SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a - 16 OR 15d - 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2003
CHINA ENTERPRISES LIMITED
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(Translation of Registrant's Name Into English)
8/F., Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong
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(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
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CHINA ENTERPRISES LIMITED
PRESS RELEASE
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS
ENDED JUNE 30, 2003
HONG KONG, September 25, 2003 China Enterprises Limited ("the Company") (OTCBB:
CSHEF) announced today its unaudited condensed consolidated results for the six
months ended June 30, 2003.
Financial Highlights
Six months ended Six months ended
June 30, 2002 June 30, 2003
---------------- ----------------
Revenues Rmb1,173.6M up by 45.2% Rmb1,704.3M US$205.8M
Net loss Rmb (23.1M) up by 4.8% Rmb (24.2M) US$ (2.9M)
Net loss per share Rmb (2.55) up by 5.1% Rmb (2.68) US$ (0.33)
Revenues for the six months ended June 30, 2002 have been restated from amounts
previously reported to reflect the effect of discontinued operations as of June
30, 2002. Please refer to Note 1 to the attached Financial Highlights for
details.
In the first half of 2003, China Enterprises generated revenues of Rmb1.7
billion compared to the restated revenues of Rmb1.2 billion for the
corresponding period in the previous year. It increased its net loss by 4.8% to
Rmb24.2 million. The loss incurred during the period was mainly attributable to
the share of losses in its travel business related affiliate company. The travel
business in the Greater China Region was dampened by the outbreak of the SARS in
first half of 2003. However, the business rebounded in the second half of the
year as the unfavorable effects of the epidemic subsided.
In January 2003, the Company disposed of its entire interest in Yinchuan C.S.I.
(Greatwall) Rubber Co., Limited ("Yinchuan CSI") for a consideration of Rmb35.0
million and recognized a gain on disposal of Rmb5.0 million. Subsequently, the
Company disposed of its remaining interest in Double Happiness Tyre Industries
Corporation Limited ("Double Happiness"), including an incomplete radial tire
factory, to an independent third party for a consideration of Rmb10.0 million in
June 2003, and resulting in a gain on disposal of Rmb11.0 million. The
completion of the sale is pending upon certain approvals from the government
authorities; however, the Company effectively transferred control and
substantially all its risks and benefits of ownership of the factory to the
buyer after receiving the total sale proceeds. On June 15, 2003, the Company
entered into a contract with an independent third party, Hangzhou Industrial &
Commercial Trust & Investment Co., Limited, for disposal of a 25% interest in
Hangzhou Zhongce Rubber Co., Limited ("Hangzhou Zhongce"), currently a 51% owned
subsidiary of the Company, for a consideration of Rmb164.7 million in order to
widen the shareholders' base of Hangzhou Zhongce. The Company considers the sale
to be beneficial both to the further development of Hangzhou Zhongce in the
People's Republic of China (the "PRC") and its future value to the Company.
The sale is conditional upon the parties receiving approval of the transaction
from the China Commercial Department, an agency of the government of the PRC.
For details of the unaudited consolidated results of the Company and its
subsidiaries for the six months ended June 30, 2003, please refer to the
following Financial Highlights,
China Enterprises Limited - Financial Highlights
Condensed Consolidated Statements of Operations :
For the half year ended June 30,
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2002 2003
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Notes Rmb'000 Rmb'000 US$'000(2)
----- (unaudited) (unaudited) (unaudited)
(As restated,
See Note 1)
Revenues 1,173,584 1,704,333 205,837
Cost of revenues (994,321) (1,500,673) (181,241)
---------- ---------- ----------
Gross profit 179,263 203,660 24,596
Selling, general and administrative expenses (76,473) (122,940) (14,848)
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Operating income 102,790 80,720 9,748
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Interest expenses, net (12,219) (4,731) (571)
Other income, net 91 984 119
Change in fair value of call option 37,125 -- --
Equity in losses of affiliates (2,397) (74,434) (8,989)
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Profit from continuing operations before
income taxes and minority interests 125,390 2,539 307
Provision for income taxes (10,120) (7,993) (965)
Minority interests (40,473) (33,928) (4,098)
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Profit (loss) from continuing operations 74,797 (39,382) (4,756)
(Loss) profit from discontinued operations (1) (97,855) 15,206 1,836
---------- ---------- ----------
Net loss (23,058) (24,176) (2,920)
========== ========== ==========
Basic and diluted earnings (loss) (3)
per common share (in Rmb/US$ as stated)
- Continuing operations 8.29 (4.37) (0.53)
- Discontinued operations (10.84) 1.69 0.20
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Basic and diluted loss per common share (2.55) (2.68) (0.33)
========== ========== ==========
Consolidated Balance Sheets Data :
As at December 31, As at June 30,
2002 2003
------------------ -----------------------------
Rmb'000 Rmb'000 US$'000(2)
(audited) (unaudited) (unaudited)
Total assets 2,880,680 2,533,082 305,928
Shareholders' equity 535,206 540,077 65,227
Supervoting common stock -
- par value US$0.01 per share 244 244 29
Common stock - par value US$0.01 per share 526 526 64
Notes to Financial Highlights
1. The Company disposed of Yinchuan CSI in early January 2003. Yinchuan CSI
had previously been reported under the results from continuing operations
for the half year ended June 30, 2002.
Accordingly, the operating results of Yinchuan CSI had been segregated from
continuing operations and reported as a separate line item on the
consolidated statements of operations together with Double Happiness,
Yantai C.S.I. Rubber Co., Limited and Shandong C.S.I. Synthetic Fiber Co.,
Limited. The Company had also restated its consolidated statements of
operations for the half year ended June 30, 2002 to present the operating
results of Yinchuan CSI as discontinued operations.
Operating results of the discontinued operations are summarized below:
HALF YEAR ENDED JUNE 30,
--------------------------
2002 2003
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RMB'000 RMB'000
(AS RESTATED)
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Revenues 289,630 --
======== ========
(Loss) profit from operations of discontinued components before income
taxes and minority interests (including a gain on disposition of Rmb7.8
million in 2002 and Rmb15.9 million in 2003) (199,608) 15,204
Provision for income taxes -- --
Minority interests 101,753 2
-------- --------
(Loss) profit from discontinued operations (97,855) 15,206
======== ========
2. The translation of Renminbi (Rmb) amounts into United States Dollar (US$)
amounts are included solely for the convenience of readers in the United
States of America and have been made at the unified exchange rate quoted
by the People's Bank of China on June 30, 2003 at US$1.00 = Rmb8.28. No
representation is made that the Renminbi amounts could have been, or could
be, converted into United States Dollars at that or at any other rate.
3. The calculation of the basic and diluted loss per common share for the
half years ended June 30, 2002 and 2003 is based on the weighted average
number of common shares outstanding during the half years ended June 30,
2002 and 2003 of 9,017,310. There had not been any dilutive securities
during the half year ended June 30, 2003 and the outstanding options were
anti-dilutive during the half year ended June 30, 2002.
*** End ***
For more information, please contact:
Hong Kong New York
China Enterprises Limited Citigate Financial Intelligence
Dr. Chan Kwok Keung, Charles Tel: (1) 212 688 6840
Tel: (852) 2372 0130 Fax: (1) 212 838 3393
Fax: (852) 2537 6591
3.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorised.
CHINA ENTERPRISES LIMITED
By /s/ Dr. Allan Yap
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Dr. Allan Yap
Vice Chairman
Dated: 26th September, 2003