Over Adamas Finance Asia’s (ADAM) full-year results period to 31 December 2019, the company’s NAV increased by 8% year-on-year driven mostly by a new investment which was acquired in exchange for the issue of the company’s shares. Highlights from post period-end activity include:
- Whilst the covid-19 pandemic continues to create global uncertainty, ADAM says it remains relatively well positioned and is in a strong liquidity position.
- The company’s investment portfolio from a valuation perspective has not been materially impacted in 2019 and the board expects this to remain the case in 2020.
- Whilst the markets in which the company’s portfolio companies operate have been affected by the pandemic to varying degrees, many of these countries, including China and Hong Kong, are exhibiting early signs of recovery with the gradual lifting of lock-down measures.
- Asian countries generally have benefited from the experiences gained from previous pandemics such as Bird Flu and SARS and this resulted in far quicker changes to behaviours and travel restrictions than was the case in the West.
- Through Harmony Capital (the manager), the company is also seeing an increasingly attractive and growing pipeline of investment opportunities in emerging and established small and medium sized enterprises across Asia, which are even more starved of capital, a situation that is accelerating due to the impact of this global pandemic.
- The company raised an additional US$1.7m through its corporate bond which was funded by high-net-worth individuals in the Middle East.
Portfolio expected to avoid material impact from the pandemic
John Croft, ADAM’s chairman, commented: “The board expects the company’s investment portfolio in 2020, from a valuation perspective, to avoid any material impact from covid-19. Many of the countries in which our portfolio companies operate, including China and Hong Kong, are exhibiting early signs of recovery with the gradual lifting of lock-down measures. Moreover, most Asian countries are benefiting from the experience gained from previous pandemics in the region.
We continue to draw comfort from this and the expertise, networks and robust risk management processes of our manager, which leaves the company well placed to come through this period stronger and to protect and grow the value of the business.
We are seeing an increasing number of attractive investment opportunities partly driven by the global impact of covid-19. The Asian SME sector was starved of capital prior to the impact of covid-19 and this financing gap will likely continue to widen in the short term, thereby further constraining their access to capital. ADAM is one of very few institutional sources of capital for this sector in the region and we are already seeing a very significant increase in pipeline opportunities as a result.
In 2020, we anticipate that income from our portfolio will continue to increase bringing us nearer to commencing dividend payments and I remain confident in the outlook for the business and of delivering value to our shareholders over the short and longer term.”
The board expects the company’s investment portfolio in 2020, from a valuation perspective, to avoid any material impact from covid-19. Many of the countries in which our portfolio companies operate, including China and Hong Kong, are exhibiting early signs of recovery with the gradual lifting of lock-down measures. Moreover, most Asian countries are benefiting from the experience gained from previous pandemics.
We continue to draw comfort from this and the expertise, networks and robust risk management processes of our Investment Manager, which leaves the company well placed to come through this period stronger and to protect and grow the value of the business.
We are seeing an increasing number of attractive investment opportunities partly driven by the global impact of covid-19. The Asian SME sector was starved of capital prior to the impact of covid-19 and this financing gap will likely continue to widen in the short term, thereby further constraining their access to capital. ADAM is one of very few institutional sources of capital for this sector in the region and we are already seeing a very significant increase in pipeline opportunities as a result.
The fact that our investment focus is diversified across sectors as well as geographies also ensures we can cherry pick the best deals without being constrained by a narrow investment strategy.
In 2020, we anticipate that income from our portfolio will continue to increase bringing us nearer to commencing dividend payments to our shareholders and I remain confident in the outlook for the business and of delivering value to our shareholders over the short and longer term.”
ADAM: Adamas Finance Asia not expecting material impact with Asian countries better positioned