Jade Road Investments Ltd on Friday said its NAV per share was down by over 75% at the end of last year and conceded that 2022 was ‘challenging’, but insisted it was now in a stronger position following its restructuring and adoption of a new investment strategy.
Jade Road is a Hong Kong-based investment company focused on providing capital and financing to small and medium enterprises worldwide. Its portfolio includes Fook Lam Moon Holdings Ltd, Tellus Niseko and Meize Energy Ltd.
The company’s net asset value fell by 78% to $0.13 per share at December 31 from $0.58 per share at the same time one year prior. Its total NAV contracted 78% to $15.1 million from $68.0 million.
Jade Road reported a $52.9 million pretax loss for 2022, compared with $38.4 million in 2021. Gross portfolio income increased 12% to $2.8 million from $2.5 million, but its loss from fair value changes on financial assets widened to $47.4 million from $38.9 million and investment provisions swung to a $6.0 million loss from a $731,000 gain.
Jade Road previously was focused on investments in various Asian countries. In June last year, however, the company said it had swung to its $38.4 million loss in 2021 from a $1.6 million profit in 2020. It reported major impairment across its portfolio due to unprecedented headwinds caused by the Covid-19 pandemic and lockdown measures in China, Hong Kong and Japan.
On Friday the company said it intended to pivot away from Asian assets and diversify its portfolio by investing in ‘geographically diverse assets in more stable regions with stronger legal systems’. It therefore primarily focused on generating cash through disposals, for example completing partial divestment of its stake in Meize in August 2022.
Jade Road said it has now recovered from a ‘challenging’ year, and that its new investment strategy leaves it ‘in a strong position’ to becoming a dividend-paying vehicle in the future. It also said that construction work at a new Meize Energy factory in Xinjiang’s Mori Kazak county, which commenced operations in September, is expected to be fully completed in August 2023.
‘The company has pushed through the majority of its restructuring with a number of significant changes to its financial and operational structure,’ said Chair John Croft. ‘The upshot is that we now have a Company that is primed to push on with its new investment strategy.’
Shares in Jade Road were untraded at 1.25 pence each in London on Friday.
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