Beijing-based private equity investment firm Origo Partners continued to head south after the value of its portfolio dipped in the second quarter of 2012.
The firm, which has seen its share price slashed by two-fifths over the last year, said it made good progress with the execution of its strategy in the second quarter, but the effects of falling global equity markets since the end of 2011 led to the value of the portfolio at the quarter end (excluding revaluations of unquoted portfolios) sliding to $260.5m from $267.0m at the beginning of the quarter.
The top ten investments represented 88% of the fair value of the portfolio, with the top five investments accounting for 71%.
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The firm estimates its unaudited net asset value at the period end to be $227.7m, equal to $0.64 cents per share, a decrease which was primarily due to the movement of fair market value of quoted investments, currency movements and non-cash based charges relating to the provision for long aged receivables with investee company, and interest accrued to the zero-dividend preferred shares.
The share price fell 3.03% to 16p by 08:39, some considerable distance below the net asset value per share. The firm's valuation of its assets may very well be accurate but as all of the assets are privately held it is not possible to get a truly accurate market price for them.
During the reporting period the company invested a total of $3.1m, comprising $0.9m of deployments to existing investee companies and $2.1m of investments in existing and new quoted portfolio companies through the China Commodities Absolute Return fund, which it manages.
"Origo remains confident in China's growth prospects and we have both a strong portfolio and a promising pipeline of investment opportunities in China and its neighbouring territories," the firm said.
"Whilst we cannot ignore prevailing market conditions and the related impact on asset prices, we continue to build value across the portfolio through our broad operational involvement and remain confident that we will be able to realise such value going forward."
At the end of the period Origo had cash and cash equivalents of $35.6m, with liabilities equal to $2.5m.
Reflecting the group's strategy of investing in privately held companies, 94% of the portfolio (in terms of fair value) at the end of the period was invested in unquoted portfolio companies.
The weighted average holding period for the portfolio was 2.4 years, with 78% of the portfolio having been held for less than three years and 22% having been held for three years or longer.
56% of the portfolio comprised metals and mining, 26% agriculture, 14% clean-tech and 4.0% consumer, technology and media.
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