TIDMADAM
RNS Number : 7809F
Adamas Finance Asia Limited
19 November 2020
ADAMAS FINANCE ASIA LIMITED
(" ADAM " or the " Company ")
Unaudited Net Asset Value and Portfolio Update
for the Quarter ended 30 September 2020
Adamas Finance Asia Limited (AIM: ADAM), the London quoted
company focused on providing shareholders with attractive
uncorrelated, risk-adjusted returns from a diversified portfolio of
pan-Asian investments, is pleased to provide the following update
for the quarter ended 30 September 2020.
NET ASSET VALUE
The Company delivered consolidated unaudited estimated Net Asset
Value ("NAV") per share on 30 September 2020 of GBP 0.73/USD 0.95
(30 June 2020: GBP 0.75/USD 0.95). The consolidated unaudited
estimated NAV on 30 September 2020 was USD 99.4 million (30 June
2020: USD 100.2 million). The NAV decrease was impacted by a slight
increase in liabilities during the quarter. The Company has used a
USD:GBP exchange rate of USD 1.00:GBP 0.77 as of 30 September 2020
to determine GBP values.
Post the reporting period, at the beginning of 4Q 2020, the
Company completed an Open Offer and Placing following the issue of
8,356,663 Open Offer and Placing Shares for the total amount of GBP
1,991,916. The Company awaits receipt of the remaining placement
monies from one of its Placees for the amount of GBP1,142,794 which
have been delayed due to issues raised by the Placee's remitting
financial institution. The Company has been in regular contact with
the Placee and has received information that a second (of
equivalent in value) transfer will be initiated to cover the
receipt of outstanding funds. ADAM remains confident in the receipt
of the outstanding monies.
John Croft, Chairman of Adamas Finance Asia Limited,
commented:
"The Company's portfolio has remained resilient in the face of
the headwinds created by COVID-19, with the underlying valuations
being mostly unaffected. The Company is confident in the current
valuations moving forward mainly because ADAM's investments are
consistently structured with downside protection, as well as their
diversified nature, and their location in a region which has
learned well from previous outbreaks and is now reopening and
recovering.
The Company's fundraising capabilities were demonstrated during
the period with ADAM successfully raising a further US$1.7 million
through ADAM's corporate bond. The Company also undertook its first
equity raise by way of Open Offer and Placing to raise GBP3.13
million (US$3.8 million) through the issue of new ordinary
shares.
The Company's investment manager, Harmony Capital Investors
Limited, is continuing to see an increasing number of attractive
investment opportunities providing similar yields to previous
investments the Company has made. The Company believes that
COVID-19 further exacerbates the inability for high growth SMEs to
access capital, ultimately reinforcing the Company's ability to
invest in strong, well-managed but capital-starved companies.
The Board remains cautious during the COVID-19 pandemic, but it
is confident in the outlook for the Company and of delivering value
for its shareholders in the longer term."
UPDATE ON KEY PORTFOLIO INVESTMENTS
Future Metal Holdings Limited ("FMHL" or the "Quarry") - 44% of
NAV
After recommencement in late 2019, the operations of the Quarry
were temporarily halted between January 2020 and early March 2020
due to the Chinese New Year and then the COVID-19 epidemic in
China. In line with uptake in industrial activity in China, the
management team resumed work in mid-March 2020 and started the
construction of environmental facilities on site to complete its
compliance with local requirements. All on-site construction
activities were completed by the end of June 2020 when production
resumed.
The management team renewed the Quarry's Mining Licence on the
2nd of August 2020. The new licence is valid until the 13th of
March 2023. The team also secured a Work Safety Permit on the 18th
of August 2020 which is valid until the 16th of August 2023. The
General Manager is working with the Ministry of Ecology and
Environment on the formal approval of the onsite environmental
facilities and the issuance of a Pollution Discharge Permit. The
permit is expected to be issued in 4Q 2020, at which point the
Quarry will be fully licenced.
Sales activities have started to pick up from July 2020. The
management team is actively pursuing sales orders from buyers in
the local region.
