Yangzijiang Financial has reported earnings of $137.7 million for the 1HFY2025 ended June 30, 28% higher y-o-y. Diluted earnings per share (EPS) stood at 3.96 cents, up from 3.04 cents previously.
Total income, however, fell by 23% y-o-y to $123.6 million. This was mostly due to the decline in interest income, which fell by 33 y-o-y to $71.7 million, attributable to a lower average balance of debt investments in China. The move is said to align with the group’s ongoing sector rotation strategy away from underperforming industries.
Interest income from the group’s debt investment business in China fell by 31% y-o-y to $49.1 million, while interest income from cash management activities fell by 36% y-o-y to $22.6 million. The decline was also attributed to the net fair value loss of $7.5 million, compared to a gain of $25.3 million in 1HFY2024, mainly due to contributions from derivative financial instruments due to downward mark-to-market fluctuations.
The declines were offset by an 82% y-o-y increase in income from maritime fund assets of $40.1 million. A surge in income from Singapore-based funds of $18.5 million, compared to $3.8 million in 1HFY2024, also helped.
During the six months, the group also reversed credit loss allowances on debt investments at an amortised cost of $13 million by managing its non-performing loans.
In the 1HFY2025, share of profits of associated companies also stood at $29 million, reversing from last year’s $4.8 million loss. The growth this time was mainly due to a $9.8 million gain from upward market movements in equity securities held by associated companies in China. It was also due to a gain of $19.2 million from the joint venture investment in the maritime business.
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Other gains rose by 30% y-o-y to $27.8 million, which mainly comprised net foreign exchange (forex) gains of $24.4 million and government grants of $3.4 million.
No dividend was declared for the period.
In the next 12 months, the group says it will focus on spinning off its maritime investment business to be listed on the Mainboard of the Singapore Exchange (SGX). The spin-off listing will “integrate maritime industry expertise with investment management capabilities to unlock growth potential across the entire maritime value chain”, says the group in its Aug 12 statement.
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In the longer term, the group says it intends to “deepen its presence” in Southeast Asia through debt investments in Indonesia, Vietnam, Malaysia, and the Philippines. It also means to expand its cross-border wealth management offerings, pursuing co-investments with partners, and tapping selective equity opportunities to enhance recurring income and portfolio diversification.
“We are encouraged by the revitalisation of Singapore’s capital market, underpinned by supportive government initiatives and rising foreign direct investment. As the city-state strengthens its position as Southeast Asia’s leading dealmaking hub, we see this as a timely opportunity to accelerate capital deployment, building on steady capital appreciation through disciplined cash management and capital preservation,” says executive chairman and CEO Ren Yuanlin.
“The proposed spin-off of our maritime investment business represents a timely move to streamline our structure and sharpen strategic focus. I’ll be chairing the spin-off group, and with the support from our well-established maritime investment management team, I am confident in our ability to capitalise on growth opportunities amid favourable industry tailwinds, drive fairer valuations, and deliver long-term sustainable value to our shareholders,” he adds.
Shares in Yangzijiang Financial closed 1.5 cents higher or 1.54% up at 99 cents on Aug 12.
