XML 20 R10.htm IDEA: XBRL DOCUMENT v3.22.1
Investments
3 Months Ended
Mar. 31, 2022
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 three months periods are summarized as follows (In thousands of U.S. Dollars).

   

   March 31,
2022
   March 31,
2021
 
   (In thousands of
U.S. Dollars)
 
Net gains recognized during the period on equity securities  $       283   $    262 
Less: Net gains recognized during the period on equity securities sold during the period   2    54 
Unrealized gains recognized during the reporting period on equity securities still held at the reporting date  $281   $208 

 

Equity security investment

 

In August 2020, Ever-Glory Apparel invested $3.2 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 If the return on investment is in excess of 8% for any portion of the investment withdrawn during the optional withdrawal period, then 20% of the return in excess of 8% will be shared with the individual.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 readily determinable fair value of the equity investment, the Company started to measure its equity investment at fair value using the public company’s stock price and the Company’s shares since December 31, 2020. At each reporting period, the Company makes 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. There were no indications of impairment during the period ended March 31, 2022.

 

Investment advances

 

In September 2021, Goldenway signed an agreement and promised to invest $7.9 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. As of March 31, 2022 , Goldenway advanced $1.6 million (RMB10.0 million) to the investee. Additional $ 0.8 million (RMB 5.0 million) was made in April 2022. The investment advances were recorded as other non-current assets.