| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Cayman Islands | | N/A |
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification No.) |
Large Accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company x |
| | (Do not check if a smaller reporting company) |
PART I. | FINANCIAL INFORMATION | 1 |
| | |
ITEM 1. | FINANCIAL STATEMENTS | 1 |
| | |
| Consolidated Balance Sheets at June 30, 2013 (Unaudited) and December 31, 2012 | 1 |
| Consolidated Statements of Income for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited) | 2 |
| Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited) | 3 |
| Consolidated Statement of Shareholders’ Equity for the Six Months Ended June 30, 2013 (Unaudited) | 4 |
| Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012 (Unaudited) | 5 |
| Notes to Unaudited Consolidated Financial Statements | 7 |
| | |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 55 |
| | |
| Special Note Regarding Forward-Looking Statements | 55 |
| Overview | 55 |
| Results of Operations | 60 |
| Liquidity and Capital Resources | 67 |
| Recent Accounting Pronouncements | 69 |
| | |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 69 |
| | |
ITEM 4. | CONTROLS AND PROCEDURES | 69 |
| | |
PART II. | OTHER INFORMATION | 70 |
| | |
ITEM 1. | LEGAL PROCEEDINGS | 70 |
ITEM 1A. | RISK FACTORS | 70 |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 70 |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 70 |
ITEM 4. | MINE SAFETY DISCLOSURES | 70 |
ITEM 5. | OTHER INFORMATION | 70 |
ITEM 6. | EXHIBITS | 70 |
| | June 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | (A) | | ||
Assets | | | | | | | |
Current assets | | | | | | | |
Cash | | $ | 20,806,414 | | $ | 175,488,715 | |
Notes receivable (banker's acceptances) transferred from related parties | | | - | | | 3,645,817 | |
Accounts receivable - third parties | | | 18,603,522 | | | 34,924,685 | |
Cost and estimated earnings in excess of billings on contracts in progress | | | 8,341,705 | | | 8,133,021 | |
Other receivables | | | 10,661,783 | | | 34,074 | |
Advance to related parties | | | - | | | 49,802,821 | |
Prepaid expenses | | | 24,000 | | | 410,966 | |
Inventories | | | 7,344,328 | | | 5,223,984 | |
Total current assets | | | 65,781,752 | | | 277,664,083 | |
| | | | | | | |
Other assets | | | | | | | |
Prepaid other deposits | | | - | | | 4,430 | |
Prepaid dredger deposits | | | 23,625,640 | | | 23,274,105 | |
Prepaid fishing vessel deposits | | | 410,017,680 | | | - | |
Security deposits | | | 18,607,228 | | | 25,087,880 | |
Long-term investment | | | 3,421,644 | | | 3,328,789 | |
Deposit on setting up of Joint Venture | | | - | | | 6,090,302 | |
Deposit for BT project | | | 67,862,613 | | | 66,852,860 | |
Property, plant and equipment, net | | | 93,958,771 | | | 81,707,388 | |
Total other assets | | | 617,493,576 | | | 206,345,754 | |
Total assets | | $ | 683,275,328 | | $ | 484,009,837 | |
| | | | | | | |
Liabilities and equity | | | | | | | |
Current liabilities | | | | | | | |
Accounts payable - third parties | | $ | 8,875,293 | | $ | 3,761,149 | |
- related parties | | | - | | | 5,765,632 | |
Receipt in advance - third parties | | | 2,452,945 | | | - | |
- related parties | | | - | | | 12,681,102 | |
Short-term loans | | | 20,144,510 | | | 25,169,260 | |
Long-term loans - current portion | | | 11,381,041 | | | 8,094,308 | |
Income tax payable | | | 5,395,826 | | | 5,333,519 | |
Accrued liabilities and other payables | | | 13,046,446 | | | 3,738,134 | |
Advance from a shareholder | | | 480,472 | | | 714,177 | |
Derivative liability | | | - | | | 1,764,249 | |
