Legend Holding Revenue Stood at RMB389.218 billion;up by 8% year-on-year

HONG KONG, Mar 26, 2020 - (JCN Newswire) - Legend Holding Corporation (3396.HK) today announced its audited annual results for the 12 months ended December 31, 2019 (the "Reporting Period "). In 2019, the revenue of the Company increased by 8% year-on-year to RMB 389.218 billion. The net profit attributable to equity holders of the Company amounted to RMB3.607 billion, representing a yoy decrease of 17%, mainly due to the decrease in some of the businesses of the financial services segment and the innovative consumption and services segment. The basic earnings per share was RMB1.54, and recommended dividend of RMB0.33 per ordinary share (before tax), representing a yoy increase of 10%.

Mr. Li Peng, executive director and CEO of Legend Holdings, stated that the macro environment in 2019 was complicated and unsettled, Legend Holdings upheld its business philosophy of seeking long-term development and stable operation. During the Reporting Period, the strategic investments saw the improved performance of several portfolio companies with sound fundamentals for growing into pillar assets, thanks to years of investment deployment and operational improvements. At the same time, the overall performance of financial investment was outstanding and contributed considerable amounts of cashback for Legend Holdings. In 2020, Legend Holdings will continue to consolidate and adjust its current business, and also dynamically formulate work plans for the next few years based on the external business environment and its proprietary resources.

Steady Growth for Pillar Assets, while Key Portfolio Companies Made Progress in Advancing the Strategic Development

Building pillar assets is regarded as the primary strategic task of Legend Holdings. During the Reporting Period, the Company continued to support key portfolio companies in marching toward their core strategic objectives and achieved good performance.

Lenovo has accelerated its intelligent transformation by implementing the 3S strategy, with RMB1.608 billion of net profit attributable to equity holders of the Company. PC and smart device business continued to lead the industry with a record high pre-tax income rate. In addition, the strategic investments of Lenovo also include telecommunications, edge computing and artificial intelligence, while making steady progress in exploring and developing future growth opportunities. During the Reporting Period, revenue of IT segment increased by 8% year-on-year to RMB 357.212 billion, and net profit attributable to equity holders of the Company increased by 48%.

Banque Internationale a Luxembourg S.A. ("Banque Internationale a Luxembourg"or "BIL") achieved good performance in the first fiscal year after Legend Holdings'acquisition. The assets under management increased by 10.3% year-on-year to EUR43.5 billion and profit before tax from core businesses increased by 20% year-on-year to EUR136 million. The CET-1 ratio rose to 12.47%. During the Reporting Period, BIL has cooperated with Legend Capital and Legend Star, and the advantage intra-portfolio synergy presented well. In September 2019, BIL opened its Beijing Representative Office;in October, it obtained the approval from European and Hong Kong regulators for acquiring a Hong Kong-based wealth management company. According to BIL's latest five-year strategy plan, its new businesses in China will become a strategic focus. During the Reporting Period, revenue of the financial services segment increased by 27% year-on-year to RMB8.815 billion, and net profit attributable to equity holders of the Company was RMB 2.076 billion. Lakala, one of the portfolio companies of financial services segment, was successfully listed on the ChiNext Board on April 25, 2019, becoming the first A-share public third-party payment company, which is one of the successful "two-wheel-drive"examples between Legend Holdings and Legend Capital. After the listing, its fast-growing market capitalization also boosted the fair value of the equities Legend Holdings holds in it.

Joyvio Group categorizes fruit and high-end animal protein from seafood as its two main business lines. In 2019, it made further progress in establishing a business presence along the whole industrial chain with global footprint. Joyvio Agriculture, its high-end animal protein operating platform, acquired a Chilean salmon asset, turning the first Chinese company to acquire high-quality salmon upstream assets overseas. As a result, the deal consolidates and enhances its ability to control over upstream high-quality resources in short supply. In addition, the fruit supply chain platform Joy Wing Mau filed for domestic IPO counseling in September 2019, which further consolidated its leading position in the industry. During the Reporting Period, the revenue and the net profit attributable to equity holders of the Company of the agriculture and food segment increased by 21% and 10% year-on-year, to RMB 15.695 billion and RMB 230 million, respectively.

Levima Advanced Materials has actively extended to the upstream and downstream value chain, and an initial presence along the industrial chain was successfully created. Levima is a greenfield investment cultivated all by Legend Holdings and it is currently actively promoting its A-share listing. In the future, it will further integrate the advantages given by CAS and make new breakthroughs in the downstream fine chemicals. During the Reporting Period, Levima Group saw its profit increase by 147% year-on-year to RMB523 million, reaching the highest since it was put into full production. Revenue of the advanced manufacturing and professional services segment recorded RMB 5.947 billion, and the net profit attributable to equity holders of the Company increased by 82% year-on-year to RMB476 million. The IPO project of China Eastern Air Logistics is now progressing smoothly.

The year 2019 is challenging for innovative consumption and service industries. The divergence of business sentiment has become more and more apparent. On the one hand, the Company has carried out in-depth research and continuous tracking of the macro environment and industry trends with emphasis on sub-sectors. On the other hand, the Company has been constantly strengthening the two-wheel-drive model of companies in the financial investment segment including Legend Star, Legend Capital and Hony Capital, so as to explore a variety of joint investment opportunities. During the Reporting Period, revenue of the innovation consumption and services segment recorded RMB 905 million.

