TORONTO, Sept. 21, 2018 /CNW/ - Sunwah International Limited, TSX: SWH (the "Company"), an Asian based investment firm, today reported its financial results for the year ended June 30, 2018.  The results reflect the deconsolidation of its principal indirect subsidiary, Sunwah Kingsway Capital Holdings Limited ("SWK").  All figures quoted are in U.S. dollars.

Sunwah International's shareholding in SWK was recently reduced from 43.31% to 34.65% following its choice to decline participation in SWK's recent open offer, a decision that was made after careful consideration.  With this dilution, the Company ceased to be SWK's controlling shareholder and SWK became an associate accounted for on an equity method basis in compliance with Accounting Standards.  As a result, Sunwah International is now an investment holding company focused on select opportunities located primarily in Asia and continues to participate in the business of financial services and SWK's success through its remaining significant equity investment in the company.

With the deconsolidation of SWK and the recording of a deemed loss of $15.35 million on its disposal, the Group recorded a net loss for the year attributable to owners of the Company of $15.4 million against a net loss of $2.6 million in FY2017.  Total revenues for Fiscal 2018 (which almost entirely comprised income from the first three quarters before using the equity method for SWK's share of results in Q4) were $16.7 million, which compares with $15.8 million in FY2017. 

"While SWK is no longer a subsidiary of Sunwah International, we continue to be very involved through our substantial equity interest in and influence over this company.  As such, we are pleased with SWK's performance in Fiscal 2018, which included a solid increase in revenue and participation in a substantial portion of the IPOs led by middle tier investment banks in Hong Kong this year," said Michael Choi, CEO of Sunwah International.  "At this point in time, we feel this is the best way to participate in SWK's success and are actively assessing a variety of options related to the Company's structure and operations with the aim of bringing value to Sunwah International's shareholders."

Previously, the operating and financial results of Sunwah International and its subsidiaries (collectively "the Group") were organized according to SWK's operating segments and SWK was accounted for as a subsidiary.  This was the case upon release of the Group's results for the first six months of FY2018 when the Company reported a small profit.  However, with the deconsolidation of SWK in Q3, the Group has presented SWK's operating results, which consist of those from Q1 to Q3 (up to the deconsolidation), separately as "discontinued operation of SWK". From the deconsolidation onwards, the results from the remaining equity interest in SWK are presented as "Financial Services" under segmented reporting using equity method. The Group's other operating segments now include "Technology products and services", which include the sale of software products and the provision of related maintenance services conducted by non-wholly owned subsidiaries, and "Strategic investments and other activities" conducted by the Group.

Profit/Loss from Discontinued Operations:

The Company recorded a deemed loss on the disposal of SWK of $15.35 million, resulting in a loss of $12.6 million after tax from discontinued operations compared to a profit after tax of $0.2 million in Fiscal 2017. 

Additional highlights include:

• Excluding the abovementioned loss on the deemed disposal of SWK, a profit of $2.7 million after tax (FY2017: $0.2 million)
  
  
• A loss attributable to shareholders of $14.2 million in FY2018 (FY2017: profit of $90,000)
  
  
• Loss before tax from discontinued operations of $12.3 million (FY2017: profit before tax of $0.4 million)

Profit/Loss from Continued Operations:

The Group recorded a loss from continuing operations attributable to the owners of the Company of $1.2 million, compared to $2.7 million in FY2017.  Loss before tax from continuing operations was also $1.2 million against $2.7 million last year.

Toronto Stock Exchange Remedial Review

Subsequent to the year end and as announced in a press release dated July 25, 2018, the Toronto Stock Exchange ("TSX") informed the Company that its common shares listing was under review regarding its ability to meet continued listing requirements.  Management is now reviewing the Group's structure and its operations in order to bring value to shareholders and to meet the continuing obligations of the TSX; however, there is no assurance that the Company will be able to meet these requirements and as a result could potentially be delisted, move to another exchange, or cease to be listed at all.

For more information on Sunwah International's annual operating results, please see the Management's Discussion and Analysis (MD&A) and complete financial statements, which are filed on SEDAR and also available on the Company's website at www.sunwahinternational.com.

About Sunwah International Limited

Founded in 1990, and until recently, Sunwah International Limited (TSX: SWH) represented the financial services division of Sunwah Group, one of Asia's most prominent multi-national conglomerates.  The Company is now an investment holding company. The Company's primary investment interest, Hong Kong based Sunwah Kingsway Capital Holdings Limited, is listed on the Stock Exchange of Hong Kong under the stock code 00188. Sunwah Kingsway is licensed to provide a range of financial solutions in Hong Kong and abroad that include award-winning brokerage services and innovative corporate finance offerings.

Forward-Looking Statements

This press release announcing the financial results for Sunwah International's year ended June 30, 2018 should be read in conjunction with the audited consolidated financial statements and management's discussion and analysis of Sunwah International Limited (the "Company") and its subsidiaries. This press release contains "forward-looking statements" as defined under applicable Canadian securities laws. These statements include, but are not limited to, statements made concerning the Company's 2018 objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan" or "continue", or similar expressions suggesting future outcomes or events. Such forward- looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

Except as required by applicable law, management and the board of directors of the Company (the "Board of Directors") undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Sunwah International Limited

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