Credit China profit up 127.1% to RMB58.5mn

Recorded turnover reached RMB105.6mn, 134.1% higher while profit attributable to owners of the Company amounted to RMB58.5mn.

Credit China Holdings Limited (“Credit China”), a leading short-term financing service provider in the Yangtze River Delta, announced unaudited 2011 interim results of the Company and its subsidiaries (the “Group”) for the six months ended 30 June 2011.

During the period under review, revenue of the Group increased significantly by approximately 134.1% to RMB105.6 million (corresponding period of last year: approximately RMB45.1 million). The increase was mainly attributable to the introduction of new financing services such as finance lease and other collateral-backed loan, and the successful expansion of its loan portfolio by the Group in the second quarter. Profit attributable to owners of the Company also rose considerably by 127.1% to approximately RMB58.5 million (corresponding period of last year: approximately RMB25.8 million), equivalent to 55.4% of net profit margin. These results demonstrated the strong profitability of the Group. As at 30 June 2011, the Group had bank balances and cash of approximately RMB47.3 million and did not have any bank loans or other borrowings. The Board of Directors does not recommend the payment of an interim dividend (corresponding period of last year:Nil), according to a Credit China report.

Mr Shi Zhijun, Chairman of Credit China, said, “During the period under review, the PRC Government stepped up measures to curb prices by increasing banks’ reserve requirements three times and raising the benchmark lending and deposit rates twice during the last six months. These stricter monetary policies suggest a significantly reduced chance for individuals and companies to obtain bank financing but bring about business development opportunities for the Group. During the period under review, the Group continued to provide business owners who required capital with the necessary financial services. To keep up with the rising demand and cater for future development needs, the Group further strengthened its capital base by a top-up placing arrangement in May 2011.”

During the period under review, the Group’s turnover is mainly derived from the provision of real estate pawn loan service, entrusted loan and financial consultancy services, constituting 87.8%,of the total turnover. The Group commenced its finance lease service from the second quarter of this year. The remaining revenues of the Group also include personal property pawn loan service as well as other collateral-backed pawn loan service. Besides the Yangtze River Delta, the Group commenced its money lending service in Hong Kong during the first quarter of this year.

Looking toward the future, Mr. Shi said, “We expect that the PRC Government will continue imposing monetary restrictions on banks in order to cool the overheated economy and impose greater restraints for individuals and companies in obtaining financing from traditional banking systems. These trends would create a favourable situation for the Group, providing expanded business opportunities and enabling it to better attract SME clients. The Group will continue to pursue opportunities of mergers and acquisitions so as to diversify its business streams and extend its services to cover a broader spectrum of clients. These continuous efforts will help consolidate and enhance the Group’s position in the market, thus adding to its shareholders’ value.”