Good afternoon, ladies and gentlemen. Welcome to the 2017 interim results announcement press conference of China Everbright Limited. Let me first introduce to you CEL's management. Today with us seated in the middle, we have Mr. Chen Shuang, Executive Director and Chief Executive Officer. To his right is Mr. Richard Tang, Executive Director and Chief Financial Officer. Seated to Mr. Chen's left is Mr. Frederick Tsang, Chief Risk Officer of China Everbright Limited. During the press conference today, Mr. Chen and Mr. Tang will review the business operations and financial performance of CEL in the first half of 2017. At the end of the presentation, there will be a question and answer session. Now, I invite Mr. Chen to give us a review of CEL's business performance. Mr. Chen, please.
Good afternoon, ladies and gentlemen. Welcome to the China Everbright Limited 2017 interim results announcement.
Today, I will share with you the details of our recent business developments and strategic planning for the second half of 2017. Our CFO, Richard Tang, will talk about our business performance from a financial perspective for the first half of this year. First of all, I would like to share two highlights from our interim results. Number one, in the first half of 2017, profit attributable to our shareholders amounted to HKD 1.49 billion, representing a year-on-year increase of 6%. Number two, our direct operating businesses, which comprise the fund management and private investment businesses, posted a profit of HKD 987 million, up 73% year-on-year. The board of directors has recommended to declare an interim dividend of HKD 0.25 per share, which is the same as last year's interim dividend.
Now it is my pleasure to share with you a number of breakthroughs we achieved in the first half of 2017. First of all, the total fundraising scale for CEL's fund management business officially broke the HKD 100 billion mark to reach HKD 106.6 billion. Also, it is important to note that CEL and China Merchants Bank jointly set up an RMB 5 billion Everbright CMB Multi-strategy Equity Investment Fund, demonstrating once again our ability to fulfill the demand for asset allocation among major organizations. In 2016, CEL invested funds from EBA Investments funds in Shanghai Jiabao. In the first half of 2017, CEL raised its stake in Shanghai Jiabao to 24.33%, which demonstrates our confidence in the prospects of EBA Investments real estate business. As a listed company, our team has showcased strong capabilities in asset management and helped achieve industry finance integration.
The renamed group will emphasize an asset-light business model moving forward. We remain the single largest shareholder of China Aircraft Leasing Company, or CALC. During the period under review, we helped it acquire 100% of Universal Asset Management, or UAM, a U.S.-based company which is a world leading provider of global aviation solutions through a general offer. We also assisted CALC in completing an agreement to purchase 50 new airplanes from the Boeing 737 MAX family. The group also helped promote the sale of finance lease receivables, making it part of CALC's recurrent business and helping the company develop its in-depth industry finance integration capabilities. Now, please allow me to analyze CEL's development focuses based on four key elements of the private equity industry, namely fundraising, investment, post investment management, and divestment. First of all, we achieved better fundraising performance.
In terms of the categories of CEL funds, we have VC, PE, sector investment, FOF, and a series of different funds in our platform. The variety of funds is complete. Meanwhile, we have teams of professionals with sound knowledge of a diverse range of industries who can meet every demand from different types of investors. In addition, our abundant private capital has enabled us to build warehouse projects for funds at early stages. Our fund investors cover different institutions like joint stock commercial banks, corporations, investment companies, trusts, and asset managers. Currently, insurance companies have started to become investors in our funds. In addition to the CEL CMB Multi-strategy Equity Investment Fund, which I mentioned earlier, Everbright Smart Manufacturing Fund, Everbright Overseas Infrastructure Investment Fund, CEL Global Investment Fund, and EBA Investments completed new fundraising projects in the first half of this year.
This is the reason that our fund maintained a 20% growth rate in the first half of 2017. Our senior healthcare fund recently completed its first phase fundraising of RMB 500 million. As you can see from this graph, as of June 30, 2017, the group's total fundraising scale has reached HKD 106.6 billion with 38 actively managed funds, 96 post-investment management projects, and 156 in total if we include principal management projects. Meanwhile, Everbright Prestige Capital Asset Management has reached RMB 104.4 billion. Therefore, the total fundraising scale of these actively managed funds and Everbright Prestige has reached around RMB 220 billion. Among the HKD 100 billion, external funds accounted for 78%, with post-investment management projects spanning a diverse collection of industries. In particular, Everbright Prestige provides a diverse range of products and enjoys a great potential to grow. Second, let's talk about investment.
