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Public company info - DIT Group Limited , 00726.HK
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DIT Group Limited, 00726.HK - Company Profile
Chairman Liu Weixing
Share Issued (share) 2,802,000,000
Par Currency Hong Kong Dollar
Par Value 0.4
Industry Construction Materials
Corporate Profile Business Summary: The Group was principally engaged in prefabricated construction work, granting licenses and sales of equipment in the People’s Republic of China (the “PRC”). Performance for the year: The revenue of the Group increased by approximately 56.5% from approximately HK$695.9 million for the year ended 31 December 2019 to approximately HK$1,089.3 million for the year ended 31 December 2020. Business Review： 2020 is the first fiscal year since DIT Group joined the big family of Central China, during which the Group achieved substantial business expansion and entered a period of explosive profit growth. As a leading provider of overall smart building solutions, the Group has been adhering to the “technology-led” development strategy, thereby pushing forward its business and greatly improving its operating efficiency: For the year ended 31 December 2020, the Group recorded sales revenue of HK$1.089 billion, a year-on-year increase of 56.5%; and net profit attributable to the parent company was HK$159 million, a year-on-year increase of 43.4%. With a view of the above, the outbreak of COVID-19 had minimal impact on the Group’s business and operations during the year ended 31 December 2020. 1. Skyrocketing of annual sales by 72% and signing of several strategic agreements The Group’s business expanded rapidly during the period, benefiting from the strengthening market demand driven by accelerated implementation of policies supporting the prefabricated construction industry across China and the completion and commissioning of six green building technology parks. In 2020, the prefabricated construction business grew rapidly. The annual production reached 307,000 cubic metres, an increase of 66% from 185,000 cubic metres in 2019; and shipment volume amounted to 314,000 cubic metres, an increase of 72% from 183,000 cubic metres in 2019. In 2020, the Group signed strategic cooperation agreements with many reputable companies including JD Group, Jinke Property Group, Sunriver Holding Group and Jujiang Construction Group to create synergy, further expand business segments, and deepen its presence in China so as to consolidate business advantages of the entire industry chain and lay a steady foundation of purchase orders pipeline for business in 2021. 2. Accelerated deployment in industrial parks and great improvement in the production capacity and operating efficiency of plants In 2020, six green building technology parks were built and put into production in Zhoukou City and Tongxu County in Henan Province, Jiaozhou City in Shandong Province, Huai’an City and Nantong City in Jiangsu Province, and Yuxi City in Yunnan Province; and the Group expanded its presence to five green building technology parks in Dengfeng City, Zhumadian City, Luoyang City and Tongxu County in Henan Province and Ding’an County in Hainan Province. Currently, the Group has put into operation 15 industrial parks nationwide, making it a leading player in the industry in terms of industrial layout. As of the end of 2020, the Group’s overall production capacity was approximately 1.1 million cubic metres (including wholly owned, franchised, and asset-light plants). The utilisation rate of production capacity increased from 29% in 2019 to 46% in 2020. Newly added production capacity in Zhoukou City, Henan Province and Jiaozhou City, Shandong Province had been accelerated for operation during the year, contributing to the overall business; and production capacity in Yuxi City, Yunnan Province, Huai’an City and Nantong City in Jiangsu Province and Tongxu County in Henan Province will be gradually released in 2021. In addition, the Group continues to focus on product standardisation and equipment automation to help plants quickly increase production capacity. The Group has a strong brand awareness and its product quality is widely recognised by downstream customers, which helps the Group to further expand its franchised and asset-light business. During the year, the Group’s exploration for asset-light business achieved initial results. Revenue from technology licensing and consulting services increased by 151.5% year-on-year to HK$94.92 million throughout the year. The Group has achieved initial results in cost reduction through standardised production products, digitalisation, and intelligent upgrading. In 2020, the actual cost for prefabricated construction was RMB2,115 cubic metres, a year-on-year decrease of 8.7%. The Group has built an EMPC system for cost control throughout the process from scratch and established three-level management and control standards with “Target Costs” as the core, building up a cost control system. The Group launched an intelligent mould placement robot in some smart prefabricated construction plants. This robot is the first intelligent robot in China that can support complex components with reinforcing bars and reduce mould placement labour by 75% and increase mould placement efficiency by 2.5 times. Meanwhile, an environmental-friendly automatic cleaning device for prefabricated construction mould, the first of its kind in China, was successfully launched at the production line. This device worked with the intelligent mould placement robot to further advance the automation of the mould placement and disassembly process in smart prefabricated construction plants. In terms of digitisation, the Group is currently building a digital middle platform system. The new middle platform system will not only connect various systems together through cloud computing, big data, Internet of Things, AI and 5G, but also achieve intelligent design, manufacturing and operation and maintenance based on building information modelling (BIM) data generated during design. 