Deferred income | | | 9,522,925 | | | - | |
Total current liabilities | | | 71,299,458 | | | 67,021,530 | |
| | | | | | | |
Other liabilities | | | | | | | |
Note payable | | | 155,166,195 | | | - | |
Long-term loans, net of current portion | | | 12,195,718 | | | 16,689,321 | |
Total other liabilities | | | 167,361,913 | | | 16,689,321 | |
Total liabilities | | | 238,661,371 | | | 83,710,851 | |
| | | | | | | |
Shareholders' equity | | | | | | | |
Ordinary shares, 225,000,000 shares authorized with $0.001 authorized with $0.001 per share; 79,055,053 shares issued and outstanding as of June 30, 2013 and December 31, 2012 | | | 79,055 | | | 79,055 | |
Additional paid-in capital | | | 141,381,098 | | | 141,381,098 | |
Statutory reserves | | | 19,770,660 | | | 19,386,642 | |
Retained earnings | | | 255,400,496 | | | 217,224,220 | |
Accumulated other comprehensive income | | | 27,982,648 | | | 22,227,971 | |
Total shareholders’ equity | | | 444,613,957 | | | 400,298,986 | |
Total liabilities and shareholders' equity | | $ | 683,275,328 | | $ | 484,009,837 | |
(A) | Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2012 rather than on February 25, 2013. |
| | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 (A) | | 2013 | | 2012 (A) | | ||||
| | | | | | | | | | | | | |
Revenue | | $ | 71,909,988 | | $ | 69,925,881 | | $ | 118,318,535 | | $ | 144,981,615 | |
| | | | | | | | | | | | | |
Cost of revenue | | | (37,453,696) | | | (36,743,216) | | | (67,768,326) | | | (74,474,445) | |
| | | | | | | | | | | | | |
Gross profit | | | 34,456,292 | | | 33,182,665 | | | 50,550,209 | | | 70,507,170 | |
| | | | | | | | | | | | | |
Selling and marketing expenses | | | (174,046) | | | (252,168) | | | (368,734) | | | (461,842) | |
| | | | | | | | | | | | | |
General and administrative expenses | | | (3,174,413) | | | (2,549,009) | | | (4,582,228) | | | (5,021,724) | |
| | | | | | | | | | | | | |
Operating income | | | 31,107,833 | | | 30,381,488 | | | 45,599,247 | | | 65,023,604 | |
| | | | | | | | | | | | | |
Other income/(expense) | | | | | | | | | | | | | |
Dividend income | | | 69,071 | | | - | | | 69,071 | | | - | |
Interest income | | | 216,768 | | | 183,026 | | | 386,900 | | | 333,295 | |
Interest expenses | | | (914,419) | | | (894,036) | | | (1,599,796) | | | (1,358,650) | |
Subsidy income | | | 205 | | | - | | | 35,592 | | | - | |
Sundry income | | | 11 | | | - | | | 2,014 | | | - | |
Gain on investment | | | - | | | 15,126 | | | - | | | 15,126 | |
Loss on foreign exchange, net | | | (428,389) | | | (82,133) | | | (220,405) | | | (30,595) | |
(Loss)/gain on derivative | | | - | | | (728,720) | | | 1,764,249 | | | (921,677) | |
Total other income/(expense) | | | (1,056,753) | | | (1,506,737) | | | 437,625 | | | (1,962,501) | |
| | | | | | | | | | | | | |
Income before income taxes | | | 30,051,080 | | | 28,874,751 | | | 46,036,872 | | | 63,061,103 | |
| | | | | | | | | | | | | |
Income tax expense | | | (5,273,327) | | | (7,533,940) | | | (7,476,578) | | | (14,863,836) | |
| | | | | | | | | | | | | |
Net income | | $ | 24,777,753 | | $ | 21,340,811 | | $ | 38,560,294 | | $ | 48,197,267 | |
| | | | | | | | | | | | | |
Earnings per ordinary share | | | | | | | | | | | | | |
- Basic and diluted | | $ | 0.31 | | $ | 0.27 | | $ | 0.49 | | $ | 0.61 | |
| | | | | | | | | | | | | |
Weighted average number of ordinary shares outstanding | | | | | | | | | | | | | |
- Basic and diluted | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | |
(A) | Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2012 rather than on February 25, 2013. |
| | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 (A) | | 2013 | | 2012 (A) | | ||||
| | | | | | | | | | | | | |
Net income | | $ | 24,777,753 | | $ | 21,340,811 | | $ | 38,560,294 | | $ | 48,197,267 | |
| | | | | | | | | | | | | |
Other comprehensive income | | | | | | | | | | | | | |
Foreign currency translation gain/(loss) | | | 4,202,178 | | | (3,020,912) | | | 5,754,677 | | | (2,928,277) | |
Total comprehensive income | | $ | 28,979,931 | | $ | 18,319,899 | | $ | 44,314,971 | | $ | 45,268,990 | |
(A) | Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2012 rather than on February 25, 2013. |
| | Ordinary Shares, | | | | | | | | | | | Accumulated | | | | | |||||
| | with no Par Value | | Additional | | | | | | | | other | | Total | | |||||||
| | Number of | | | | | paid-in | | Statutory | | | Retained | | comprehensive | | shareholders' | | |||||
| | Shares | | Amount | | capital | | reserves | | earnings | | income | | equity | | |||||||
| | | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2013 (A) | | | 79,055,053 | | $ | 79,055 | | $ | 141,381,098 | | $ | 19,386,642 | | $ | 217,224,220 | | $ | 22,227,971 | | $ | 400,298,986 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | | - | | | - | | | - | | | - | | | 38,560,294 | | | - | | | 38,560,294 | |
| | | | | | | | | | | | | | | | | | | | | | |
Appropriation to statutory reserves | | | - | | | - | | | - | | | 384,018 | | | (384,018) | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation gain | | | - | | | - | | | - | | | - | | | - | | | 5,754,677 | | | 5,754,677 | |
| | | | | | | | | | | | | | | | | | | | | | |
Balance as of June 30, 2013 | | | 79,055,053 | | $ | 79,055 | | $ | 141,381,098 | | $ | 19,770,660 | | $ | 255,400,496 | | $ | 27,982,648 | | $ | 444,613,957 | |
(A) | Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2012 rather than on February 25, 2013. |
| | For the Six Months Ended June 30, | | ||||
| | 2013 | | 2012 (A) | | ||
Cash flows from operating activities | | | | | | | |
Net income | | $ | 38,560,294 | | $ | 48,197,267 | |
Adjustments to reconcile net income to net cash provided by operating activities | | | | | | | |
Depreciation of property, plant and equipment | | | 5,347,650 | | | 5,555,301 | |
(Gain)/loss on derivative | | | (1,764,249) | | | 921,677 | |
Available-for-sale financial instrument fair value adjustment | | | - | | | (721) | |
| | | | | | | |
Changes in operating assets and liabilities | | | | | | | |
Accounts receivable - third parties | | | 16,875,326 | | | (14,880) | |
- related parties | | | - | | | (1,688,997) | |
Cost and estimated earnings in excess of billings on contracts in progress | | | (85,235) | | | (5,749,657) | |
Other receivables | | | (2,957,500) | | | (4,526,907) | |
Prepaid expenses | | | 394,949 | | | 5,165,650 | |
Inventories | | | (2,024,538) | | | 951,295 | |
Accounts payable - third parties | | | 5,020,682 | | | 1,715,489 | |
- related parties * | | | 331,367 | | | 907,893 | |
Receipt in advance - third parties | | | 2,435,603 | | | (1,064,711) | |
- related parties | | | (12,942,680) | | | - | |
Income tax payable | | | (18,121) | | | (712,176) | |
Accrued liabilities and other payables | | | 9,180,577 | | | (177,157) | |
Net cash provided by operating activities | | | 58,354,125 | | | 49,479,366 | |
| | | | | | | |
Cash flows from investing activities | | | | | | | |
Deposit paid for acquisition of fishing vessels | | | (200,000,000) | | | - | |
Changes in security deposits | | | 6,811,085 | | | - | |
Payment for long-term investment | | | - | | | (2,992,116) | |
