enterpriseAsia.com PLC
31 October 2000
enterpriseAsia.com plc - 2000 Interim Report
Chairman's Statement
Dear Shareholder,
I am pleased to present to you your company's first business
and financial report from the Board of Directors, covering
the period from January 11, 2000 (date of incorporation) to
June 30, 2000 (the 'Period').
Results
For the Period, your company and its subsidiaries recorded
an unaudited consolidated loss of GBP27,528. The unaudited
net asset value per share was 4.8p as at June 30, 2000.
Flotation on AIM
Your company was successfully floated on the Alternative
Investment Market of the London Stock Exchange on February
22, 2000. Approximately 239,600,000 new shares were issued
at 5p each, bringing total net cash proceeds, after
flotation expenses, of approximately GBP11,600,000 for
investment and working capital.
Business Strategy
Your company was formed to invest in start-up and early
stage internet and information technology ('IT') companies
with a focus upon Asia, in particular the Far East. We seek
to provide the capital and strategic support to projects
with the potential to offer reasonable returns. The
company's aim is to realise these investments at the
appropriate time, most probably through a trade sale or
flotation. As a general rule, the company does not take up
a controlling interest in any investee project, but board
representation is mandatory.
Implementation of Strategy
During this initial period your company's resources are
focused mainly on investment opportunities arising from the
Greater China markets (i.e. Mainland China, Hong Kong and
Taiwan), as this is the region in which your Board of
Directors is best connected and most experienced.
Your investment management team operates from their base in
Hong Kong, which provides proximity to our key markets and
is within a stable legal and financial environment.
Notwithstanding the team's in-depth knowledge of this
market, investment evaluation always follows a rigorous set
of procedures which consider the commercial, technological,
financial and legal aspects of a prospective project, taking
into consideration the culture and business dynamics
specific to the relevant markets. On average, the
evaluation process on any project, from initial approach to
completion, takes between 4 to 5 months.
The Investment Portfolio
Since our flotation in February, we have invested in a total
of 8 projects as follows:
Month Original % of
Investment Investment Equity
was made Approximate Held
(amount in
GBP)
Invested on or before June
30, 2000 -
P&S International Limited June 856,000 2.2%
2000
iBASE Holdings Limited June 257,000 49%
2000
Invested after June 30, 2000
-
Cybermax Network Technology Sept 1,379,000 49%
Limited 2000
Best Wisdom Limited Sept 1,280,000 50%
2000
Net Fun Limited Sept 1,223,000 8%
2000
CFN (UK) Limited July 1,200,000 39.99%
2000
ecAgent.com Limited Aug 2000 1,170,000 33%
Winshare Technology Limited July 252,000 50%
2000
A summary of these projects can be found in the list after
this Statement. All of them are now progressing according
to their respective business plans at the time of our
investment. Your management representatives in each of the
projects are involved actively in their business
developments.
Market
Since your company's flotation, the worldwide capital market
has changed significantly with regard to investors' views
about internet and IT related businesses. The sentiment has
entered a rationalisation stage in which business valuations
and prospects are now measured in a more realistic,
practical manner. Since we have always adopted a prudent
evaluation approach based on fundamental factors, your
company has avoided investing in any project that belongs to
the over-valued, over-spent category.
While our network of investments will steadily expand beyond
the Greater China region, the largest potential in the Far
East will undoubtedly come from Mainland China. Positive
domestic macro-economic factors, a favourable world trade
climate and a population increasingly ready to adopt new
consumer technology will all be the catalysts for a fast
growing IT sector. Recently introduced regulations on
internet businesses have added elements of certainty to the
sector and clearly reflect the Chinese government's
recognition of the business potential which exists. While
consolidation in the sector will be as inevitable as it is
in western countries, the critical success factor for a
foreign investor lies in understanding the intricate
relationships among government policies, business logistics
and social fabric of the region.
Our medium to long term view on the IT market in the Far
East remains optimistic. We believe that under our existing
strategy your company is well positioned to benefit from the
region's rapid growth.
The Future
Your management team will continue to monitor and support
the progress of those projects in our existing portfolio.
The team's connections and experiences in the region are
expected to provide useful contribution to the projects.
