Our Core Values
Chinlink International Holdings Limited and its subsidiaries continues to expand and strengthen its position as a financial services provider focused on the optimisation of supply chain cash flow of SEMs operating in China and Hong Kong. The Group also provides logistics services, targeting the same SME customer base, which we use as a tool to control the collateralised inventory under financing agreements. By integrating financial services with logistics and business operations we are able to create a unique “finance-ecosystem" providing customised supply chain finance solutions to our customers whilst building an effective system to manage credit risk.
Although capital markets in China are maturing, SMEs in China still face tight credit conditions and difficulties in obtaining bank financing due to inadequate credit reference systems and prevailing monetary policies. However, our established finance-ecosystem is able to provide SMEs with comprehensive financial services, including financing guarantee, supply chain finance, and finance leasing services, due to launch in Q3 of 2017/2018.
Chinlink continues to actively seek new partnerships as we look to increase the scale of financing business. In April 2017, the Group officially signed an agreement with Hanzhong City Hantai District Hanjiang Industrial Park Construction Investment Development Company Limited, in relation to a capital injection of approximately RMB100 million into Shaanxi Chinlink Financial Guarantee Limited. This cooperation with the government has provided additional capital for us to expand our business and we expect further benefits from the injection of state-owned capital including an increase in the diversity of our customer base and greater access to bank financing. Also in April 2017, the Group signed an agreement with Zhong Jinlv Investment Holding Company Limited, for a capital injection into Chinlink Finance Lease Company Limited, of approximately RMB120 million. With this, the Group will be able to fast-track the growth of the business and capitalise on the financial and political advantages brought by state-owned capital.
In addition, in order to further enrich our financial service offerings and enhance the synergistic effects, we are in the progress of applying the Internet micro finance and factoring licences. Hopefully, the approvals will be granted in 2017/2018 financial year.
The development of Chinlink • Worldport Integrated Logistics Park located in Hantai District, Hanzhong City of Shaanxi Province, the PRC will not only generate stable rental income for the Group, but the launch of the Daminggong (Hanzhong) Building and Construction Materials Wholesale Center, which is located in Phase One of Chinlink • Worldport, is expected to accelerate the development of Chinlink • Worldport into a significant regional trade and logistics hub. We expect Chinlink • Worldport to generate rental income and management fees and to create synergies with the other Group businesses, supporting our expansion in financial services and providing an expanded customer base for our comprehensive supply chain services, allowing us to realise attractive financial returns over the following years.
We expect our new investments in properties to greatly benefit the Group. In May 2017, the Group acquired a 100% interest in the parcel of land with a site area of approximately 9,100 square meters situated at the junction of Fengcheng Tenth Road and Wenjin Road, Weiyang District, Xi'an, Shaanxi Province, the PRC, and the construction in progress thereon. The Commercial Building comprises a 25-level office development plus a 2-level basement carpark which are currently under construction. On completion, which is expected by Q2 of 2018, the approximate 55,491 square meter gross floor area office complex will be leased. We expect the Commercial Building project to strengthen and expand our client base as new tenants move in, and the rental income generated will enhance our cash flow for investment into our current and new businesses.
Also, we are continuously looking for new investment opportunities in financial services. On June 2017, the Company, Trillion Up Limited, Instant Karma Global Holdings Limited and two independent third parties entered into the an agreement, which enables us to expand our business into dealing in securities, dealing in futures contracts, advising on securities, and asset management upon approval from the Securities and Futures Commission in Hong Kong, which will ultimately allow us to become a more comprehensive financial services provider. With our strong presence in Xi'an, we are optimistic in our ability to introduce other Xi'an, and greater Shaanxi area, companies to the Hong Kong capital markets under the new partnership.
Looking forward, with the recent rapid development of Xi'an brought about by the Belt and Road Initiative and the launching of the China (Shaanxi) Pilot Free Trade Zone on 1 April 2017, we are confident that the region will continue to grow in the coming years, and that we will be able to take advantage of this growth by expanding our businesses through ongoing cooperation with stakeholders and through new partnerships. Our finance-ecosystem business model provides a solid foundation for the integrated supply chain and financial services businesses, and the Group will continue to seek experienced and talented individuals, as well as select appropriate partnerships in China, to help us build a stronger business.
Last but not least, I would like to express my appreciation for the continued support from our shareholders, and the diligent contribution from the management team and all co-workers throughout the year. I look forward to working closely with every one of you, in leading Chinlink towards becoming an outstanding financial services provider.
Hong Kong, 30 June 2017