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Gemini Investments (Holdings) Limited盛 洋 投 資（控 股）有 限 公 司
(Incorporated in Hong Kong with limited liability)
(Stock Code: 174) ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016The Board of Directors (the "Board" or the "Director(s)") of Gemini Investments (Holdings) Limited (the "Company") is pleased to present the interim results of the Company and its subsidiaries (together referred to as the "Group", "our Group" or "We"/"we") for the six months ended 30 June 2016 (the "Interim Period").
FINANCIAL REVIEW RevenueDuring the Interim Period, our Group recorded a total revenue of approximately HK$9.6 million (for the six months ended 30 June 2015: approximately HK$12.4 million), which comprises rental income of approximately HK$9.2 million (for the six months ended 30 June 2015: approximately HK$8.8 million) and dividend income of approximately HK$0.4 million (for the six months ended 30 June 2015: approximately HK$2.0 million).
Loss attributable to owners of the CompanyDuring the Interim Period, our Group recorded a loss attributable to owners of the Company of approximately HK$288.7 million (for the six months ended 30 June 2015: loss of approximately HK$269.6 million). Such loss recorded was mainly because of:
share of a loss of approximately HK$159.5 million in a joint venture of the Company, namely Sino Prosperity Real Estate Fund L.P. (the "SPRE Fund"). Our Group has disposed of the entire interest held in the SPRE Fund in June 2016 through the disposal of Chance Bright Limited ("Chance Bright", a wholly-owned subsidiary of the Company which held the 50% equity interest in the SPRE Fund), for a total consideration of RMB970.0 million (approximately HK$1,131.4 million), with a slight loss on disposal of approximately HK$7.4 million recognised and;
finance cost of approximately HK$141.7 million, including the non-cash imputed interest expenses of approximately HK$108.4 million relating to the loans borrowed from Grand Beauty Management Limited ("Grand Beauty"), an indirect wholly-owned subsidiary of our controlling shareholder, Sino-Ocean Group Holding Limited ("Sino-Ocean", and together with its subsidiaries, "Sino-Ocean Group"), during the Interim Period.
Consequently, our Group recorded basic losses per share of approximately 0.64 HK dollar for the Interim Period versus basic losses per share of approximately 0.60 HK dollar during the last corresponding period.
The Board does not recommend the payment of any interim dividend for the Interim Period.
Financial Resources and LiquidityTotal assets and net asset value of our Group as at 30 June 2016 were approximately HK$5,763.7 million (31 December 2015: approximately HK$6,528.2 million) and approximately HK$3,789.9 million (31 December 2015: approximately HK$3,956.3 million), respectively.
As at 30 June 2016, the carrying amount of our total borrowings amounted to approximately HK$1,925.3 million (31 December 2015: approximately HK$2,465.0 million), mainly consisted of
(a) unsecured borrowings with carrying amount of approximately HK$1,476.4 million (31 December 2015: approximately HK$1,941.9 million), of which approximately HK$258.6 million classified as current liabilities, from Grand Beauty; and (b) an unsecured bank borrowing with carrying amount of HK$448.8 million (31 December 2015: HK$497.8 million), of which the whole amount will be repayable in one year. Apart from the above, our Group did not have any other interest bearing debt as at 30 June 2016.
Total cash resources (including bank balances and cash and short-term bank deposits) of our Group amounted to approximately HK$1,265.3 million as at 30 June 2016 (31 December 2015: approximately HK$851.5 million), and the current ratio of our Group as at 30 June 2016 was approximately 1.89 times. The net gearing ratio of our Group as at 30 June 2016, based on total borrowings (of which approximately 77% represented shareholder's loan from Grand Beauty) less cash resources divided by total shareholders' equity, was around 17% (31 December 2015: 41%).
Given our adaptable financial management policy amid the continued strong financial support from Sino-Ocean Group, we are confident about sustaining our financial liquidity to support our business expansion and maintaining overall financial healthiness in the coming years.
Risk of Exposure to Exchange Rate Fluctuations and Related HedgingDuring the Interim Period, our Group's assets and liabilities were mainly denominated in Hong Kong Dollars, United States Dollars, Renminbi and Australian Dollars. In view of the potential Renminbi and Australian Dollars exchange rate fluctuations, our Group will continue to closely monitor the foreign currency exchange risk exposure and enter into any related hedging when appropriate.
OPERATION REVIEWOur Group is principally engaged in investment in fund platform, property investment, fund investment, and securities investment business.
During the Interim Period, our Group adhered to the philosophy of value investment, actively optimizing its asset allocation. An analysis of our Group's revenue and contribution to operating result for the Interim Period by our principal activities is set out in Note 4 to the unaudited condensed consolidated financial statements of our Group as disclosed in this announcement below.
Investment in Fund PlatformThrough investing in fund platform, our Group is able to participate in the property projects in the United States of America (the "U.S.") or in other countries where investment opportunities arise through various structures of vehicles, which enable our Group to share potential gain from such investments.
In order to capture the growth in the property market of the U.S. and strengthen our Group's presence therein, our Group has been actively exploring sound investment opportunities in the U.S. property market over the years, including the investment in Gemini-Rosemont Realty LLC ("GR Realty") as disclosed in the announcement of the Company dated 31 December 2014. GR Realty is a well-established platform principally engaged in the ownership and/or management of an investment portfolio which comprised 71 commercial properties, representing 112 buildings, with approximately
14.4 million square feet in 20 states across the U.S. as at 30 June 2016. During the first half of 2016, GR Realty has successfully raised around 80 % of equity contribution from good standing investors to acquire a premier class A office tower located in the heart of bustling Downtown San Diego, California, U.S.. GR Realty provides respective asset and property management as well as leasing services to the property owner of such class A office tower and earns management fee income.
During the Interim Period, our Group shared a profit of approximately HK$31.8 million as a result of its interest in GR Realty and received dividend of approximately HK$12.4 million from certain syndicated projects controlled by GR Realty. As at 30 June 2016, our interest in GR Realty, together with interest in certain syndicated projects controlled by GR Realty, amounted to approximately HK$955.0 million.
Through investment in GR Realty, our Group is able to leverage on the expertise, experience and business network of its management team in the commercial real estate market, as well as diversifying our investment in fund platform business and property investment portfolio to a large number of states in the U.S., and allow our Group standing on a vantage point due to its exposure and presence in the U.S.
In March 2016, our Group, after taking into account the existing cash balance of the Group and the funding cost of the Group, entered into a loan agreement to provide unsecured loans in the amount of US$6.3 million in aggregate at maximum to GR Realty, with interest at 6% per annum, for the purpose of facilitating the future expansion of GR Realty, which will in turn increase value to our Group. The details are set out in the Company's announcement dated 31 March 2016.
SPRE Fund (disposed in June 2016)
As disclosed in the Company's announcements dated 19 May 2016 and 28 June 2016, and circular dated 10 June 2016, the Group completed the disposal of its equity interest in the SPRE Fund through the disposal of the entire equity interest in Chance Bright and assignment of the shareholder's loan provided by the Group, for a total consideration of RMB970.0 million in June 2016. The disposal resulted in a loss of approximately HK$7.4 million to our Group during the Interim Period.
During the Interim Period, share of loss of the SPRE Fund of approximately HK$159.5 million was recognised, mainly as a result of the challenging property market, in particular in second and third tier cities.
The disposal enables our Group to focus top management resources and monetise the remaining value of its investment in the SPRE Fund for the purpose of seeking other overseas investment opportunities amid a competitive market environment.