Meanwhile, new projects will also be evaluated basing on the
existing investment strategy and criteria. A steady inflow
of quality deals is foreseen.
Furthermore, we shall keep our eyes and minds open to any
other concrete opportunities that may complement our
existing strategy and further enhance shareholder value.
Dividend
Your Directors are not recommending the payment of a
dividend for the period being reported.
Peter So
Chairman
Your Investment Portfolio
P&S International Limited ('P&S International')
P&S International designs, produces and markets semi-
conductor chips that connect appliances and equipment to the
internet. Such connectivity will enable remote control of
home appliances and business equipment. Based on a cost-
effective technology platform that does not directly rely on
TCP/IP, the methodology is now pending US patents. P&S
International plans to market its products worldwide at
highly competitive prices and an office in the USA is
currently being established.
iBASE Holdings Limited ('iBASE')
iBASE provides information technology and e-commerce
solutions to a wide spectrum of companies, including multi-
nationals, but has a particular focus on the Greater China
market. Its strength lies in areas such as online payment
logistics, Linux server solutions and internet-enabled
automated systems customised for specific industries.
Cybermax Network Technology Limited ('Cybermax')
Cybermax operates websites displaying recruitment
advertising for part-time jobs. It has already launched a
website of this nature in Hong Kong, and there has been a
positive response from both job seekers and recruiters.
Similar operations are now being established in China and
Japan; other Asian countries will also be covered
progressively.
Best Wisdom Limited ('Best Wisdom')
Best Wisdom is engaged in the business, to be branded
'Unified Financial Omnibus', of developing and providing
software systems to assist stock brokers, fund houses and
custodian banks in the trading, fund management and
custodianship of Hong Kong and overseas securities. The
core of its system is a comprehensive back office online
trading system covering the needs of stock brokers in
clearing, settlement, accounting and reporting. The
relevant components can be further adapted and enhanced to
evolve into systems catering for the needs of fund managers
and custodian banks.
Net Fun Limited ('Net Fun')
Net Fun has been one of the market leaders among Greater
China's game providers. Its strength lies in the ability to
provide interactive edutainment services via the internet,
with contents fine-tuned to the local language and culture.
Its vision is to build a virtual community for the Chinese
population. Net Fun's other shareholders include a
subsidiary of Cheung Kong (Holdings) Limited and parties
associated with Excel Technology International Holdings
Limited, a company listed on the Growth Enterprise Market of
Hong Kong Stock Exchange. By leveraging on the support from
these shareholders, Net Fun is expected to benefit from a
strong marketing and distribution network, as well as
advanced internet technology expertise and infrastructure.
CFN (UK) Limited ('CFN UK')
CFN UK is part of Cyber Financial Network ('CFN Network'),
and plans to become a technology enabler for small to medium
sized brokers and financial institutions in the UK. Such
institutions can expand into internet and overseas
investment vehicles, thus maintaining their competitive
position. A management team has already been recruited for
CFN UK, which will launch its products towards the end of
2000. The CFN Network is being established by CFNasia
Holdings Limited and its coverage will include Europe, the
USA and the Far East.
ecAgent.com Limited ('ecAgent')
ecAgent will provide a virtual office environment to
insurance sales agents in Greater China. It will offer a
comprehensive range of sales management, administrative,
marketing and financial functions that can facilitate the
agents' daily sales and administrative needs, thus freeing
them to become more effective in their income producing
sales work. It is expected to generate a loyal and captive
target user group which also offers prospects in other
related activities.
Winshare Technology Limited ('Winshare')
Winshare is developing major components for online stock
trading systems used by brokers in Hong Kong. These
components will be compatible with new industry standards,
the implementation of which, coupled with the fast growing
trend in internet trading, is expected to result in
significant demand. Winshare's product development will be
ahead of the main competition and is expected to benefit
from a first mover advantage.
