Our Core Values
The Year is a year of excitement and achievement for the Group.
The first excitement comes from the unique geographic advantage of the Group's market. Since 2012, the Group has been establishing a strong foothold in Shaanxi Province particularly Xi'an as a successful integrated financial services provider as well as a developer and operator in commercial properties and trade logistics park in the region, gathering years of extensive knowledge and insights of the local economy and the market. In the past few years, the Group witnessed phenomenal changes in the region's economic landscape, from being a backwater inland province in the western part of China to a developing region with robust potential. It is widely held that time has come for the region to regain its past glory and to be rebuilt as a cultural, political, economic, financial and technology hub of the Western China and along the areas covered by the Belt and Road Initiative. The changes are mostly attributed to a number of grand national policies launched by the Central People's Government of the PRC. In 2000, when the China's Western Development Strategy was introduced, Xi'an has become the focal point for the development of the China's central and north western regions, leading to the revitalisation of the land trade routes to Central Asia and Europe. The Belt & Road masterminded by President Xi in 2013 is likely to restore Xi'an to its former glory as both the origin and terminus of the ancient Silk Road. Furthermore, Xi'an is endorsed by the Chinese State Council to build up the Greater Xi'an into an international metropolis and be promoted as one of the nine National Central Cities in China. All these national development strategies have placed the Shaanxi Province, with Xi'an in particular, under the spotlight as the most promising development centre of China. As Xi'an is on track to catch up with the rest of the well-developed coastal areas, it provides both unprecedent challenge and opportunity for the Group. Since the Group has already well-positioned in the region, it has every reason for the Group to realise the first-mover advantages and benefits brought by the region's development in the coming era.
Given the Group's specialisation in financial services and its established connection with the international capital market through its home base in Hong Kong, itself being an important global financial centre, the Group is dedicated to act as a bridge between the international investment community and the growing Shaanxi enterprises which have diversified capital needs. On 26 April 2017, the Shaanxi Provincial Department of Commerce and Chinlink jointly organised the first Shaanxi-Hong Kong Financial Cooperation Exchange, gathering financial institutions from Hong Kong and Shaanxi Province to explore cooperation opportunities under the Belt & Road and the establishment of the China (Shaanxi)Pilot Free Trade Zone. This year, on 12 June 2018, the second Shaanxi-Hong Kong Financial Cooperation Forum was successfully held, also jointly organised by the Shaanxi Provincial Department of Commerce and Chinlink, with the supports from the Shaanxi Liaison Unit of The Hong Kong Special Administrative Region Government and The Stock Exchange of Hong Kong Limited. The theme of this Forum focused on how to bring foreign venture investment funds to connect with the Shaanxi enterprises and to explore the opportunity for those enterprises listing on the Stock Exchange, especially for the technology and IT companies with new business models qualified under the newly-adopted Stock Exchange listing requirements. The last two forums were so successful, and the Group has come to aware its important mission in bridging the Shaanxi Province and Hong Kong capital markets, it is the Group's resolve to organise this kind of forum every year with similar objective but with different theme to address the circumstantial needs of the Shaanxi enterprises. This will further strengthen the Group's position in Shaanxi Province to capture the arising business opportunities.
Xi'an, and even the entire Shaanxi Province, are renowned for its strong technology legacy in aerospace and aircraft engineering, equipment and machinery manufacturing, software development and outsourcing, etc. However, many of these are state-owned enterprises (“SOEs") and their technology and productions are not necessarily for civilian application and not market oriented. It requires a lot of capital and entrepreneurial skills to convert these technologies and know-how into viable businesses and to attract investors' attention. On the other hand, Xi'an is well-known for its standing in higher education and research achievements, ranks only after Beijing and Shanghai. There are over 60 colleges and universities in Xi'an, with an enrollment of over one million students from all over the country and over 300,000 graduates leaving schools every year. Both the provincial and municipal governments regard the deployment of technology and human resources by private enterprises as top priority and provide lots of assistance to the enterprises during their various development stages, including measures to take care of their capital needs. One of those notable policies is the “Longmen Scheme" which encourages Shaanxi Province and Xi'an enterprises to seek for public listing in domestic and overseas stock markets, including Hong Kong. Under this favorable environment, the Group has an important role to assist the enterprises by applying its financing expertise through its well-established comprehensive financial services platform. The Group's existing financing vehicles including Shaanxi Chinlink Financial Guarantee Limited, Chinlink Finance Lease Company Limited and the supply chain finance companies are all working on customised solutions to cater for Shaanxi Province enterprises' different working capital and investment needs. Furthermore, the Group will also go after the enterprises' equity funding opportunity by bringing in venture capitals and assist them in overseas listing through the Group's investment banking companies, the MCM Holdings Limited (“MCM Holdings") and its subsidiaries (collectively, the “MCM Group").
