Adamas Finance NAV hit by dilutive issue

ADAM : Adamas Finance NAV hit by dilutive issue

Adamas Finance Asia saw its net asset value per share fall from 20.2 cents to 6.9 cents over the six months that ended on 30 June 2014. The principal reason for this was the fund’s issue (as a result of a reverse takeover) of 1.5bn shares at 6 cents in February 2014 – a significant discount to net asset value.

The five largest holdings at the end of June were

Changtai Jinhongbang Real Estate Development Co. Ltd (“CJRE”). The owner of a luxury resort and residential development project in Fujian Province, Eastern China.  CJRE expects to hold a grand opening of a new batch of villas and apartments ready for sale in the second half of the year.  The company is also in a discussion with one of the largest insurance companies in China, which may invest pension funds into part of the project.

Global Pharm Holdings Group Inc.(“Global Pharm”). A pharmaceutical company involved in pharmaceuticals, the cultivation of herbs for Traditional Chinese Medicine (“TCM”) herb cultivation, and TCM processing and distribution.  Headquartered in Shenzhen, Southern China, Global Pharm has recently completed two major acquisitions to enhance the TCM operations, and has positioned itself in a strong position within China’s high-margin ginseng business.

Fortel Technology Holdings Limited (“Fortel”). A platform provider for the distribution of online content in China which has developed an integrated content distribution platform for both content providers and consumers to sell and purchase premium digital content.  Following delays to a long-planned IPO for Fortel, the management team has been focused on the continuing development of innovative software application and e-commerce services, and is still preparing for an eventual listing on the Growth Enterprise Market board of the Hong Kong Stock Exchange.

Hong Kong Mining Holdings Limited (“HKMH”). A resources company whose primary asset is a large dolomite magnesium limestone mines in the province of Shanxi, China.  HKMH continues to prepare for an IPO on the Hong Kong Stock Exchange.

Meize Energy (“Meize”). A privately-owned company that designs and manufactures blades for wind turbines.  It has continued to ramp-up its production volume by utilising its existing facility and revenues for the current year are expected to exceed prior years, reflecting a growing order book.

The plan is to sell the assets in an orderly manner and reinvest the proceeds into income generating investment opportunities.