Everbright Securities Co. Ltd. expects to report a 92.2% year-over-year decrease in net profit for the year ended Dec. 31, 2018, due to higher provisions.
The company said it expects consolidated net profit of 243.9 million yuan for 2018, down 92.2% from 3.13 billion yuan in 2017. The net profit attributable to shareholders of the company is estimated to be 103.3 million yuan, representing a decrease of 96.6% from 3.02 billion yuan in 2017.
Everbright Securities made the provisions relating to the investment project of Shanghai JinXin Investment Consultancy Partnership Enterprise, or JinXin Fund, which was set up by Everbright Capital Investment Co. Ltd. unit Everbright JinHui Investment Management (Shanghai) Co. Ltd. and others in 2016. Everbright Capital invested 60 million yuan in the fund. On Feb. 25, the investment period of JinXin Fund expired but Everbright Capital failed to exit as originally planned.
Considering various factors, Everbright Securities said it made a provision of 1.4 billion yuan for estimated liabilities and a provision of 120.8 million yuan for assets impairment, which reduced its consolidated profit by about 1.52 billion yuan and its consolidated net profit by about 1.14 billion yuan.
Everbright Capital is a unit of Everbright Securities.
As of March 19, US$1 was equivalent to 6.71 Chinese yuan.