Proceeds from disposition of short-term investment | | | - | | | 792,286 | |
Proceeds from deferred income | | | 1,861,416 | | | - | |
Purchase of property, plant and equipment | | | (15,360,530) | | | (5,330,180) | |
Advance to related parties | | | (8,731,951) | | | (35,700,532) | |
Net cash used in investing activities | | | (215,419,980) | | | (43,230,542) | |
| | For the Six Months Ended June 30, | | ||||
| | 2013 | | 2012 (A) | | ||
Cash flows from financing activities | | | | | | | |
Proceeds from short-term loans | | | 24,994,395 | | | 28,556,774 | |
Repayment of short-term loans | | | (30,680,742) | | | (30,928,269) | |
Proceeds from long-term loans | | | - | | | 21,688,883 | |
Repayment of long-term loans | | | (1,884,778) | | | - | |
Advance from related parties | | | 8,571,161 | | | 20,139,296 | |
Advance from a shareholder | | | (233,705) | | | 1,006 | |
Net cash provided by financing activities | | | 766,331 | | | 39,457,690 | |
| | | | | | | |
Net (decrease)/increase in cash | | | (156,299,524) | | | 45,706,514 | |
| | | | | | | |
Effect of exchange rate | | | 1,617,223 | | | (1,275,105) | |
| | | | | | | |
Cash at the beginning of period | | | 175,488,715 | | | 114,204,340 | |
| | | | | | | |
Cash at the end of period | | $ | 20,806,414 | | $ | 158,635,749 | |
| | | | | | | |
Supplemental disclosure of cash flow information: | | | | | | | |
Cash paid: | | | | | | | |
Income tax paid | | $ | 7,494,648 | | $ | 15,576,011 | |
| | | | | | | |
Interest paid | | $ | 1,395,742 | | $ | 1,358,650 | |
(A) Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2012 rather than on February 25, 2013. |
1. | DESCRIPTION OF BUSINESS AND ORGANIZATION |
Name of subsidiaries | | Place and date of incorporation | | Percentage of ownership | | Principal activities | |
| | | | | | | |
China Dredging Group Co., Ltd | | BVI | | 100% held by PME | | Intermediate holding | |
(“CDGC” or “China | | April 14, 2010 | | | | company | |
Dredging”) | | | | | | | |
| | | | | | | |
China Dredging (HK) | | Hong Kong, | | 100% through CDGC | | Intermediate holding | |
Company Limited | | April 26, 2010 | | | | company | |
(“China Dredging HK”) | | | | | | | |
| | | | | | | |
Master Gold Corporation | | Hong Kong, | | 100% through CDGC | | Intermediate holding | |
Limited (“Master Gold”) | | June 1, 2012 | | | | company | |
| | | | | | | |
Fujian Wanggang Dredging | | PRC | | 100% through China | | Intermediate holding | |
Construction Co., Ltd | | June 12, 2010 | | Dredging HK; | | company | |
(“Fujian Wanggang”) | | | | VIE Agreement signed with Wonder Dredging | | | |
| | | | | | | |
Pingtan Xingyi Port Service | | PRC | | 100% through Wonder | | BT project involves | |
Co., Ltd (“Pingtan Xingyi”) | | August 6, 2012 | | Dredging | | dredging, reclamation and | |
| | | | | | cofferdam construction | |
| | | | | | | |
Pingtan Zhuoying Dredging | | PRC | | 100% through Master | | Intermediate holding | |
Engineering Construction | | September 26, 2012 | | Gold | | company | |
Co., Ltd (“Pingtan Zhuoying”) | | | | | | | |
| | | | | | | |
Merchant Supreme Co., Ltd. | | BVI, | | 100% held by PME | | Intermediate holding | |
(“Merchant Supreme”) | | June 25, 2012 | | | | company | |
| | | | | | | |
Prime Cheer Corporation | | Hong Kong, | | 100% held by Merchant | | Intermediate holding | |
Ltd. (“Prime Cheer”) | | May 3, 2012 | | Supreme | | company | |
| | | | | | | |
Pingtan Guansheng Ocean | | PRC | | 100% held by Prime | | Intermediate holding | |
Fishing Co., Ltd. | | October 12, 2012 | | Cheer | | company | |
("Pingtan Guansheng") | | | | | | | |
