synthetic, which have previously
been reported under the operating results in June 30, 2001.
Accordingly,
the operating results of Double Happiness, Yantai CSI and Shandong
Synthetic have been segregated from continuing operations and
reported as a separate line item on the consolidated statement
of operations. The Company has also restated its last half year's
consolidated statements of operations and comprehensive loss
to present the operating results of these subsidiaries as discontinued
operations.
Operating
results of the discontinued operations are summarised below:
|
half
Year Ended June 30, |
| 2001
Rmb'000 |
2002
Rmb'000 |
| Revenues |
272,943 |
2,410 |
| Loss
from operations of discontinued components before income
taxes and minority interests (including gain on disposition
of Rmb7.8 million in 2002) |
(30,696) |
(32) |
| Provision
for income taxes |
- |
- |
| Minority
interests |
14,130 |
3,961 |
| (Loss)
Profit from discontinued operations |
(16,566) |
9,929 |
2. The
translation amounts from Renminbi (Rmb) into United States Dollar
(US$) for the convenience of readers has been made at the unified
exchange rate quoted by the People's Bank of China on June 30,
2002 is US$1.00 = Rmb8.28. No representation is made that the
Renminbi amounts could have been, or could be, converted into
United States Dollars at that rate on June 30, 2002 or at any
other rate.
3. The calculation of the basic and diluted net loss per common
share for the first half of 2001 and 2002, is based on the weighted
average number of common shares outstanding during the six months
ended June 30, 2001 and 2002 which were 9,017,310. There have
not been any dilutive securities.
4. Operating income (loss) means income (loss) before income
taxes and minority interests, net interest expenses, other income,
change in derivative fair value and equity in earnings (losses)
of an affiliate.
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New
York, September 19, 2002. China Enterprises Limited (NYSE Symbol:
CSH)
New York, September 19, 2002. China Enterprises Limited (NYSE
Symbol: CSH) announces that the New York Stock Exchange informed
the Company today that the NYSE intends to suspend trading in
the Company's common stock prior to the Exchange's opening on
Friday, September 27, 2002 for failure to meet the NYSE's continuing
listing standards. The Company intends to request a review of
the NYSE's decision according to NYSE appeal procedures. Following
the review, if the Company is unsuccessful in its appeal, the
NYSE may apply to the SEC to delist the common stock from the
NYSE.
As the Company previously announced on March 4, 2002, the Company
received a notice from the NYSE that the Company was not in
compliance with the NYSE requirement of an average global market
capitalization of at least $15,000,000 over a consecutive 30
trading day period. The Company submitted a business plan to
the NYSE designed to bring the Company into compliance with
the continuing listing standards. Despite the plan, the Company
has recently fallen below the NYSE's continuing listing standard
requiring an average closing price of its common stock of at
least $1.00 for a consecutive 30 trading day period.
As of this time, the Company intends to appeal the NYSE's suspension
and is exploring its options.
The Company, formerly known as China Tire e-commerce.com Ltd.,
is a holding company for a number of Sino-foreign equity joint
venture enterprises and two other international joint ventures,
which manufacture and market tires in China and other countries
abroad. The Company also has a substantial interest in an investment
holding company the subsidiaries of which are principally engaged
in the business of providing package tours, travel, transportation
and other related services.
For
more information, please contact:
Hong
Kong
China Enterprises Limited
Tel: (852) 2372 0130
Fax: (852) 2810 6982
New
York
Citigate Dewe Rogerson Inc.
Tel: (212) 688 6840
Fax: (212) 838 3393
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China
Enterprises Announces Investment by Ananda Wing On Travel (Holdings)
Limited in China Land Group Limited
Hong Kong, August 6, 2002. China Enterprises Limited (NYSE:
CSH) announced that Ananda Wing On Travel (Holdings) Limited
(HKSE stock code: 1189), in which China Enterprises has a 34.49
% stake, has entered in to agreements with China Land Group
Limited (HKSE stock code: 0149). Pursuant to the agreements
for proposed transactions Ananda Wing On will acquire an aggregate
33.6% interest in China Land in exchange for HK$300 million
and Ananda Wing On's interest in Shropshire Property Limited.
The
proposed transactions are part of a larger restructuring of the
China Land business. The controlling stockholder of China Land
is China Strategic Holdings (HKSE stock code: 0235) which is also
the controlling stockholder of China Enterprises. Through a series
of transactions, China Land will issue 1,000,000,000 newly issued
shares to Ananda Wing On in exchange for an aggregate consideration
of HK$300 million and will conduct a best efforts offering of
1,333,333,333 newly issued shares for an aggregate of approximately
HK$400 million. In addition, China Land will acquire from Ananda
Wing On, Shropshire Property Limited, a subsidiary that has the
right to acquire 60% interest in the Golden Gulf Hotel located
in Luoyang, China, in exchange for newly issued shares. Besides,
China Land will acquire Rosedale Hotel Group Limited from Paul
Y. - ITC Construction Holdings Limited (HKSE stock code: 0498)
(which holds an approximate 14.5% in China Strategic) for HK$250
million in cash. Rosedale Hotel Group Limited indirectly owns
100% interests in a hotel with 274 rooms in Causeway Bay, Hong
Kong. Moreover, China Land will acquire, through a subsidiary,
Makerston Limited from Hutchison Hotel Holdings (International)
Limited in exchange for HK$150 million cash and HK$365 million
in the form of a promissory note. Makerston Limited indirectly
holds 95% interests in Beijing Harbour Plaza Hotel, Beijing, China.