Over the past few years, investment in the private equity industry has become more challenging, and valuation of high-quality assets has been relatively high. Thus, throughout the investment process, our teams carry out in-depth studies of investment projects while enhancing design and value creation capabilities. In the first half of 2017, we successfully secured investments for quality projects through approaches such as equity, debt, and convertible bonds. During the reporting period, we secured investments from iQIYI, NextEV, Osram, IDG, and other leading companies, further raising the group's profile in a number of different sectors. In the process of doing so, we were never at a disadvantage, even if we often faced direct competition from leading international investment firms. This shows that we are recognized both by investors and leading enterprises.
As you can see in the investment highlights here, in the past four years, our investment has rapidly shifted from traditional sectors to new economy sectors like TMT, consumption upgrade, smart manufacturing, et cetera. It has comprised close to 20%-30% of our total investment capital and reached a considerable scale. In addition to the primary market, we have scaled up the investment capabilities of our secondary market even further. Our flagship fixed income product, Everbright Dynamic Bond Fund, delivered solid performance. The fund has grown to $238 million, achieving a 6.85% return net of fees for regular share class and 10.25% net return for subordinate share class. Meanwhile, the secondary market team continues to work closely with CALC in areas such as the company's accounts and receivable securitization. This is another one of our unique qualities.
I believe that the ongoing development of the primary and secondary market funds will create more synergy for various investments and opportunities for us to cross-sell. Third, we are now moving to post-investment management. Take EBA Investments as an example. As the leading real estate fund in China, EBA Investments emphasized further expanding its AUM and covering more cities. Meanwhile, it paid even more attention to post-investment management. First, it continued its efforts to upgrade, transform, develop, and operate its holding properties to boost rental income and effectively enhance the value of its assets. EBA manages over 1 million square meters of commercial property under its own brand, IMIX, covering 10 IMIX projects in several tier one and tier two cities in China, and rent from its managed properties has continued to rise.
Second, as an asset manager, EBA Investments exports its brand by operating properties owned by other real estate developers in Wuhan, Changsha, and other cities, and charging management fees. Lastly, I would like to talk about divestment, which is the most important element of private equity. During the reporting period, the group successfully exited several mature projects through M&A, bulk transactions, and the open market. For example, the IPO listing of Hengrun Heavy Industries on the Shanghai Stock Exchange and BGI Genomics on the Shenzhen Stock Exchange. Besides, we completed project exits from M&A on non-listed companies. Our performance in the four key elements of the private equity industry, including fundraising, investment, post-investment management, and divestment, has reflected that CEL has showed an increasingly strong management capability in the market.
Now, I would like to share with you some updates on our principal investment business, which is an important part of our direct operating business. As of June 30, 2017, our principal investment business was valued at HKD 22.7 billion. CEL focuses on four areas of capital deployment. Firstly, CEL is well-placed as a fund incubator. By providing initial project reserves from its own capital, CEL is able to establish a fund's investment direction. Secondly, it is direct investing. It provides us more investment options in different industries. Third, it's long-term industry investments such as aircraft leasing, real estate, and elderly care. Take the elderly care industry, for example. There is a great potential for growth. We also hope to secure standard pricing rights in related sectors. Lastly, it is liquidity. Our own capital also optimizes cash flow, balancing the company's long, short, and medium-term allocations.
As you all know, CEL has kept a relatively low debt ratio around 50% in recent years, which provides a better long-term condition for a sustainable operation. I personally object to increasing the income from a radically high debt ratio because it can be hardly called a long-term feasible plan for a company. Last but not least, CALC, which is a key investment of our own capital, has achieved steady and continuous development in the first half of 2017 and gradually transformed into an important participant in the global aviation industry value chain. I would like to invite our CFO, Richard Tang, to give you a financial review for the first half of 2017.
Thank you, Mr. Chen. Thank you to all the media attending our press conference today.
I am going to go through the highlights and key points of CEL's financial performance in the first half of 2017. On the slide, we have already listed out from where our profits are generated and their distribution. The operating income from service, management fee, and dividends was down 13.3% year-on-year to HKD 881 million. Other net income from investment income was down to HKD 1,108 million compared to HKD 1,146 million last year. Profit from operations represents a year-on-year increase of 9.3% to HKD 1,570 million, comparing to HKD 1,436 million last year. CEL posted a profit attributable to shareholders of HKD 1,490 million in the first half of 2017, representing a year-on-year increase of 5.6% comparing to HKD 1,411 million last year. Our profit attributable to shareholders is divided into three areas.
