Investments

12 Months Ended

Dec. 31, 2021

Investments [Abstract]

INVESTMENTS

NOTE 3 INVESTMENTS

Trading securities

Investments in equity securities of certain US public companies are accounted for as trading securities and measured subsequently at fair value in the consolidated balance sheets. Net gains and losses recognized during the periods are summarized as follows (In thousands of U.S. Dollars).

	December 31, 2021			December 31, 2020
	(In thousands of U.S. Dollars)
Net gains recognized during the period on trading securities	$	150		$	131
Less: Net (losses) and gains recognized during the period on trading securities sold during the period		186			77
Unrealized gains recognized during the reporting period on trading securities still held at the reporting date	$	(36	)		54

Equity security investment

In August 2020, Ever-Glory Apparel invested $3.1 million (RMB 20.0 million) for 2.38% ownership in a partnership (“Partnership”). In December 2020, the Partnership invested in a public company in China. As a limited partner, the Company does not have ability to exercise significant influence due to lack of kick-out rights through voting interests. In the meantime, the Company entered an agreement with the general partner of the Partnership (GP) and an individual that the Company has the privilege to sell the ownership interests in the Partnership to GP or the individual for the consideration of the average net asset value ten trading days prior to the closing date, if the Company is not able to withdraw any part of the original investment from the Partnership in the twelve months period beginning the third year of the initial investment (“optional withdrawal period”). If the Company opts to withdraw entire investment during the optional withdrawal period, the GP will compensate up to 8% of annual return on investment. If the return on investment is in excess of 8% for any portion of the investment withdrawn during the optional withdrawal period, then 20% of the return in excess of 8% will be shared with the individual. The Company may also continue to invest in the Partnership beyond the optional withdrawal period, but none of above agreement with the GP and the individual is in place.

In December 2020, the Partnership invested in a public company in China. Since there is now readily determinable fair value of the equity investment, the Company started to measure its equity investment using the public company’s stock price and the Company’s share. The Company reported this investment at fair value since December 31, 2020. At each reporting period, the Company made a qualitative assessment considering impairment indicators to evaluate whether the investment is impaired. There is no significant adverse change in the regulatory, economic, or technological environment of the investee.

Investment advances

In September 2021, Goldenway signed an agreement and promised to invest $8.0 million (RMB 50.0 million) cash for 20% interest of a Chinese private company. Under the agreement, Goldenway has the liquidation privilege to receive its share of the investee’s residual of its liquidated assets. If Goldenway’s share is less than its original investment amount plus 8% of annual return on investment, all other shareholders who signed this agreement shall use their shares of the liquidated assets to compensate Goldenway. The investee also shall compensate Goldenway if the investee cannot make agreed upon profits and the number of customers. In September 2021 and January 2022, Goldenway advanced $0.8 million (RMB 5.0 million) each to the investee. The investment advances were recorded as other non-current assets. The full investment is scheduled to be paid by March 2022.