Sheng Ye Capital Limited Announces 2018 Annual Results

During FY2018, the Group made total factoring income of approximately RMB470 million (2017: RMB215 million). The increase was due mainly to the Group's effort in expanding the factoring business using the proceeds from its listing in July 2017, proceeds from the completion of its placing exercise in July 2018, and borrowed funds. With regard to gain on sales of factoring assets, the Group achieved revenue of RMB125 million (2017: RMB58 million), representing a year-on-year increase of 114.7%, which was attributable to an increase in market demand for factoring assets.

The outstanding results achieved by the Group in FY2018 have proved that its development direction is correct. The Group has been attracting the attention of investors since its listing. The placing exercise completed in July 2018 not only facilitated the expanding of its shareholder base, but also in highlighting the tremendous confidence that investors have in the Group. The Group will continue to secure more efficient financing channels, both onshore and offshore; expand its customer base and the scale of factoring assets; focus on the construction, energy and medical sectors; and strengthen new and relatively low-cost financing channels to support the sustainable growth of its business.

Business ReviewSince its founding, Sheng Ye Capital has positioned itself as a specialized enterprise financial services provider offering accounts receivable financing and other related solutions to the energy, construction and medical sectors in China. It has also sought to develop the factoring service customer base, which consists of SME suppliers of state-owned enterprises (SOEs) and large-scale enterprises. The Group mainly provides account receivable financing of state-owned enterprises and large enterprises involved in the energy, construction and medical sectors, and also offers accounts receivable management services which include review and verification of account receivable related documents, and reports regularly to customers pertaining to such matters. In return, the Group receives interest income and also professional fees for the services rendered. It also derives income from the sale of rights of factoring assets.

The Group's encouraging business results during the 2018 financial year can be attributed to its high-end and quality customer base. The Group's customers are mainly SME suppliers of SOEs and large-scale enterprises seeking to improve supply chain management in their respective sector. The close ties that the Group has with these parties also help to promote its factoring service for their SME suppliers, thus creating ongoing business opportunities.

In view of the rapid and continuous growth of the new Big Data sharing sector and innovative "Internet+" national strategy, Sheng Ye Capital, on 15 June 2018, entered into a strategic cooperation agreement with yzw.cn, which is an integrated e-commerce platform owned by China State Construction Engineering E-commerce Company Limited, a member company of China State Construction Engineering Corporation. The strategic ties with yzw.cn enable Sheng Ye Capital to build on its own technological foundation and commence close cooperation with the platform in the supply chain business, construction engineering, and Big Data sharing sector.

The Group has achieved tremendous success in attracting investors. In June 2018, the Group was selected as a constituent of MSCI Global Small Cap Index- MSCI China Index, making it an investment target of index tracking funds and exchange-traded funds (ETF). In addition, in July 2018, the Group completed at the time the largest share placing among GEM listings of the year. Through the share placing, the Group received active engagement in the share subscription, and particularly from three investors, namely Taiping Trustees Limited, Olympus Capital Asia and Pavilion Capital Pte Ltd. Total net proceeds from the share placement amounted to approximately HK$819 million, which will be used for developing the Group's online factoring platform "Sheng Ye Tong" and IT systems, and also expanding the Group's factoring operation scale. The share placement not only provides Sheng Ye Capital with additional funding for supporting future business growth and broadening the Group's shareholder base, but also demonstrates clear evidence of its strengths and widespread appreciation among investors of its business development and future prospects.

ProspectsThe Group's listing on the Hong Kong stock exchange has resulted in the enhancement of its branding and image, further increase in investor awareness and recognition of the "Sheng Ye" brand, and more efficient financing channels both onshore and offshore. The funds raised from the listing and subsequent share placement completed in July 2018 have placed the Group in a stronger financial position with enhanced competitiveness. In the future, the Group will continue to focus on the construction, energy and medical sectors. It will work diligently to expand its client base and factoring assets, and explore new and relatively low-cost financing channels to raise funds for growing the business more cost-effectively.

Looking ahead, the Group will continue to capitalize on its strengths and core competencies to boost business growth. It will also allocate resources to develop its online factoring platform and enhance its risk management system, having been named "High-tech Enterprise in China". With its advanced "Sheng Yi Tong" online factoring platform and through a professional risk management mechanism, the Group can effectively offer customers with integrated factoring services including accounts receivable financing, accounts receivable management services and credit evaluation, in order to help them to secure funding at different stages of their trade.

About Sheng Ye Capital LimitedSheng Ye Capital Limited is a specialised enterprise financial services provider offering accounts receivable financing and other related solutions mainly in the energy, construction and medical sectors in the PRC. It has a strong capital base with its principal operating subsidiary in the PRC having a registered capital of US$100 million. For more information about Sheng Ye Capital, please visit: http://www.shengyecapital.com/^[1].

Media EnquiriesStrategic Financial Relations LimitedKatrina Leung Tel: (852) 2864 4857 Email: [email protected]^[2]Queenie Chan Tel: (852) 2864 4851 Email: [email protected]^[3]Vivian Lee Tel: (852) 2114 4950 Email: [email protected]^[4]Fax: (852) 2527 1196

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References

1. ^{^} http://www.shengyecapital.com/ (www.shengyecapital.com)
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