The Company has officially changed its name from "E-Rental Car Company Limited" to "HongDa Financial Holding Limited" and its Chinese name from "宜租互聯網租車有限公司" to "弘達金融控股有限公司" in June 2016. The Board considers that the change of company name has better reflected the direction of the Group's business development, which is in the interests of the Company and the shareholders as a whole, especially in these challenging economic times. We constantly evaluate our business strategies towards, and the performance of, the business operations of the Group. It is dedicated not only to developing the Group's existing businesses but is also dynamic in pursuing business diversification to generate new avenues for growth.
The Group invested in a joint venture company in Harbin City of Heilongjiang Province, the PRC in November 2016, with a view to being interested in 4% of the joint venture Company with capital contribution of RMB100,000,000 (equivalent to approximately HK$112,000,000). The principal objectives of the joint venture company are the development of the businesses of internet microfinance, microfinance, discounted note, asset transfer, agency, subprime lending, and investments in the PRC.
On 20 January 2017, Finest Achieve Limited("Finest Achieve"), a direct wholly-owned subsidiary of the Company, entered into a shareholders’ agreement with, among others, Ever Step Holdings Limited ("Ever Step") and Charm Success Group Limited ("Charm Success"), pursuant to which Finest Achieve would provide a shareholders' loan to King Focus International Limited ("King Focus"). Finest Achieve has an equity interest of 14% in King Focus.
Well Up (Hong Kong) Limited("Well Up"), a wholly owned subsidiary of King Focus, has utilized the shareholders' loans from Finest Achieve, Charm Success and Ever Step to partly finance the acquisition of shares in Ping An Securities Group (Holdings) Limited ("Ping An Securities Group"), whose shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (stock code: 231) (the "Acquisition"). Completion of the Acquisition triggers an obligation of general offer to purchase its remaining shares ("Offer"). To complete the Acquisition and the Offer, Well Up obtained a facility ("Haitong Facility") from Haitong International Securities Company Limited. The Haitong Facility is in respect a credit facility of up to HK$1,464 million, and is secured by, among other collaterals, the several corporate guarantee granted by, amongst others, the Company in favor of Haitong International Securities Company Limited. (Please refer to the two announcements of the Company dated 20 January 2017 for details.)
One of the principal subsidiaries of Ping An Securities Group, Ping An Securities Limited, is mainly engaged in the provision of securities brokerage, securities underwriting and placements and financial advisory services. Ping An Securities Limited is a corporation licensed to conduct Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance. Our indirect investment via Well Up in Ping An Securities Group is in line with our repositioning more towards the business of provision of financial services.
The Group entered into a subscription agreement in May 2016 to issue convertible bonds for the maximum principal amount of HK$200,000,000 and all of these bonds were issued in full on 17 May 2016. This aptly shows that the bond holders have much confidence towards our business and market position in financial services.
Looking ahead, the Group will proactively identifying potential opportunities in acquisition of financial services. In addition, we will continue to seek different financing resources for our business expansion, and further fund raising exercises are expected. We believe that such process will further boost our interest income and achieve sound financial performance in the future.
Management of HongDa Financial
28 March 2017