Adamas Finance Asia Limited Unaudited NAV and Portfolio Update for Q3 30 Sept (7809F)

TIDMADAM

RNS Number : 7809F

Adamas Finance Asia Limited

19 November 2020

ADAMAS FINANCE ASIA LIMITED

(" ADAM " or the " Company ")

Unaudited Net Asset Value and Portfolio Update

for the Quarter ended 30 September 2020

Adamas Finance Asia Limited (AIM: ADAM), the London quoted company focused on providing shareholders with attractive uncorrelated, risk-adjusted returns from a diversified portfolio of pan-Asian investments, is pleased to provide the following update for the quarter ended 30 September 2020.

NET ASSET VALUE

The Company delivered consolidated unaudited estimated Net Asset Value ("NAV") per share on 30 September 2020 of GBP 0.73/USD 0.95 (30 June 2020: GBP 0.75/USD 0.95). The consolidated unaudited estimated NAV on 30 September 2020 was USD 99.4 million (30 June 2020: USD 100.2 million). The NAV decrease was impacted by a slight increase in liabilities during the quarter. The Company has used a USD:GBP exchange rate of USD 1.00:GBP 0.77 as of 30 September 2020 to determine GBP values.

Post the reporting period, at the beginning of 4Q 2020, the Company completed an Open Offer and Placing following the issue of 8,356,663 Open Offer and Placing Shares for the total amount of GBP 1,991,916. The Company awaits receipt of the remaining placement monies from one of its Placees for the amount of GBP1,142,794 which have been delayed due to issues raised by the Placee's remitting financial institution. The Company has been in regular contact with the Placee and has received information that a second (of equivalent in value) transfer will be initiated to cover the receipt of outstanding funds. ADAM remains confident in the receipt of the outstanding monies.

John Croft, Chairman of Adamas Finance Asia Limited, commented:

"The Company's portfolio has remained resilient in the face of the headwinds created by COVID-19, with the underlying valuations being mostly unaffected. The Company is confident in the current valuations moving forward mainly because ADAM's investments are consistently structured with downside protection, as well as their diversified nature, and their location in a region which has learned well from previous outbreaks and is now reopening and recovering.

The Company's fundraising capabilities were demonstrated during the period with ADAM successfully raising a further US$1.7 million through ADAM's corporate bond. The Company also undertook its first equity raise by way of Open Offer and Placing to raise GBP3.13 million (US$3.8 million) through the issue of new ordinary shares.

The Company's investment manager, Harmony Capital Investors Limited, is continuing to see an increasing number of attractive investment opportunities providing similar yields to previous investments the Company has made. The Company believes that COVID-19 further exacerbates the inability for high growth SMEs to access capital, ultimately reinforcing the Company's ability to invest in strong, well-managed but capital-starved companies.

The Board remains cautious during the COVID-19 pandemic, but it is confident in the outlook for the Company and of delivering value for its shareholders in the longer term."

UPDATE ON KEY PORTFOLIO INVESTMENTS

Future Metal Holdings Limited ("FMHL" or the "Quarry") - 44% of NAV

After recommencement in late 2019, the operations of the Quarry were temporarily halted between January 2020 and early March 2020 due to the Chinese New Year and then the COVID-19 epidemic in China. In line with uptake in industrial activity in China, the management team resumed work in mid-March 2020 and started the construction of environmental facilities on site to complete its compliance with local requirements. All on-site construction activities were completed by the end of June 2020 when production resumed.

The management team renewed the Quarry's Mining Licence on the 2nd of August 2020. The new licence is valid until the 13th of March 2023. The team also secured a Work Safety Permit on the 18th of August 2020 which is valid until the 16th of August 2023. The General Manager is working with the Ministry of Ecology and Environment on the formal approval of the onsite environmental facilities and the issuance of a Pollution Discharge Permit. The permit is expected to be issued in 4Q 2020, at which point the Quarry will be fully licenced.

Sales activities have started to pick up from July 2020. The management team is actively pursuing sales orders from buyers in the local region.

Fook Lam Moon Holdings ("FLMH") - 28% of NAV

Fook Lam Moon's restaurant operations have gradually returned to normal during 3Q 2020, as the Hong Kong Government has relaxed certain social distancing measures that were previously in place to curb the spread of COVID-19. Nevertheless, Fook Lam Moon's management continues to take active steps to safeguard the health of guests and staff, including regular disinfection of all dining rooms and dining utensils as well as the installation of additional private dining areas for guests' usage.