Name of Variable Interest Entities | | Place and date of incorporation | | Percentage of ownership | | Principal activities | |
| | | | | | | |
Wonder Dredging Engineering | | PRC | | 91% owned by Qing Lin and | | Intermediate holding | |
LLC (“Wonder Dredging”) | | May 10, 2010 | | 9% owned by Panxing Zhuo; VIE agreement signed with Fujian Wanggang | | company | |
| | | | | | | |
Fujian Xinggang Port Service | | PRC | | 50% through Fujian | | Provides specialized | |
Co., Ltd. (“Fujian Service”) | | January 8, 2008 | | Wanggang and 50% through Wonder Dredging; VIE agreement signed with Fujian Wanggang | | dredging services | |
| | | | | | | |
Fujian Provincial Pingtan | | PRC | | 70% owned by Honghong | | Engages in ocean fishing | |
County Fishing Group Co., Ltd. (“Pingtan Fishing”) | | February 27, 1998 | | Zhuo and 30% owned by Zhiyan Lin; VIE agreement signed with Pingtan Guansheng | | and sale of frozen marine catches | |
| | | | | | | |
Pingtan Dingxin Fishing | | PRC | | 100% through Pingtan | | No business activity | |
Information Consulting Co., | | October 21, 2012 | | Fishing | | | |
Ltd. (“Pingtan Dingxin”) | | | | | | | |
| | | | | | | |
Pingtan Duoying Fishing | | PRC | | 100% through Pingtan | | No business activity | |
Information Consulting Co., | | October 21, 2012 | | Fishing | | | |
Ltd. (“Pingtan Duoying”) | | | | | | | |
| | | | | | | |
Pingtan Ruiying Fishing | | PRC | | 100% through Pingtan | | No business activity | |
Information Consulting Co., | | October 21, 2012 | | Fishing | | | |
Ltd. (“Pingtan Ruiying”) | | | | | | | |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| (a) | Basis of presentation |
| (b) | Consolidation of VIE |
| | June 30, 2013 (Unaudited) | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
ASSETS | | | | | | | | | | |
Cash | | $ | 6,992 | | $ | 16,879,547 | | $ | 455,104 | |
Accounts receivable - third parties | | | - | | | 14,297,260 | | | 4,306,262 | |
Cost and estimated earnings in excess of billings on contracts in progress | | | - | | | 8,341,705 | | | - | |
Other receivables | | | - | | | 2,919 | | | 7,659,717 | |
Advance to related parties | | | - | | | - | | | 8,226 | |
Inventories | | | - | | | 5,104,738 | | | 2,239,590 | |
Prepaid dredger deposits | | | - | | | 2,444,032 | | | - | |
Prepaid fishing vessel deposits | | | - | | | - | | | 410,017,680 | |
Security deposits | | | - | | | 18,607,228 | | | - | |
Long-term investment | | | - | | | - | | | 3,421,644 | |
Property, plant and equipment, net | | | - | | | 41,812,940 | | | 51,573,980 | |
| | $ | 6,992 | | $ | 107,490,369 | | $ | 479,682,203 | |
| | | | | | | | | | |
LIABILITIES | | | | | | | | | | |
Accounts payable - third parties | | $ | - | | $ | 3,505,737 | | $ | 2,703,021 | |
Receipt in advance - third parties | | | - | | | - | | | 360,726 | |
Short-term loans | | | - | | | - | | | 20,144,510 | |
Income tax payable | | | - | | | 5,062,545 | | | - | |
Accrued liabilities and other payables | | | - | | | 2,202,403 | | | 10,120,061 | |
Advance from related parties | | | 4,888,063 | | | - | | | 155,388,195 | |
Deferred income | | | - | | | - | | | 9,522,925 | |
Long-term loans | | | - | | | - | | | 23,576,759 | |
| | $ | 4,888,063 | | $ | 10,770,685 | | $ | 221,816,197 | |
| | December 31, 2012 | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
ASSETS | | | | | | | | | | |
Cash | | $ | 7,232 | | $ | 164,323,611 | | $ | 6,710,472 | |
Notes receivable (banker's acceptances) transferred from related parties | | | - | | | - | | | 3,645,817 | |
Accounts receivable - third parties | | | - | | | 23,446,249 | | | 11,478,436 | |