3. Expansion of business across the entire industry chain and initial results of synergistic efforts with Central China Group In the fiercely competitive prefabricated construction market, the Group adopts a new business model covering the entire industry chain to create differentiated competitive advantages. The Group has been long committed to improving the quality of buildings, reducing the cost of prefabricated buildings, and exploring a faster and better industrial development path for prefabricated buildings. It firmly believes that the vertically integrated business model can help reduce costs in all aspects and further exploit cost advantages. During the year, the Group has created a business layout covering prefabricated construction components, decoration, landscape, and equipment, and the newly added smart landscaping services and smart decoration businesses will soon become the Group’s profit growth drivers. Relying on the positive branding of Central China Group deeply rooted in Henan Province, DIT Group has made a lot of explorations with various sectors of its subsidiaries. Guided by the vision of “Developing Brilliant Living”, DIT Group is positioned as a leading provider of overall smart building solutions. It has support from Central China Real Estate and Central China Management Company who rank among the top ten in China in terms of construction area and house delivery and sees a large number of potential home improvement opportunities brought by Central China New Life whose property management area exceeds 100 million square metres. With the support of Central China Group, DIT Group has spared no effort to expand its production capacity in Henan Province. In 2020, it has successfully deployed five green building technology parks in Henan Province. 4. Strong alignment of interests between the Group and its shareholders In July 2020, the Group received an investment of approximately HK$303 million from controlling shareholder Mr. Wu Po Sum for increased shareholding. In December, the Group received more than HK$1.6 million from Mr. Liu Weixing, the chairman of the board of directors and executive director of the Company, and Mr. Guo Weiqiang, executive director and chief executive officer for increased shareholding and share purchases. In addition, the Group adopted a share option scheme in July, granting a total of approximately 202 million share options to its executives and others. This move will promote the alignment of the interests of employees with the overall interests of the Company and shareholders, arouse the enthusiasm of grantees, and effectively retain and motivate core talent, thereby advancing the long-term, steady development of DIT Group. Prospects: As a leading provider of overall smart building solutions, the Group’s operating performance will enter a phase of unprecedented growth in the next few years. As the construction industry is still facing increasingly severe labour shortages and environmental protection challenges and local governments encourage the spread of prefabricated construction to improve efficiency and protect the environment, the market size of the prefabricated construction industry will continue to grow rapidly. The Group will continue to strengthen its presence across the entire industry chain in key markets and intensify its efforts in creating industrial synergy with Central China Group, cutting costs and improving efficiency to drive overall profits. 1. Deepening business layout and expanding the market size Since 2020, China’s Ministry of Housing and Urban-Rural Development (MOHURD), National Development and Reform Commission (NDRC), Ministry of Industry and Information Technology (MIIT) and other ministries have rolled out a number of relevant supportive policies. Meanwhile, Shanghai, Henan, Anhui, Jiangsu, Zhejiang and other provinces and municipalities have also released relevant supportive policies in terms of prefabricated construction development goals, land use, plot ratio incentives, financial subsidies and guidance on consumption. Policies at various levels all support the vigorous development of prefabricated buildings. As the country vigorously promotes the modernisation process of the construction industry, the rapid growth of the prefabricated construction market has become an industry consensus. Therefore, the market demand for prefabricated construction components will continue to increase. According to the latest notification from MOHURD on the development of prefabricated buildings nationwide in 2020, the newly constructed prefabricated