Financial Performance - As of December 31, 2019, the Net Asset Value (NAV) per unit of CSOP Hang Seng China Enterprises Index Daily (-2x) Inverse Product was HKD 5.2069, with 19,200,000 units outstanding, resulting in total assets under management of approximately HKD 100.0 million[9]. - For the period from January 1, 2019, to June 24, 2019, the NAV performance was -10.03%, while the Index performed at 8.18%[10]. - From June 25, 2019, to December 31, 2019, the NAV performance was -11.55%, compared to the Index's performance of 3.96%[10]. - Total assets as of December 31, 2019, amounted to HKD 102,410,186, a decrease from HKD 133,346,201 in 2018[46]. - Net assets attributable to unitholders decreased to HKD 99,435,421 from HKD 131,929,995 in the previous year, reflecting a significant decline[52]. - The total comprehensive loss for the year ended December 31, 2019, was HKD 21,576,776, compared to a comprehensive income of HKD 39,556,498 in 2018[49]. - The total net loss/income for the year was HKD (18,183,163), a stark contrast to the previous year's income of HKD 42,901,108[49]. - The Sub-Fund reported a net loss on investments and derivative financial instruments of HKD 19,072,841 for the year ended December 31, 2019, compared to a net gain of HKD 42,257,824 in 2018[114]. Investment Strategy and Holdings - The investment objective of the Sub-Fund is to provide results that closely correspond to two times the inverse (-2x) of the daily performance of the Hang Seng China Enterprises Index[6]. - The Sub-Fund has undergone thirty-four monthly futures rolls since inception, utilizing a futures-based replication strategy to track the Index[13]. - The Sub-Fund's investments and derivative financial instruments as of December 31, 2019, included an investment fund valued at HKD 22,510,426, debt securities at HKD 49,964,322, and futures contracts in short positions at HKD (2,250,637)[29]. - The Sub-Fund's investment strategy is subject to market risks, including market price risk, interest rate risk, and liquidity risk, which may affect its performance[126]. - The Sub-Fund's exposure to interest rate risk includes investments in interest-bearing debt securities totaling HKD 49,964,322 as of December 31, 2019, up from HKD 23,980,800 in 2018[142]. - The Sub-Fund's investments in listed derivatives were valued at HKD 72,474,748 as of December 31, 2019, representing 72.89% of net asset value[130]. - The Sub-Fund's maximum exposure to loss from its interests in CSOP Hong Kong Dollar Money Market ETF is equal to the total fair value of its investments in the ETF[179]. Cash Flow and Liquidity - For the year ended 31 December 2019, the Sub-Fund had net cash used in operating activities of HKD 46,803,236, compared to HKD 53,399,444 generated in the previous year[55]. - The Sub-Fund's proceeds from the sale of investments amounted to HKD 192,573,591, a decrease from HKD 257,107,265 in the prior year[55]. - The total payments for the purchase of investments were HKD 228,724,535, up from HKD 197,052,631 in the previous year[55]. - Cash and cash equivalents at the end of the year decreased to HKD 9,198,905 from HKD 61,818,952 at the beginning of the year[55]. - The amount due from participating dealers was HKD 5,100,987, indicating liquidity management challenges[46]. - The Sub-Fund's liquidity risk management strategy includes investing in securities expected to be liquidated within 7 days or less[157]. Management and Fees - The Manager and Trustee confirm that the Sub-Fund has been managed in accordance with the Trust Deed for the year ended December 31, 2019[15]. - The management fee payable increased to HKD 130,498 from HKD 116,292 in the previous year[46]. - The Sub-Fund's management fee paid was HKD 2,121,255, a decrease from HKD 2,329,258 in the previous year[55]. - The management fee for the Sub-Fund increased from 0.99% to 1.5% per annum as of June 25, 2019[119]. Unit and Shareholder Information - The number of units in issue decreased from 170,400,000 at the beginning of 2019 to 19,200,000 at the end of the year, with 55,200,000 units redeemed during the year[111]. - The Sub-Fund had two unitholders holding more than 10% of its units, representing a total of 30.51% of the Sub-Fund's units as of December 31, 2019[156]. - The Sub-Fund's capital is represented by redeemable units outstanding, with the objective to provide investment results that correspond to the performance of the respective index[170]. Regulatory Compliance - The financial statements were approved by the Trustee and the Manager on April 27, 2020, ensuring compliance with relevant regulations[46]. - There were no soft commission arrangements in place during the years ended December 31, 2019, and December 31, 2018[196]. Market and Economic Conditions - If the Hang Seng China Enterprises Index were to increase or decrease by 10%, the operating profit for the year would change by approximately HKD 9,725,058 in 2019 and HKD 5,104,129 in 2018[132]. - The portfolio weighted average modified duration of the Sub-Fund increased to 0.11 in 2019 from 0.03 in 2018, indicating a higher sensitivity to interest rate changes[142].
新华联资本(00758) - 2019 - 年度财报