Cost and estimated earnings in excess of billings on contracts in progress | | | - | | | 8,133,021 | | | - | |
Other receivables | | | - | | | 2,868 | | | 29,885 | |
Advance to related parties | | | - | | | - | | | 49,802,897 | |
Prepaid expenses | | | - | | | - | | | 386,966 | |
Inventories | | | - | | | 5,029,653 | | | 194,331 | |
Prepaid dredger deposits | | | - | | | 2,407,666 | | | - | |
Security deposits | | | - | | | 25,087,880 | | | - | |
Long-term investment | | | - | | | - | | | 3,328,789 | |
Deposit on setting up Joint Venture | | | - | | | - | | | 6,092,302 | |
Property, plant and equipment, net | | | - | | | 44,479,511 | | | 37,141,906 | |
| | $ | 7,232 | | $ | 272,910,459 | | $ | 118,811,801 | |
| | | | | | | | | | |
LIABILITIES | | | | | | | | | | |
Accounts payable - third parties | | $ | - | | $ | 3,690,417 | | $ | 70,732 | |
- related parties | | | - | | | - | | | 5,765,632 | |
Receipt in advance - related parties | | | - | | | - | | | 12,681,102 | |
Short-term loans | | | - | | | - | | | 25,169,260 | |
Income tax payable | | | - | | | 5,333,519 | | | - | |
Accrued liabilities and other payables | | | - | | | 2,257,638 | | | 1,033,640 | |
Long-term loans | | | - | | | - | | | 24,783,629 | |
| | $ | - | | $ | 11,281,574 | | $ | 69,503,995 | |
| | For the Three Months Ended June 30, 2013 (Unaudited) | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
| | | | | | | | | | |
Revenue | | $ | - | | $ | 38,855,181 | | $ | 21,362,357 | |
| | | | | | | | | | |
Cost of revenue | | $ | - | | $ | (17,249,269) | | $ | (12,235,475) | |
| | | | | | | | | | |
Net (loss)/income attributable to the Company | | $ | (6,674) | | $ | 15,137,209 | | $ | 7,727,927 | |
| | For the Three Months Ended June 30, 2012 (Unaudited) | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
| | | | | | | | | | |
Revenue | | $ | - | | $ | 59,594,550 | | $ | 10,331,331 | |
| | | | | | | | | | |
Cost of revenue | | $ | - | | $ | (27,573,111) | | $ | (9,170,105) | |
| | | | | | | | | | |
Net (loss)/income attributable to the Company | | $ | (5,267) | | $ | 22,535,808 | | $ | (383,106) | |
| | For the Six Months Ended June 30, 2013 (Unaudited) | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
| | | | | | | | | | |
Revenue | | $ | - | | $ | 59,549,223 | | $ | 41,031,833 | |
| | | | | | | | | | |
Cost of revenue | | $ | - | | $ | (28,628,115) | | $ | (26,527,609) | |
| | | | | | | | | | |
Net (loss)/income attributable to the Company | | $ | (6,703) | | $ | 21,759,932 | | $ | 12,234,219 | |
| | For the Six Months Ended June 30, 2012 (Unaudited) | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
| | | | | | | | | | |
Revenue | | $ | - | | $ | 119,094,081 | | $ | 25,887,534 | |
| | | | | | | | | | |
Cost of revenue | | $ | - | | $ | (55,595,229) | | $ | (18,879,216) | |
| | | | | | | | | | |
Net (loss)/income attributable to the Company | | $ | (4,058) | | $ | 44,485,545 | | $ | 4,804,532 | |
| | For the Six Months Ended June 30, 2013 (Unaudited) | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
| | | | | | | | | | |
Net cash (used in)/provided by operating activities | | $ | (6,703) | | $ | 34,280,668 | | $ | 18,944,116 | |
Net cash used in investing activities | | | (7,280,258) | | | (182,671,235) | | | (221,709,655) | |
Net cash provided by financing activities | | | 7,286,614 | | | - | | | 195,850,824 | |
Net decrease in cash | | | (347) | | | (148,390,567) | | | (6,914,715) | |
Effect of exchange rate | | | 107 | | | 946,503 | | | 659,347 | |
Cash at the beginning of the period | | | 7,232 | | | 164,323,611 | | | 6,710,472 | |
Cash at the end of the period | | $ | 6,992 | | $ | 16,879,547 | | $ | 455,104 | |