buildings nationwide reached 630 million square meters in 2020, an increase of 50% as compared with 2019, accounting for approximately 20.5% of the area of newly built buildings. More than 15% of the target set in the 13th Five-Year Plan had been accomplished, which was much lower than the government’s penetration rate target of 30% for 2025. It is expected that, with the support of policies, the prefabricated construction industry will maintain rapid growth within three to five years, and the future market potential is enormous. Prefabricated construction will soon usher in a period of rapid development. In the future, the Group will increase its presence in key areas such as the Greater Bay Area, Yangtze River Delta, Beijing-Tianjin-Hebei and Henan Province, seize industry development opportunities, and strive to provide consumers with a safer, more comfortable and smarter living experience, so as to contribute to the modernisation of China’s new urbanisation and construction industry. 2. Creating a new business model covering the entire industry chain DIT Group is committed to becoming a leading provider of overall smart building solutions. In 2020, it announced a new “Smart Home” strategy to create an innovative industry chain-wide collaboration model. It is committed to making technological innovation in the entire industry chain such as smart houses to help promote the development of the prefabricated construction industry. Professional abilities across the entire industry chain are the core advantages of the Group. The Group has the world’s leading six core technology systems, strong R&D and innovation capabilities, and extensive experience in external technical cooperation, covering the fields of smart buildings including BIM, Internet of Things, big data and artificial intelligence. With technological advantages of the whole industry chain, the Group has gradually expanded its business to include landscaping services and decoration businesses. In the future, the Group plans to develop a business model covering the entire industry chain into a “turnkey” business model. The business will cover the entire life cycle of prefabricated construction including design, smart prefabricated manufacturing, landscaping services and decoration. 3. Collaborating with Central China Group to focus on Great Central China and create synergy The Group will actively coordinate with various business sectors of Central China Group. Under the overall coordination of Central China Group’s Great Central China’s strategy**,The Group will focus on the Great Central China*, and leverage the advantages of Central China Group in the wider industrial chain, create synergy, and build a new win-win model. In terms of Central China Real Estate,The Group will implement the “industry + real estate” model, promote the development of commercial and residential land, and reduce plant investment costs by acquiring related commercial and residential land. As for Central China Management Company,The Group will explore the “industry + real estate” cooperation model outside Henan Province and reach a cooperation agreement with Central China Management Company to promote business in asset-light projects. The Group also cooperates with Central China New Life based on the “Smart Home” strategy to develop businesses such as home improvement and construction of data middle platform to provide in-depth services for products such as smart communities, smart buildings, and smart homes. The Group will work with the education sector of Central China Group to deliver training to industrial workers through cooperation. In the next three years, DIT Group will train 100,000 industrial workers. In the future, the Group will develop collaborative projects with Central China Group. In addition,The Group will also focus on expanding cooperation with third-party customers, includingThe Group’s major customers such as real estate developers and builders.The Group will continue to work with Central China Group for business, regional, industrial chain, and design collaboration to accelerate the national business buildout, explore new projects, and achieve new business growth. 4. Developing a technological foundation and empowering the Group with innovation and technology The Group will consolidate its technological foundation, bring down its costs with leading R&D and design, and promote BIM data through a digital middle platform for smart design, manufacturing and operation and maintenance. It will also implement the strategy of “Smart Home” to create an innovative industry chain-wide collaboration model, improve the quality of buildings, reduce the cost of prefabricated buildings, and explore a faster and better industrial development path for prefabricated buildings. The building of the digital middle platform will allow DIT Group to quickly develop different solutions to meet customer needs and figure out corresponding costs during bidding and make adjustment based on customer needs. This will make market development much easier, visualise costs and bring them under control. As the number of projects undertaken increases, data inThe Group’s data middle platform continues to accumulate and diversify. More and more new businesses will keep emerging in the future.

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