Maximising Extraordinary Asset Base
May 10, 2005
Maximising Extraordinary Asset Base With Global Partners Key To Richina Pacific’s Future
Statement based on comments made at today’s annual meeting
Richina Pacific Limited held in Auckland
Richina Pacific will seek global operating companies as partners to assist it realise the value of the operating companies and the real estate it controls and owns in China. In a far ranging address at today’s annual general meeting held in Auckland, Chairman John Walker outlined the future of the company as it seeks to utilise its “extraordinary asset base” and leverage its “China knowledge”.
Mr Walker told shareholders that sooner or later most international businesses will establish operations in China.
Many will choose to do so through a “trustworthy partner” with an established China track record rather than attempt to penetrate the attractive but difficult China market by themselves.
He said Richina Pacific, with its structures, experiences, local knowledge and western-based governance structure, could leverage an international partner’s proven business models, technical know how, brands and distribution.
Richina Pacific was, he said, uniquely positioned to successfully partner with global companies.
“The value proposition we offer is that we can make an international company work effectively and efficiently in the Chinese environment, while doing so profitably and with integrity.”
Mr Walker said that the recent acquisition of the Shanghai Leather Company, which brought with it ownership control and interests in more than 50 former Chinese State-owned enterprises, and controlling rights over 43 parcels of land in Shanghai, had transformed Richina Pacific.
Today, the company operates in four broad sectors – finance, land, industries and services – and its role had changed to one of “linking China and the world”.
He said property and land development in China would become a “very significant” business for Richina Pacific.
“We will not be able, nor should we try, to develop all the assets we currently own in China through our own resources.
“We need to attract the involvement of global partners, both operationally and financially.
“And we need to work as partners with the best world class architectural firms, property developers, construction firms and contractors.”
Mr Walker said that managing and developing the company’s China assets and increasing their value would require significant amounts of capital. Sources of this new capital could come from the issue of new shares, or co-investment with unrelated or related parties.
He said the Board and management was focusing on long-term funding plans, and shareholders would be asked to consider options at the next annual meeting.
“We need to pursue those financial and strategic partnerships with international companies that can best maximise the potential of our assets in China while creating great value for Richina Pacific shareholders,” he said.
Mr Walker told the meeting that:
After one quarter, trading was on target to achieve an annual result that exceeded last year’s financial result The first quarter’s result was ahead of expectation with a net profit of US$138,000, compared to a loss of US$800,000 for the same period last year, on revenues of US$107 million, up 42% from the same period last year The company would in the future report on a quarterly basis A listing on the Singapore Stock Exchange would be sought within the next few years Singapore-based Mrs Suet Fern Lee, the Founder and Senior Director of Singapore law firm Stamford Law Corporation, had been appointed as an independent director with effect from July 1, 2005.