Sunwah International Reports First Quarter Fiscal 2021 Results

TORONTO, Nov. 13, 2020 /CNW/ - Sunwah International Limited, TSX: SWH ("Sunwah International" or the "Company"), a Hong Kong based investment firm and member of major Asian conglomerate, Sunwah Group, today announced its financial results for the first quarter ended September 30, 2020, reporting a net loss of US$0.15 million.  All figures quoted are in U.S. dollars.

Q1 FY2021 Highlights:

• A loss before tax of $0.20 million (Q1 FY2021: loss of $0.78 million);
• A loss attributable to shareholders of the Company amounting to $0.15 million (Q1 FY2020: loss of $0.69 million);
• A share of profit of an associate of $0.02 million, representing results from the Company's primary investment in financial services through Sunwah Kingsway Capital Limited (Q1 FY2020: a share of loss of an associate of $0.35 million);
• Revenues from the Company's Restaurant Operations investment (through HFL Limited) of $0.56 million (Q1 FY2020: $0.83 million);
• Cost of sales for Sunwah International's Restaurant Operations investment, HFL Limited, of $0.18 million (Q1 FY2020: $0.23 million);
• Selling, general and administrative expenses of $0.73 million with HFL Limited accounting for approximately $0.60 million (Q1 FY2020: $1.03 million total with $0.77 million from the operation of HFL).

"Thanks to a combination of improved market sentiment, prudent investment policy and government subsidies designed to stimulate economic recovery in Hong Kong during the Covid-19 pandemic, Sunwah International managed to pull off a stable first quarter performance given an operating environment characterized by unprecedented uncertainty,"  said Michael Choi, CEO of Sunwah International.  "While we remain hopeful that Hong Kong is indeed over the long list of hurdles presented by the past year, it is also entirely possible for economic volatility to continue within this region and globally in the short to medium term.  Should this be the case, we are confident in our ability to cope with challenging markets and return to growth afterward drawing on our 30-year track record for successfully navigating numerous market downturns and crises." 

Markets embarked on a recovery trend throughout the first quarter of Sunwah International's 2021 financial year benefitting from the implementation of aggressive fiscal and monetary policies at the hands of global governments designed to stimulate the economy in the wake of Covid-19 business shutdowns. Hong Kong bore the weight of additional challenges in the form of protracted civil unrest and the U.S.-China trade war, yet nevertheless showed its resilience with a strong rebound in capital and equity market activity amid the improved investor sentiment. 

In particular, Sunwah International's primary investment in Sunwah Kingsway Capital Holdings limited (SWK), a leading domestic investment bank in Hong Kong, posted a better than anticipated performance owing to improved market sentiment and efforts to diversify revenues and prudently control risk.  These factors combined with government subsidies through Hong Kong's Employment Support Scheme, which provides financial support to employers in order to ensure the retention of employees amid the Covid-19 pandemic, resulted in SWK posting a small gain for the quarter. 

With respect to Sunwah International's restaurant operation investment, revenues were unavoidably down considerably given social distancing measures and the difficult operating conditions overall; however, the Company benefitted from income through Hong Kong's Employment Support Scheme. 

Sunwah International will continue to navigate the current environment with caution led by prudent investment policy and low gearing throughout the entirety of its 2021 fiscal year.  As well, Management will persist with concerted efforts to diversify its income base with solid long-term prospects.  This includes recognizing that while the Company's interest in the restaurant and hospitality sector has produced decent results to date, Sunwah International must remain prepared, if necessary, to alter course by lessening or withdrawing its focus on this industry given the high degree of uncertainty in Hong Kong's consumer marketplace at present.  In Sunwah International's newfound status as an investment company, it is in the normal course of business to invest and divest in various businesses, and the Company is well prepared to efficiently execute on any change in direction should Management determine this to be the best course of action.

Financial Overview:

In accordance with the Company's refocused investments, Sunwah International now presents its results according to the following main segments:

For more information on Sunwah International's Q1 FY2021 operating results, please see the Management's Discussion and Analysis (MD&A) and the unaudited interim consolidated financial statements, which are filed on SEDAR and also available on the Company's website at www.sunwahinternational.com.

About Sunwah International Limited

Sunwah International Limited is an investment firm and a member of Sunwah Group, one of Hong Kong's most prominent multi-national conglomerates. The Company's current primary investment interest, Hong Kong based Sunwah Kingsway Capital Holdings Limited, is listed on the Stock Exchange of Hong Kong under the stock code 00188. Sunwah Kingsway is licensed to provide a range of financial solutions in Hong Kong and abroad that include award-winning brokerage services and innovative corporate finance offerings.

Leveraging the expansive relationship network and strategic strengths of Sunwah Group, the company is now also focused on the food and beverage industry following the recent acquisition of HFL Limited, which operates a premium Chinese seafood restaurant in Hong Kong.

Forward-Looking Statements

This press release announcing the financial results for Sunwah International's first quarter ended September 30, 2020 should be read in conjunction with the unaudited interim consolidated financial statements and management's discussion and analysis of Sunwah International Limited (the "Company") and its subsidiaries.

This press release contains certain statements that reflect management's expectations and objectives for the Company's future performance, opportunities and growth, which statements constitute "forward–looking information" and "forward-looking statements" (collectively "forward-looking information") under applicable securities laws. Such statements, other than statements of historical fact, are predictive in nature or depend on future events or conditions. Forward-looking information involves estimates, assumptions, judgments and uncertainties.  These statements may be identified by the use of forward–looking terminology such as "may", "will", "should", "anticipate", "expect", "believe", "predict", "estimate", "continue", "intend", "plan" and variations of these words or other similar expressions. Specifically, this press release includes forward-looking information in respect of Sunwah International's 2021 objectives, including its focus on a variety of industries as an investment holding company and its initiative to expand and diversify, and its strategies to achieve those objectives. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

Except as required by applicable law, management and the board of directors of the Company (the "Board of Directors") undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Sunwah International Limited