enterpriseAsia.com plc
Consolidated statement of total return (incorporating the
revenue account)
Unaudited
period ended
30 June 2000
Revenue Capital Total
£ £ £
Interest receivable and 216,918 - 216,918
other income
--------- -------- ----------
Gross revenue gains/
capital (losses) 216,918 - 216,918
Other administrative (244,446) - (244,446)
expenses
---------- ---------- ----------
Return on ordinary
activities before (27,528) - (27,528)
Taxation
Taxation on ordinary - - -
activities
---------- ---------- ----------
Return on ordinary
activities (27,528) - (27,528)
after taxation
========== ========== ==========
Return per ordinary share
-Basic (0.015)p - (0.015)p
========== ========== ==========
The revenue column of this statement is the profit and loss
account for the group.
enterpriseAsia.com plc
Consolidated balance sheet
Unaudited
period ended
30 June 2000
£
Fixed assets investments - 1,112,758
Investment portfolio
Tangible fixed assets 2,635
---------
1,115,393
---------
Current assets
Debtors 52,199
Prepayments 389
Cash at bank and in hand 10,477,826
----------
10,530,414
Creditors: amounts falling due 101,580
within one year
------------
Net current assets 10,428,834
------------
Total assets less current 11,544,227
liabilities
============
Capital and reserves
Called-up share capital 2,395,985
Share premium account 9,175,770
Capital reserve -
Revenue reserve (27,528)
-------------
Equity shareholder's funds 11,544,227
==============
Net asset value per Ordinary
Share:
Basic 4.8p
============
enterpriseAsia.com plc
Consolidated cash flow statement
Unaudited
period ended
30 June 2000
£
Net cash inflow from operating activities
Return on ordinary activities (27,528)
Depreciation of tangible fixed assets 236
Increase in debtors (52,588)
Increase in creditors 101,580
------------
Net cash inflow from operating activities 21,700
Investing activities
Payment to acquire fixed assets:
-Investment portfolio (1,112,758)
-Tangible assets (2,871)
------------
Net cash outflow before financing (1,093,929)
Financing
Proceeds from issue of share capital and share
options 11,979,924
Cost of shares issue in period (408,169)
--------------
11,571,755
Increase/(decrease) in cash balances 10,477,826
==============
Reconciliation of net cash flow to movement in
funds
Increase in cash in period 10,477,826
Closing net funds 10,477,826
=============
enterpriseAsia.com plc
Consolidated interim announcement - Notes
1. The information relating to the period ended 30 June
2000 is unaudited and covers the period from incorporation
on 11 January 2000.
2. The above financial information does not constitute
statutory accounts within the meaning of Section 240
Companies Act 1985.
3. Loss per share is based on the weighted average number
of shares in issue during the period ended 30 June 2000 of
181,091,887.
4. Unquoted investments have been valued at cost.
5. The Directors' direct and beneficial interests in the
Company's share capital at 30 June 2000 is as follows: -
Peter So 20,000,000
Benjamin Ng 400,001
Siu Fai Ng 11,000,000
Phillip Brown 10,000,000
(i) StartIT.com plc ('StartIT') holds 10,000,000
enterpriseAsia .com plc ('enterpriseAsia') ordinary shares.
Peter So, Siu Fai Ng and Phillip Brown are directors of
StartIT. Vintage Investments Limited (of which Peter So and
Phillip Brown are both directors and shareholders) holds
5,000,000 StartIT ordinary shares.
(ii) Clarest Holdings Limited (of which Peter So is a
director and shareholder) holds 10,000,000 enterpriseAsia
ordinary shares and is also a shareholder of Vintage
Investments Limited.
(iii) Rich Project International Limited holds 1,000,000
enterpriseAsia ordinary shares. Siu Fai Ng is a director
and shareholder of Rich Project International Limited which
in addition holds 5,000,000 StartIT ordinary shares.
6. The Directors hold the following options over ordinary
shares of 1p each in the Company at 30 June 2000.
Director Option Scheme Number of Exercise Exercise
options Price period
Peter So Unapproved 200,000 5p To 7 February
2010
Benjamin Ng Unapproved 400,000 5p To 7 February
2010
Siu Fai Ng Unapproved 200,000 5p To 7 February
2010
Phillip Unapproved 200,000 5p To 7 February
Brown 2010
enterpriseAsia.com plc
7. Copies of the interim statement, which will be sent to all shareholders
shortly, will be available from the registered office at Parkland Business
Centre, Greengates, Bradford, West Yorkshire BD10 9TQ.