Financial investments continued to contribute to the backflow of funds, successfully raised fund despite market recession

During the Reporting Period, net profit attributable to equity holders of the Company of financial investments segment increased by 68% year-on-year to RMB 906 million. The three financial investment platforms adapted to current circumstances, proactively adjusted the investment pace and exited from their projects in a timely and decisive manner, generating more than RMB 5 billion of cash back, playing a key role in overall resource allocation. Meanwhile, each fund platforms have successfully gained support from investors and raised funds despite market recession.

Legend Capital managed 21 funds in total, of which the size exceeded RMB50 billion. In 2019, Legend Capital launched three new funds raising RMB 9.391 billion, with the newly raised amount of over RMB4.2 billion. During the reporting period, a total of 29 new project investments were completed, 40 projects were fully or partially exited. 10 portfolio companies under its management were successfully listed domestic and overseas capital markets, contributing more than RMB2 billion cash back to Legend Holdings.

Legend Star, an angel investment firm, managed 7 funds in total, of which the size exceeded RMB2.5 billion with an aggregate of over 260 onshore or offshore investment projects. During the Reporting Period, Legend Star maintained a steady growth, and forged competitiveness and influence in frontier technologies and healthcare. Legend Star invested in nearly 30 onshore or offshore projects, nearly 60 projects under management undertook follow-on financing, while 20 projects were already exited. During the Reporting Period, the 4th RMB fund and 4th USD fund completed first closing.

Hony Capital, an investment management firm, managed 12 funds in total, of which the size exceeded RMB80 billion, currently covers PE, real estate, public fund management, hedge fund and innovative investment businesses. During the Reporting Period, Hony Capital completed the final closing of its cultural industry fund, and the 3rd property fund sent the notice for the first closing. Hony Horizon has issued 4 new funds in total. Hony Capital has promoted the investments and project exits in an orderly manner, contributing more than RMB1.2 billion cash back to Legend Holdings.

Consolidating core business fundamentals, a brand-new blueprint for the future
Facing a challenging external environment, safe and steady business operation was regarded as the Company's top priority, while always keeping risk awareness and resilience in mind. The Head Office strengthened its diverse financing capabilities, encouraging and helping its portfolio companies to improve their financing capabilities. At present, Legend Holdings has an overall cash reserve of RMB62.3 billion and the unused bank line of credit of Head Office stood at RMB89.2 billion, which effectively satisfies the needs of the company's business development.

The external environment in 2020 is not yet optimistic. The COVID-19 and capital market turmoil at the beginning of 2020have compounded the challenges and uncertainties of the business environment. While ensuring prevention and fight against the disease, Legend Holdings immediately provided management support to the portfolio companies, helping them to make dynamic assessments on the business operation and to adopt measures to survive the epidemic. The Company will steadily advance various previously established plans at this stage in accordance with its established strategy, the Company will take a comprehensive and prudent method in evaluating the resource investments and risks, being sensitive and aware of complex changes, adapting to circumstances, developing with innovation, together with a more systematic framework for future strategies.

Firstly, Legend Holdings will accelerate building pillar assets and is confident to build new business pillars and leading companies in niche markets in finance, agriculture and food, and new materials other than IT. At the same time, the Company will further focus on main business and accelerate the backflow of resources, so as to accumulate adequate resources for the upcoming business layout in the new strategic cycle. Legend Holdings will also continue to build up the synergy under the "two-wheel-drive"model, develop the projects of portfolio companies of financial investments sector, which meet the strategic investment standards, particularly projects in TMT, artificial intelligence, healthcare, high-end manufacturing and other specific sectors. In addition, the Company will make greater efforts in talents development. Legend Holdings will further reform the performance appraisal and incentives, while building core competitiveness for the Company's sustainable development in the future.

Mr. Ning Min, chairman and executive director of Legend Holdings, reminded us that Legend Holdings celebrated the 35th anniversary of establishment this year. As an independently established Chinese enterprise, Legend Holdings is representative in exploration of equity structure, management philosophy, corporate culture and other mechanisms and systems. In 2019, the Company also completed the inter-generational inheritance of core leadership in accordance with its established strategy. In the future, Legend Holdings will adhere to its original entrepreneurial spirit, distinctive management style and cultural foundations. At the same time, "strategies"and "talents"are considered as entry points of the Company to solve important issues related to the Company's healthy and sustainable development and creating new corporate value. Standing at the transition between old and new strategic cycles, the existing business still needs to be further optimized and improved, while unexpected challenges are coming. Despite of that, Legend Holdings will always look at the Company's development with a long-term perspective, and bolster businesses fundamentals while also paying close attention to new changes in the industry. Legend Holdings aims to broaden its horizons and enrich its reference frame when establishing next medium-term strategies. The Company also believes that a temporary epidemic will not change the long-term growth of China's consumption capacity, the development trend of the global supply chain and the huge reserve of talents of high quality. The Company is confident in the potential, momentum, and resilience of Chinese economy fundamentals.





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