2025-04-25-港交所-Ｆ山证铁矿石_Ｆ山证铁矿石－Ｕ_2024年年报_55页_5mb

Summary of SSIF DCE Iron Ore Futures Index ETF

Core Content

The SSIF DCE Iron Ore Futures Index ETF is a sub-fund of SSIF ETF I, an umbrella unit trust governed by the Trust Deed dated 24 February 2020. It is a passively managed exchange-traded fund (ETF) listed on The Stock Exchange of Hong Kong Limited (SEHK) under two trading counters: HKD (03047) and USD (09047), which commenced trading on 27 March 2020.

The ETF is designed to track the DCE Iron Ore Futures Price Index, with the investment objective to provide returns closely aligned with the index's performance before deducting fees and expenses. The Manager, Shanxi Securities International Asset Management Limited, uses a full replication strategy by investing directly in DCE Iron Ore Futures Contracts.

Key Financial Information (as at 31 December 2024)

• Net Asset Value (NAV) per unit: USD2.8183 (compared to USD3.0870 in 2023)
• Number of units outstanding: 3,800,000 (compared to 4,600,000 in 2023)
• Total net assets: USD10,709,398 (compared to USD14,200,074 in 2023)
• Total assets: USD10,858,973 (compared to USD14,392,219 in 2023)
• Total liabilities: USD149,612 (compared to USD204,823 in 2023)

Main Viewpoints

Market Performance

• In 2024, the iron ore market showed moderate growth, with the DCE Iron Ore Futures Price Index declining by 14.12% after a sharp increase of 51.73% in 2023.
• Global demand remained relatively stable, with China's infrastructure spending still a major driver, though growth slowed slightly.
• Emerging economies like India continued to show rising demand.
• Supply challenges eased due to reduced disruptions from the COVID-19 pandemic and resumption of some mining operations.
• Geopolitical tensions and logistical bottlenecks contributed to price volatility, but did not significantly alter the overall market trend.

Market Outlook

• The iron ore market is expected to experience steady growth in the coming years.
• Global economic growth will be a key determinant of future demand.
• China's economic policies and infrastructure spending will remain critical.
• Sustainability and decarbonization pressures in the steel industry may lead to long-term changes in production and potentially reduce demand for traditional iron ore.
• Technological advancements could improve efficiency and alter the supply-demand balance.

Audit and Financial Reporting

• The Independent Auditor confirmed that the financial statements give a true and fair view of the Sub-Fund's financial position as of 31 December 2024 and its financial transactions for the year.
• The audit was conducted in accordance with Hong Kong Standards on Auditing (HKSAs).
• Key audit matters included the existence and valuation of investments, which were verified through:
  • Independent confirmations from custodians
  • Comparison of prices with quoted net asset values and last traded prices
  • Review of internal controls and service organisation audit reports
• The financial statements were approved by the Manager and Trustee on 25 April 2025.

Manager and Trustee Responsibilities

• The Manager is responsible for:
  • Preparing financial statements that provide a true and fair view
  • Ensuring the Sub-Fund is managed in accordance with the Trust Deed
  • Implementing internal controls to prevent fraud and irregularities
• The Trustee is responsible for:
  • Ensuring compliance with the Trust Deed and the SFC Code
  • Safeguarding the Sub-Fund's assets and rights
  • Reporting to unitholders if the Manager fails to comply with the Trust Deed

Financial Statements Highlights

Statement of Comprehensive Income

• 2024 Income: USD148,701 (Dividend income), USD17,255 (Interest income), and a net loss of USD1,041,649 on investments and financial derivatives.
• 2024 Expenses: Total operating expenses amounted to USD323,089, including management and trustee fees, transaction costs, and audit fees.
• Operating loss for 2024: USD1,283,563
• Finance costs: USD10,352
• Total comprehensive loss for 2024: USD1,293,915

Statement of Changes in Net Assets

• Net assets at the beginning of the year: USD14,187,396
• Net decrease from unit transactions: USD2,184,120 (due to redemptions)
• Net assets at the end of the year: USD10,709,361
• Units outstanding: 3,800,000 (down from 4,600,000 in 2023)

Statement of Cash Flows

• Net cash generated from operating activities: USD3,251,914
• Net cash used in financing activities: USD2,184,120 (due to unit redemptions)
• Cash and cash equivalents at the end of the year: USD1,841,977
• Effect of foreign exchange rate changes: USD(84,781)

Notes to the Financial Statements

• The financial statements are prepared in USD and follow HKFRS and HKAS standards.
• The Sub-Fund applies a full replication strategy to mirror the Underlying Index.
• Investment Portfolio (unaudited) constitutes a major portion of the Sub-Fund's assets and is subject to valuation and confirmation procedures.
• Financial Derivative Instruments are valued using quoted prices and last traded prices from independent sources.

Conclusion

The SSIF DCE Iron Ore Futures Index ETF continues to be managed in accordance with its Trust Deed and the SFC Code, with a focus on index tracking through direct investment in DCE Iron Ore Futures Contracts. While the market experienced a decline in 2024, the ETF is positioned for long-term growth driven by infrastructure development and emerging market demand. The audit procedures were thorough and confirmed the accuracy and fairness of the financial statements. The net asset value and unit count have decreased compared to 2023, reflecting redemption activity and market conditions.