The graph clearly shows that our direct operating business, including fund management and principal investment, delivered strong results, contributing a profit attributable to shareholders of HKD 987 million, up from HKD 570 million last year, and up to 73% year-on-year, which credits to an increasingly mature principal investment and successful exiting from several mature projects. This increase in profit is very significant. Due to the generally lackluster performance of A-share trading, our share of profit from Everbright Securities declined 34% year-on-year to HKD 346 million. As China Everbright Bank lowered its annual dividend payout ratio, the dividend income after tax that it contributed to CEL was down 50% year-on-year to HKD 157 million. Earnings per share is HKD 0.884, increasing 5.6%. Interim dividend per share is HKD 0.25. On slide 18, you can clearly see CEL's line of business from the graph.
We have talked about the business range, angle, and method, which are incomes from fund management business and principal investment. The most important point is the comparison of management business and consultancy fees. We can see the obvious increase of AUM, but income from the fund management business decreased compared to the same period last year, as the fee income earned from managing EBA Real Estate Fund, which was incorporated into the group's partly owned Shanghai Jiabao, could not be directly reflected in the group's financial statements. For reference, if we directly count the fee income into EBA Investments and fund management business, it will represent a year-on-year increase of approximately 70%. In addition, the dividend income from investees was also down and affects the income from fund management business.
Meanwhile, interest income from the provision of structured financing products for clients has significantly increased, up 29%, and interest income of principal investment increased 28%. Another important point is that when this project was exited, it contributed to a considerable capital gain increase. In respect of investment returns, CEL successfully exited several mature projects, realizing a capital gain of HKD 1,111 million, up more than five-fold from the same period last year. When we exit a project, the size of capital gain it can contribute to us is significant. In the second half of this year, one of our focuses will be exiting Focus Media. We can see shareholders' equity percentile is comprised of three parts. China Everbright Bank, Everbright Securities, and China Everbright. China Everbright's direct operating business comprises HKD 16.9 billion alone.
Most attention must be turned to the interest-bearing debt ratio, 53.4%, which is still in safety net. Our quick ratio still stays at 130%. Now we come to slide 20. The financial indicators in this slide show the financial efficiency of CEL. Our return on equity has increased from 7.4% in 2016 to 8.0% this year, excluding 2015, which saw a higher return on asset brought by the buoyant A-share market. We can see an increase of overall business scale and return on asset, which excludes profit and equity related to Everbright Securities and China Everbright Bank. We can see an increase of overall business scale, while return on assets increased from 2.7% to 4.4%, excluding profit equity related to Everbright Securities and China Everbright Bank.
Most important is that with higher gearing ratio, our return on equity increased from 6.7% for the first half of 2016 to 11.6% for the first half of 2017, and the return generated by higher gearing was largely given back to our shareholders. That's the end of my presentation on CEL's financial performance. May I now invite Mr. Chen to share with us the investment outlook and development plans for 2017.
Speaking of financial matters, we can see that CEL's rapid growth in the past few years is credited to our stable investment performance. Frankly speaking, while CEL has divested many projects in a year, we are extending some as well. We are trying to smooth profits in the process. Therefore, despite CEL divesting many projects during a year when banks and securities are not showing good performances, our investments are still performing well.
More importantly, among the many investments CEL has made, very few of them have failed. The high success rate of the investment is the key to our good performance of overall investment income in these years. Looking ahead to the second half of 2017, we can summarize it with four points. First, despite uncertainties, there are general signs of growing optimism in the financial market. Second, Chinese enterprises seeking to invest in overseas assets have shown signs of becoming more rational and are now in a stable development phase. Third, investor demand for diversified multi-currency investment products will still be strong. Fourth, with the diversification of Chinese investment overseas, the financing channel will gradually increase, providing more opportunities for financing. These are some overall insights from us. For the asset management industry, the trend toward differentiation is already underway.
Quality asset managers with proven track records, large-scale management, and strong integrated capabilities stand to benefit from the growing capital and investment opportunities accorded by these developments. Meanwhile, many second and third-tier managers will be weeded out in the process. The differentiation will only grow fiercer. As for CEL, I believe that with our solid track record and asset management competencies, we will continue to grow competitiveness. For our strategic plan of the second half of 2017 as the leading asset management and investment company in China, CEL will continue to strengthen its core competencies of fundraising, investment, management, and divestment in the second half of this year. In terms of the principal investment business, we will continue to build new platforms and invest in projects which have long-term strategic benefits. Finally, and most importantly, this year marks the 20th anniversary of CEL.
Over the past 20 years, CEL has seen a stable and rapid growth. Therefore, we have faith in ourselves for the future, and we are planning for the next five and 10 years. Without your support, our success wouldn't have been possible. I would like to take this opportunity to thank you for your continuous support of CEL. Thank you.