| | For the Six Months Ended June 30, 2012 (Unaudited) | | |||||||
| | Wonder | | Fujian | | Pingtan Fishing | | |||
| | Dredging | | Service | | Group | | |||
| | | | | | | | | | |
Net cash (used in)/provided by operating activities | | $ | (4,068) | | $ | 47,704,970 | | $ | 2,182,667 | |
Net cash used in investing activities | | | - | | | - | | | (43,230,542) | |
Net cash provided by/(used in) financing activities | | | 6,468 | | | (94,617) | | | 39,456,684 | |
Net increase/(decreased) in cash | | | 2,400 | | | 47,610,353 | | | (1,591,191) | |
Effect of exchange rate | | | (8,923) | | | (1,274,412) | | | 10,673 | |
Cash at the beginning of the period | | | 957,786 | | | 110,535,418 | | | 1,794,796 | |
Cash at the end of the period | | $ | 951,263 | | $ | 156,871,359 | | $ | 214,278 | |
| (c) | Use of estimates |
| (d) | Foreign currency translation |
China Dredging | | | | | |
| | June 30, 2013 | | December 31, 2012 | |
Balance sheet items, except for equity accounts | | RMB6.1374=$1 | | RMB6.2301=$1 | |
| | HKD7.756=$1 | | HKD7.7507=$1 | |
| | For the Three Months Ended June 30, | | ||
| | 2013 | | 2012 | |
Items in statements of income and cash flows | | RMB6.1454=$1 | | RMB6.3335=$1 | |
| | HKD7.7597=$1 | | HKD7.7592=$1 | |
| | For the Six Months Ended June 30, | | ||
| | 2013 | | 2012 | |
Items in statements of income and cash flows | | RMB6.1811=$1 | | RMB6.3166=$1 | |
| | HKD7.7588=$1 | | HKD7.7590=$1 | |
Merchant Supreme | | | | | |
| | June 30, 2013 | | December 31, 2012 | |
Balance sheet items, except for equity accounts | | RMB6.1374=$1 | | RMB6.3086=$1 | |
| | HKD7.756=$1 | | HKD7.7507=$1 | |
| | For the Three Months Ended June 30, | | ||
| | 2013 | | 2012 | |
Items in statements of income and cash flows | | RMB6.1454=$1 | | RMB6.3335=$1 | |
| | HKD7.7597=$1 | | HKD7.7592=$1 | |
| | For the Six Months Ended June 30, | | ||
| | 2013 | | 2012 | |
Items in statements of income and cash flows | | RMB6.1811=$1 | | RMB6.3166=$1 | |
| | HKD7.7588=$1 | | HKD7.7590=$1 | |
| (e) | Cash |
| (f) | Accounts receivable |
| (g) | Revenue recognition |
| (h) | Cost and estimated earnings in excess of billings on contracts in progress |
| (i) | Government grant |
| (j) | Deferred income |
| (k) | Fishing licenses |
| (l) | Inventories |
| (m) | Property, plant and equipment |
| | Estimated lives | |
Dredger | | 7.5-10 | |
Fishing vessel | | 10-20 | |
Major improvement on fishing vessel | | 4-20 | |
Motor vehicle | | 3-5 | |
Machinery | | 3-5 | |
Office equipment | | 3-5 | |
| (n) | Capitalized Interest |
| (o) | Impairment of long-lived assets |
| (p) | Income taxes |
| (q) | Fair value measurements |
| (r) | Commitments and contingencies |
| (s) | Economic and political risks |
| (t) | Pension and employee benefits |
| (u) | Segment information |
| (v) | Earnings per ordinary share |
| | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | ||||
| | | | | | | | | | | | | |
Net income | | $ | 24,777,753 | | $ | 21,340,811 | | $ | 38,560,294 | | $ | 48,197,267 | |
| | | | | | | | | | | | | |
Weighted average number of ordinary shares outstanding (Basic and diluted) | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | |
| | | | | | | | | | | | | |
Earnings per ordinary share (Basic and diluted) | | $ | 0.31 | | $ | 0.27 | | $ | 0.49 | | $ | 0.61 | |
| 3. | SEGMENT INFORMATION |
| a) | Dredging service |
| b) | Ocean fishery |
China Dredging | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | ||||
Dredging service | | | | | | | | | | | | | <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ccffcc; FONT-SIZ