Fook Lam Moon Holdings ("FLMH") - 28% of NAV
Fook Lam Moon's restaurant operations have gradually returned to
normal during 3Q 2020, as the Hong Kong Government has relaxed
certain social distancing measures that were previously in place to
curb the spread of COVID-19. Nevertheless, Fook Lam Moon's
management continues to take active steps to safeguard the health
of guests and staff, including regular disinfection of all dining
rooms and dining utensils as well as the installation of additional
private dining areas for guests' usage.
Meize Energy ("Meize Energy") - 8% of NAV
Meize Energy opened a new production facility in Jiangsu
Province which aimed to diversify its operations from supplying
onshore wind turbine blades into supplying blades for offshore wind
turbines. Meize Energy has another two production facilities in
China, namely in Ningxia and Inner Mongolia. The new production
facility is estimated to produce 400 sets of wind turbine blades
per annum at full capacity.
Infinity TNP - 7% of NAV
Outbound tourism to Niseko from Greater China and other parts of
the world has been affected due to international travel bans
brought on by COVID-19. Several of Niseko's major ski resorts such
as Grand Hirafu and Rusutsu have recently released statements
announcing that several operational changes will be implemented for
the upcoming Winter Season, including reduced ski lift operations
and closure of select restaurants. The local management team at
Tellus Niseko has been monitoring the situation in Japan closely
and it is expected to implement similar operational changes at the
property and as required. Essential controls and processes will
remain in place on-site to ensure guests' safety and hygiene. Once
travellers are able to return to the region, occupancy levels are
expected to return to normal as Japan gradually lifts travel
restrictions and management expects the revival of local
tourism.
DocDoc Pte Ltd ("DocDoc") - 2% of NAV
DocDoc has been making significant progress to secure contracts
from a number of insurance providers and global banks within the
South East Asia and North Asia region. As a consequence of the
uncertainties created by the COVID-19 pandemic, these parties see
the need to enhance their core offerings to policyholders and
employees and are more incentivised to be innovative and
tech-enabled in order to obtain a competitive edge. A number of
these potential clients have undergone pilot programmes to trial
DocDoc's offering and are in the final stages of discussing binding
contracts with the business.
Infinity Capital Group Limited ("ICG") - 2% of NAV
As the COVID-19 pandemic continues to impact Japan and the
Hokkaido region during 3Q, there has been no construction
activities in Niseko. ICG is working closely with local management
to monitor the domestic property market and the local market's
response to the pandemic. In December 2019, construction was
completed of ICG's Tellus Niseko residential apartments, which were
leased to guests in January 2020 in line with management
expectations. ICG is finalising the strata title registration in
the local government for the Tellus Niseko project.
For further information, please visit the Company's website at
http://adamasfinance.com and follow the Company on Twitter (@
AdamasFinance ).
FOR FURTHER INFORMATION, PLEASE CONTACT:
Adamas Finance Asia Limited +44 (0) 778 531 5588
John Croft
---------------------
WH Ireland Limited - Nominated Adviser +44 (0) 20 7220 1666
---------------------
James Joyce
---------------------
James Sinclair-Ford
---------------------
Pello Capital Limited - Joint Corporate
Broker +44 (0) 20 3700 2500
---------------------
Mark Treharne
---------------------
Maitland/AMO - Communications Advisor +44 (0) 20 7379 5151
---------------------
James Benjamin
---------------------
Peter Hamid
---------------------
About Adamas Finance Asia
Adamas Finance Asia Limited (ADAM) is quoted on the AIM Market
of the London Stock Exchange and is committed to providing
shareholders with attractive uncorrelated, risk adjusted long-term
returns from a combination of realising sustainable capital growth
and delivering dividend income.
The Company is focused on providing growth capital and financing
to emerging and established Small and Medium Enterprises (SME)
sector throughout Asia, well diversified by national geographies,
instruments and asset classes. This vital segment of the economy is
underserved by the traditional banking industry for regulatory and
structural reasons.
The Company's investment manager, Harmony Capital, seeks to
capitalise on its team's established investment expertise and broad
networks across Asia. Through rigorous diligence and disciplined
risk management, Harmony Capital is dedicated to delivering
attractive income and capital growth for shareholders with
significant downside protection through selectively investing in
assets and proactively managing them.
Harmony Capital is predominately sourcing private opportunities
and continues to create a strong pipeline of attractive income
generating assets from potential investments in growth sectors
across Asia, including healthcare, fintech, hospitality, IT, and
property.
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