Meize Energy ("Meize Energy") - 8% of NAV

Meize Energy opened a new production facility in Jiangsu Province which aimed to diversify its operations from supplying onshore wind turbine blades into supplying blades for offshore wind turbines. Meize Energy has another two production facilities in China, namely in Ningxia and Inner Mongolia. The new production facility is estimated to produce 400 sets of wind turbine blades per annum at full capacity.

Infinity TNP - 7% of NAV

Outbound tourism to Niseko from Greater China and other parts of the world has been affected due to international travel bans brought on by COVID-19. Several of Niseko's major ski resorts such as Grand Hirafu and Rusutsu have recently released statements announcing that several operational changes will be implemented for the upcoming Winter Season, including reduced ski lift operations and closure of select restaurants. The local management team at Tellus Niseko has been monitoring the situation in Japan closely and it is expected to implement similar operational changes at the property and as required. Essential controls and processes will remain in place on-site to ensure guests' safety and hygiene. Once travellers are able to return to the region, occupancy levels are expected to return to normal as Japan gradually lifts travel restrictions and management expects the revival of local tourism.

DocDoc Pte Ltd ("DocDoc") - 2% of NAV

DocDoc has been making significant progress to secure contracts from a number of insurance providers and global banks within the South East Asia and North Asia region. As a consequence of the uncertainties created by the COVID-19 pandemic, these parties see the need to enhance their core offerings to policyholders and employees and are more incentivised to be innovative and tech-enabled in order to obtain a competitive edge. A number of these potential clients have undergone pilot programmes to trial DocDoc's offering and are in the final stages of discussing binding contracts with the business.

Infinity Capital Group Limited ("ICG") - 2% of NAV

As the COVID-19 pandemic continues to impact Japan and the Hokkaido region during 3Q, there has been no construction activities in Niseko. ICG is working closely with local management to monitor the domestic property market and the local market's response to the pandemic. In December 2019, construction was completed of ICG's Tellus Niseko residential apartments, which were leased to guests in January 2020 in line with management expectations. ICG is finalising the strata title registration in the local government for the Tellus Niseko project.

For further information, please visit the Company's website at http://adamasfinance.com and follow the Company on Twitter (@ AdamasFinance ).

FOR FURTHER INFORMATION, PLEASE CONTACT:

 
 Adamas Finance Asia Limited                [phone] 
 John Croft 
                                           --------------------- 
 
 WH Ireland Limited - Nominated Adviser     [phone] 
                                           --------------------- 
 James Joyce 
                                           --------------------- 
 James Sinclair-Ford 
                                           --------------------- 
 
 Pello Capital Limited - Joint Corporate 
  Broker                                    [phone] 
                                           --------------------- 
 Mark Treharne 
                                           --------------------- 
 
 Maitland/AMO - Communications Advisor      [phone] 
                                           --------------------- 
 James Benjamin 
                                           --------------------- 
 Peter Hamid 
                                           --------------------- 
 

About Adamas Finance Asia

Adamas Finance Asia Limited (ADAM) is quoted on the AIM Market of the London Stock Exchange and is committed to providing shareholders with attractive uncorrelated, risk adjusted long-term returns from a combination of realising sustainable capital growth and delivering dividend income.

The Company is focused on providing growth capital and financing to emerging and established Small and Medium Enterprises (SME) sector throughout Asia, well diversified by national geographies, instruments and asset classes. This vital segment of the economy is underserved by the traditional banking industry for regulatory and structural reasons.

The Company's investment manager, Harmony Capital, seeks to capitalise on its team's established investment expertise and broad networks across Asia. Through rigorous diligence and disciplined risk management, Harmony Capital is dedicated to delivering attractive income and capital growth for shareholders with significant downside protection through selectively investing in assets and proactively managing them.

Harmony Capital is predominately sourcing private opportunities and continues to create a strong pipeline of attractive income generating assets from potential investments in growth sectors across Asia, including healthcare, fintech, hospitality, IT, and property.

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November 19, 2020 02:00 ET (07:00 GMT)