China Private Equity swings into the red in 2011

published 22 June 2012

China Private Equity's (CPE) bottom line was hit in 2011 by a fall in the value of its stake of one of its new investments.

CPE, the China-focused investment trust, reported that consolidated net assets increased from $29.3m to $33.4m during the year.

However, there was a consolidated loss for the 12 months to December 31st 2011 of $2.89m, compared with a profit of $1.89m the year before. This was mainly due to what it says will prove to be a "short-term" decrease in the fair value of its stake in Enfinium Holdings of $1.7m.

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The company explains: "Enfinium's business has been growing rapidly over the past year, resulting in its need to raise working capital to sustain its rate of growth. The timing of Enfinium's cash raise, at a small discount to our entry price due to current market conditions, precluded us from taking part as we were not comfortable with raising money to invest at the current CPEH share price. This decision resulted in the dilution of CPEH's holding in the company from 30% to 24% during the year.

Despite the loss reported, Chief Executive Officer John Croft remains optimistic: "Opportunities in China for new investments in our areas of focus are reducing in price but increasing in availability. We would like to take advantage of these trends to increase our scale and presence," said

"China remains one of the most attractive investment markets in the world and our focus on fast growing sectors within it should prove rewarding," he said.