China Innovation Investment Limited, the first investment expert focuses on the dual-use of ‘Three—New Industry’ in local capital market, was incorporated in the Cayman Islands as an exempted company with limited liability on 7th February 2002, and listed on The Main Board of The Stock Exchange of Hong Kong Limited (the Stock Exchange) on 28 August 2002.
The Company is an investment holding company under Chapter 21 of the Rules Governing the Listing of Securities on the Main Board of the Stock Exchange (the Listing Rules). Its principal investment objective is to achieve medium-term capital appreciation by investing in listed and unlisted companies mainly in Hong Kong and the PRC
INVESTMENT OBJECTIVES
As the first investment expert focuses on the dual-use of ‘Three—New Industry’ including “New Energy”, “New Light” and “New Materials” in the local capital market, China Innovation put a lot of effort on the sector of environmental protection, and assists to build up a harmony society with the Government’s low carbon policy.
China Innovation’s investment objective is to strategically invest in a one-stop industry chain for “New Energy”, “New Light” and “New Materials” by the integration of solar storage battery, LED/LCD backlight and lighting and energy conserving materials.
In the field of “New Energy”, China Innovation completed the strategic investment in Topsun Creation Limited (‘Topsun’). Topsun is an enterprise engaged in the field of new energy application and its business includes the research and development, production and sales of new energy of high capacities batteries for civil and military dual-used products. With the characteristics of high capacity, fully sealed and maintenance-free, these batteries are commonly used in tanks, submarines and barracks as well as civil vehicles and construction.
In “new light” industry, the Company completed the strategic investment in Dooda Innovation Limited (‘Dooda’), and entered into a non-legal binding framework agreement with a vendor on the possible acquisition of a great portion of the issued share capital of C.G.E. (HK) Co., Limited (“CGE”). It also granted a first right of refusal to invest in China Opto-Electro Industries Co., Ltd (“COEI”), a wholly-owned subsidiary of CNGC (中國兵器工業集團，「中國兵器」) under the capital restructuring of COEI. Dooda’s main business consists of the R&D, production and sales of the dual-use of LED backlight and lighting technology in both military and civil market sector; while CGE engages in R&D, production and sales of various series of the civil and military dual-application of LED and LCD backlight power supply, built-in power supply related optoelectronic products, electronic devices and provision of related technical services. Based on the dual-usage, the new light LED display and electrical products can be widely used in military and commerce, which provide reliable and competitive energy-saving products to meet the market standard and demand.
In “new material” industry, through the investment in Takenaka Investment Company Limited, the Company already invested in Zhenjiang Fujieda Copper Foil Company Limited which served as an important upstream supplier to produce civil and military dual-used copper foil materials with advanced technology for electronic products applying the concept of “new energy” and “new light”. The Company also entered into the acquisition agreement with United Crown Century Company Limited (“United Crown Century “, formerly named “Moral Glory Limited”), preparing for its investment in energy-saving “new materials” industry.
With its strategic investment through the “new energy”, “new light” and “new materials” industry, the Company, will further apply the integration and usage of three new resources industries – The Company’s investment in Blue Angel (H.K.) Limited will be principally engaged in the production and assembly of solar electric cars, solar energy electronic books and solar energy advertising screens and other electronic innovations with the use of solar energy and LED technologies.
The Company’s investment strategy is to participate in “new energy”, “new light” and “new materials” industries to maximize the future growth and development of these new resources industries
INVESTMENT POLICIES
The Company has adopted the following investment policies
(a) the Company’s primary investment objective is to achieve medium-term capital appreciation by investing in listed and unlisted companies mainly in Hong Kong and the PRC (this means that at least 70% of the Company’s investments (if and when they are made) will be made in Hong Kong and the PRC). To a lesser extent, the Company may also invest in other countries should the Directors or the Investment Manager consider that such investments would provide attractive returns to the Company.
(b) investments will normally be made in the form of equity-related securities and debt instruments in listed and unlisted companies engaged in industries including (but not limited to) information technology, telecommunications, manufacturing, service, property, infrastructure, life science and environmental sectors to maintain a balance in the Company’s exposure to different industry sectors in order to minimize the impact on the Company in the event of any downturn in any particular sector;
(c) investments will normally be made in companies that have long been established in the respective fields which they operate in and in companies which the Board believes there to be prospects of long-term growth. In particular, the Company will seek to identify businesses or entities with profit growth potentials, strong management, high level of technical expertise and research and development capabilities as well as management who are committed to long-term growth. The Company may also invest in companies or other entities which are considered by the Board or the Investment Manager as being special or which are in recovery situations. The Board believes that the current market conditions offer various special and attractive investment opportunities;
(d) where possible, the Board or the Investment Manager would seek to identify investments where there will be synergy between the investments and the other investee companies in which the Company has invested and where co-operation between such companies would be of mutual benefit to each other;
(e) the Company’s investments are primarily intended to be held for medium to long term capital growth as well as for income streams of interests and dividends. Nevertheless, the Directors or the Investment Manager will from time to time realize investments where they believe that realisation would be in the best interests of the Company or where the terms of such realization are particularly favorable to the Company;
(f) the Company may seek borrowings to finance an investment provided that such borrowings when aggregated with the existing borrowings of the Company do not exceed 50% of the latest available Net Asset Value at the time the borrowing is made and the Company may charge or pledge its assets as security for borrowings;
(g) the Company may hedge against interest rate risks by entering into forward interest rate agreements, interest rates and bond futures contracts, interest rate swaps, and may purchase and write or sell, put or call options on interest rates and put or call options on futures on interest rates. The Company will only engage in transactions in options and futures which are traded on recognized securities or futures exchanges and for the purpose of hedging only. The Company has no intention to purchase, write or sell derivatives;
(h) the Company may not buy or sell commodities, commodity contracts or precious metals, except that it may purchase and sell futures contracts on stock indices and securities which are secured by commodities or precious metals;
(i) before suitable investment projects are identified, the Company may seek to protect the capital value of the Company’s cash assets by placing the same in bank deposits in any currency, bonds or treasury securities issued by the government of the United States or the government of Hong Kong, or their respective agencies or securities or other instruments denominated in any currency issued by various governments or international government agencies.
Investors should note that while it is the intention of the Company to invest its funds in accordance with the investment objectives and policies outlines above as far as practicable subject to market and other investment considerations, it may take some time before the funds of the Company are fully invested.
The Company’s investment objectives and policies will remain in force for a minimum period of three years from the date of this prospectus unless otherwise decided by the Shareholders by a special resolution in a general meeting. The Board has no present intention to change the Company’s investment objectives and policies.