In November 2017, the Group completed the first milestone achievement of the Year with the acquisition of 51% controlling interest in the MCM Group. MCM Group is a boutique investment bank licensed by the Securities and Futures Commission (SFC) of Hong Kong to provide services including dealing insecurities and futures contracts, advising on securities and asset management, etc. This is a highly strategic move for the Group in the diversification of its scope of financial services, just in time for the Group to seize the opportunity to serve the huge capital need under the Shaanxi development plans. The Group is in the process of applying for setting up a private equity asset management company in Xi'an which targets to invest in the technology enterprises of high growth potential. MCM Group will also play an active role bringing in overseas venture capital and partnership, and provides corporate advisory services for Shaanxi enterprises seeking for initial public offering in Hong Kong or other overseas market.
The Group's two other major achievements during the Year are as follow.
Firstly, the Group has expanded its property investment portfolio through the acquisition of a construction-in-progress office building of which the majority of the space will be leased out and held for long term investment. Moreover, the Group has acquired the remaining 26.625%minority shareholding in the Daminggong Construction Materials and Furniture Shopping Centre (Dongsanhuan Branch) in Xi'an, allowing the Group to enjoy all the benefits brought by this lucrative operation and the future development potential of the Group's nearby undeveloped land right next to the Commercial Complex with the potential to build 119,000 square meters additional space. Both transactions will increase the Group's steady income base. Thus, the Group can continue to enjoy the upside potential of the Xi'an real estate market with a stronger asset base and will be in a better position to bargain for higher leverage ratio in terms of bank financing at more accommodating cost.
Secondly, the Group has successfully invited two SOEs as strategic partners investing into the Financial Guarantee Company and the Finance Lease Company. The investments from the two SOEs serve to strengthen the companies' capital base which is necessary for further business expansion, as well as to enhance their creditability and ratings favorable to their further external funding.
Concerning existing business, the Group has successfully rolled out the finance leasing business during the Year and has already secured a sizable leasing portfolio of diversified industries and geographical locations. Additionally, the Group's trading and supply chain finance operations recorded tremendous growths in terms of both revenue and gross profit and the financial guarantee operations were stable. Rental and management incomes gained from the Commercial Complex were also highly encouraging, it constantly maintained a very high occupancy rate and it reached 99% as of the end of the Year. The launch of the wholesale marketplace for building and construction materials and home furnishing products in phase one of the Chinlink • Worldport Integrated Logistics Park (located in the Hanzhong Baohe Logistics Park in Hanzhong City, a major city in the southwestern part of the Shaanxi Province) in the third quarter of 2018 and completion of the Commercial Building (as defined below) will also contribute new incomes to the Group.
The Group is full of confident about its future. It is now a truly multi-platform financial service provider both in traditional alternative financing in China and capital market services on international scale, supported by a pool of experienced financial professionals of multi-culture and multi-market backgrounds ready to deploy their expertise through the Group's financial platform. The Group also enjoys strong asset backing from its portfolio optimisation and continued investment in commercial properties and logistics park. The most important is, after many years' efforts, the Group has already established strong footing on one of the most promising growth regions of China. It has come to the time for the Group to realise its past cultivations.
Intelligent, creative, dedicated and responsible employees are the Group's most valuable assets in this challenging and competitive era. The Group would like to take this opportunity to thank its Board members, shareholders and diligent employees for their hard work, loyal service and contributions during the Year.
25 June 2018