Dear Shareholders, On behalf of the Board of Directors (the “Board”) of Tou Rong Chang Fu Group Limited (the “Company”) (formerly known as PetroAsian Energy Holdings Limited), I hereby present the audited annual results of the Company and its subsidiaries (collectively the “Group”) for the year ended 31 March 2017.
For the financial year ended 31 March 2017, the Group recorded a consolidated revenue of approximately HK$13,832,372,000 (2016: HK$5,932,235,000) and a gross profit of approximately HK$312,721,000 (2016: HK$124,179,000), representing an increase of 133% and 152% from the year of 2016 respectively. The increase in the Group’s revenue and gross profit was mainly attributable to the continued significant increase in revenue of the commodity trading segment. The profit for the year attributable to owners of the Company was approximately HK$117,760,000 (2016: loss of approximately HK$227,059,000), representing an increase of 152% as compared to last year.
During the year under review, the performance of global economy remained stable, while events such as Brexit and U.S. presidential election only gave short concussion on the financial market. Although the PRC economy still faced the downward pressure, the situation was gradually stabilised. The oil price finally stabilised at a low level with its fluctuation slowing down relatively. Although the oil price was suppressed due to geopolitical factors as well as the new development of more energy substitutes such as flammable ice and shale gas, however, the demand for petroleum and corresponding derivatives chemicals products still maintained its growth. Over the years, the Group was able to grab the market opportunities and hence delivered a sound performance in terms of trading volume and revenue of the Group’s commodity trading business during the year.
Even though the commodity trading business remained our primary source of income, the Group has been committed to its business diversification in recent years. Following the obtaining of a license from Securities and Future Commission of Hong Kong to carry out type 1 (dealing in securities) regulated activities two years ago, last year, the Group also successfully obtained a license from Securities and Future Commission of Hong Kong to carry out type 9 (assets management) regulated activities. Since its commencement, the securities business has
been involved in the listing sub-underwriting works of several enterprises, with the development pace in line with the Group’s expectation. In addition, the Group progressed satisfactorily for its money lending business and achieved sound results last year as expected.
Looking forward, the performance of the global economy is still satisfactory under the easing monetary policy. Although the US Federal Reserve is gradually raising interest rates, the pace will be slow and only slight adjustment, hence the impact to the overall economy is minimal. The PRC economy is still under the structural adjustment stage and is expected to continue its up-going trend while remaining stable. As for Hong Kong economy, it has demonstrated a sound turnaround momentum in the beginning of the year with its property
market continues to maintain a strong growth, while the retail and tourism industry showed signs of recovery. Hence, the Group is prudently optimistic about the operating environment this year.
As both the PRC and Hong Kong economies remain stable, the stock market in Hong Kong reaches two years’ high and along with the increase in trading volume, such objective environment is favorable for the financial, especially the securities business. The Group will accelerate the development pace of the financial sector in the new financial year to gradually increase the proportion of the corresponding trade volume to the overall operation of the Group. To achieve such objective, the Group will actively recruit professionals in the sector and also intend to apply for a license from Securities and Future Commission of Hong Kong to carry out type 4 (advising on securities) regulated activities and plan to apply more licenses of different varieties for operating regulated activities, with a view to improve the comprehensive competitive strengths of the Group’s financial business and optimise the quality of the Group’s profit.
The insurance brokerage business is an integral part of the Group‘s development in the financial service sector. Currently, the Group is expanding its insurance sales team pro-actively and broadening the scope of its insurance products to cater for market demand, and discussing cooperation plans with different financial institutions, with the hope of developing this sector to become the new highlight of the Group’s business in the future.
With the Hong Kong economy continues to grow, together with the people’s active investment activities, the money lending business market will be booming. Meanwhile, competition will also intensify. The Group expects that, along with active stock market trading sentiment and robust investment atmosphere in property market, the money lending business market is expected to maintain its growth in the coming years and the Group’s money lending business will also benefit therefrom.
Whilst international oil price is expected to continue wavering at low level in the coming year, the energy consumption volume in China will continue to increase, in which it will push up the increase in demand for oil import and expect to bring positive impact to the Group’s oil trading business. The Group will keep up with the satisfactory performance in the existing product lines and explore new opportunities in the more energy-related markets to achieve a sustained and steady profit growth.
Subsequent to the reporting period, on 18 April 2017, the Group engaged Mr. Andrew Look as the Chief Investment Officer of the Group’s asset management business and as the Representative Officer of China Hong Kong Link Asset Management Limited, an indirectly wholly owned subsidiary of the Company. Mr. Look is a renowned and experienced professional in Hong Kong financial sector and has extensive experience in fund management. The Group firmly believes that his joining will speed up our development pace in financial business and establish a reputable financial service brand for the Group.
Finally, I would like to take this opportunity to express my sincere gratitude to the members of the Board, the management and all our dedicated staff for their invaluable services for the Group over the year. I would also like to thank our shareholders and business partners for their ongoing support and trust. We are well positioned to deliver further growth on our shareholder’s value.
Hong Kong, 23 June 2017