If all of the transactions are consummated, following the transactions,
Ananda Wing On and China Strategic will own, respectively, 33.6%
and 22.0% of China Land.
The consummations of the transactions are subject to a number
of conditions, including regulatory approvals and stockholder
approvals.
Additional
details of the proposed transactions are available in the announcement
issued by China Strategic, China Land and Ananda Wing On in
July 26, 2002.
Ananda
Wing On is an investment holding company and the subsidiaries
of which are principally engaged in the business of providing
package tours, travel, transportation and other related services.
China Land is an investment holding company and the subsidiaries
of which are principally engaged in the business of property trading
and development, hotel operations and toll road development.
CONTACT:
Hong Kong, China Enterprises Limited, 852-2372-0130, or fax, 852-2810-6982;
or New York, Citigate Dewe Rogerson Inc., 212-688-6840, or fax,
212-838-3393, for China Enterprises Limited
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| China
Enterprises Announces Its Acquisition of Interests in Ananda Wing
On Travel (Holdings) Limited
Hong
Kong, February 8, 2002. China Enterprises Limited (NYSE Symbol:
CSH) announces that on February 1, 2002, the Company, through
its wholly-owned subsidiary, Million Good Limited, agreed to subscribe
(the "Subscription") for 4,800,000,000 new ordinary
shares of Ananda Wing On Travel (Holdings) Limited for an aggregate
subscription price of HK$129,600,000. Ananda is a Hong Kong based
travel company, whose ordinary shares are listed on the Hong Kong
Stock Exchange (HKSE stock code: 1189). Following the issuance
of shares to Million Good, China Enterprises, through Million
Good, will own approximately 34.6% of the outstanding share capital
of Ananda.
As
part of the transaction, China Enterprises agreed to purchase
a two-year convertible note (the "Note") to be issued
by Ananda in the principal amount of HK$120,000,000. The Note
will bear interest at the rate of 2% per annum payable semi-annually
in arrears. China Enterprises may convert the Note into ordinary
shares of Ananda at a rate per share equal to HK$0.032, subject
to adjustments, at any time prior to the Note's maturity date,
which will be two years from the date the Note is issued.
In addition, Hutchison International Limited, Capital Strategic
Investment Limited and Sinolink Worldwide Holdings Limited each
also agreed to acquire similar two-year convertible notes issued
by Ananda in the principal amounts of HK$150,000,000, HK$50,000,000
and HK$50,000,000, respectively.
Following
the issuance of the shares and assuming full conversion of all
four of the notes and no further issuances of shares by Ananda
other than pursuant to the transactions referred to in this press
release, China Enterprises and Million Good would collectively
own approximately 33.6% of the outstanding shares of Ananda, and
Hutchison, Capital Strategic and Sinolink Worldwide would own
approximately, 18.5%, 6.1% and 6.1%, respectively, of the outstanding
share capital of Ananda.
Ananda
is one of the major leading operators in the travel industry of
Hong Kong and Southeast Asia. It mainly provides package tours,
travel, transportation and other related services.
China
Enterprises believes the investment in Ananda is a positive step
in diversifying the company's business. The Company expects the
travel industry in the People's Republic of China to expand after
the PRC'a accession to the World Trade Organization.
Completion of the Subscription is conditional upon, amongst other
things, Million Good receiving from the Securities and Futures
Commission in Hong Kong, a waiver (the "Waiver") of
the obligation to make a general offer to all of the shareholders
of Ananda under The Hong Kong Code on Takeovers and Mergers; the
terms of the Subscription, Note and Waiver being approved by Ananda's
shareholders at a general meeting; The Stock Exchange of Hong
Kong Limited agreeing to grant a listing of the shares under the
Subscription as well as the shares issuable upon the conversion
of the Note; and all necessary approvals required from the relevant
governmental authorities in Hong Kong, Bermuda and the United
States. China Enterprises' obligations under the Note will be
conditional upon, amongst others things, the Subscription becoming
unconditional.
Completion
of the Subscription will take place on the third business day
after fulfillment or waiver of the conditions under the subscription
agreement. In the event that any of the conditions set out in
the subscription agreement is not fulfilled or waived by Million
Good by March 31, 2002, the subscription agreement will lapse.
For
more information, please contact:
Hong
Kong
China Enterprises Limited
Tel: (852) 2372 0130
Fax: (852) 2810 6982
New
York
Citigate Dewe Rogerson Inc.
Tel: (212) 688 6840
Fax: (212) 838 3393
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| Except
for statements of historical fact, this news release contains
certain forward-looking statements about the Company within
the meaning of the Private Securities Litigation Reform
Act. Because such statements are subject to significant
risks and uncertainties, including changes in economic
and market conditions and successful implementation of
growth plans, actual results may differ materially. There
are other risks not listed here that may affect the future
business and financial results of the Company, as well
as the forward-looking statements contained herein. To
learn more about such risks and uncertainties, you should
consult the risks noted in the Company's recent SEC filings.
All forward-looking statements contained in this press
release speak only as of the date on which they were made.
The Company undertakes no obligation to update such statements
to reflect events that occur or circumstances that exist
after the date on which they were made. |
Copyright
2002 China Enterprises Limited
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