Managing risk as China's economy slows down
“The recent stock market bull-run in China has improved the quality of our micro-financing colllateral,” said CFO Liu Hua.
Photo by Sim KihTo address risks associated with the continued weakness in global shipbuilding and as well as increased credit default risk arising from China’s economic slowdown, the Group has been stepping up on its operational efficiency as well as financial prudence.
During 1QFY2015, it cut administrative expenses by 23% to Rmb 68.8 million and finance costs by 54% to Rmb 50.4 million.
To reduce the exposure of its held-to-maturity financial assets to China’s property slump, the Group also limited the proportion of borrowers from the real estate and construction industry to 30% as at 31 March 2015 (down from 32% as at 31 December 2014).
Held-to-maturity financial assets increased from Rmb 161.1 million as at 31 December 2014 to Rmb 266.3 million as at 30 April 2015 as the Group had participated in a short term investment opportunity with a return that was as high as 24% a year.
Gross gearing improved marginally from 38.2% as at 31 December 2014 to 37.3% as at 31 March 2015 as it further paid down secured debt.
Restricted cash fell from Rmb 3.3 billion to Rmb 1.7 billion during this period.
AGM on 30 April (Thursday) @ Capital Tower, Robinson Road: A lot of happy shareholders and a Chairman (Ren Yuanlin) who is popular with them. Photo by Reyna Mei.
