PEREGRINE Investments Holdings recorded a bumper 101 per cent rise in net profit to $607.8 million for the 12 months to December 31. The company announced a one-for-five bonus issue of new shares and a consolidation of six shares for one new share. This will mean investors with 5,000 shares at present will be able to consolidate their holding into 1,000 shares. The strong result reflected the buoyant stock market conditions in Hongkong last year which ensured strong deal flow and major infusions of overseas institutional money into local stocks. The rise in profit after tax and before extraordinary items is the result of the merchant bank's powerful connections in the Hongkong business community, which have provided it with a constant flow of business. These influential parties include Cheung Kong and Hutchison Whampoa, CITIC Pacific, CITIC Hongkong, and Hopewell. The group has also been instrumental in satisfying mainland appetites for listing on the Hongkong stock exchange by leading the public offers for Hai Hong, China Overseas and Land Investment, China Travel International and, most recently, Denway. Earnings per share at Peregrine rose a poor five per cent on a fully diluted basis to 20.5 cents. A final dividend of six cents was announced, taking the total for the year to 10.5 cents compared with 8.3 cents for the same period in 1991. Chairman Philip Tose said: ''Hongkong had a buoyant year in corporate finance and as you might have expected Peregrine was active in this and as a result of that the profit for the group was good.'' Kwong Sang Hong, the 37 per cent owned associate company, recorded net profit up 93.7 per cent to $193.9 million, with earnings per share at 38.1 cents, up 15.5 per cent on a fully diluted basis. The total dividend at the company for the year was 21 cents, compared with 16.5 cents in the previous financial period. Mr Tose said the company had focused on trading properties in Hongkong. Property development was an increasing part of the operation's activities with 5.5 million sq ft now in its portfolio. In asset terms, however, the company was primarily a Hongkong operation. The heavy dilution in Peregrine's earnings per share was due to the conversion of warrants at the end of the period. Over the period from January 1 to last Friday, however, the share price of Peregrine rose 83 per cent, after adjusting for a bonus issue of shares in May. Mr Tose said the company would continue to increase the recurrent income content of profits. The share of results of associated companies came to $144.47 million over 1992 and he confidently predicted this would rise to $200 million in 1993. This would be on strategic stakes in Invesco MIM, a Fairwood Holdings food operation, Dragonair, a 20 per cent holding in VTech and, of course, Kwong Sang Hong. By activity Mr Tose said the group contribution to profits were split equally between the corporate finance and securities businesses, and direct investment, much of which was actually related to corporate finance activities. Group managing director Francis Leung Pak-to said the prospects for deal flows in 1993 remained good. ''I do not think the political situation will affect fund raising exercises at all in Hongkong,'' Mr Leung said. ''Our mandates at this moment are more than at any time in the past. You have to look at China and there I would like to think the potential for activity is enormous.'' Mr Leung and Mr Tose scotched rumours that there was any bad feeling between them and said there were no plans for them to part company. Mr Tose said: ''I do not know where these rumours came from, although we probably have a good idea where they came from.'' Both founder members of the firm stayed in close daily contact despite their constant travel arrangements taking them away from Hongkong, he said. ''I think we have a unique relationship and there is absolutely no truth in these rumours.'' Mr Leung said: ''The speculation is quite extraordinary and they [the rumours] are not true.'' In 1992 the merchant bank participated in 12 rights issues, 16 placements, 10 mergers and more than 40 fund-raising transactions with $19 billion involved. The direct investment side of the business was valued at $1 billion at cost on December 31, 1992.
