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Public company info - FDG Electric Vehicles Ltd. , 00729.HK
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FDG Electric Vehicles Ltd., 00729.HK - Company Profile
Chairman -
Share Issued (share) 2,505,000,000
Par Currency Hong Kong Dollar
Par Value 0.2
Industry Automobiles & Components
Corporate Profile Business Summary: The main businesses of the Group in the reporting year are as follows: (a)the vehicle design and electric vehicle production segment includes the vehicle design and the research and development, manufacture and sales of electric vehicles; (b)the electric vehicle leasing segment represents the provision of leasing services of electric vehicles under both operating lease and finance lease terms; (c)the battery materials production segment, which includes the research and development, manufacture and sales of cathode materials for nickel-cobalt-manganese lithium-ion batteries and lithium ferrous phosphate batteries, and the provision of processing services; and (d)the direct investments segment represents various investment activities, including loan financing, securities trading and asset investment. Performance for the year: During the year under review, the Group’s revenue significantly decreased by approximately 64.1% to approximately HK$345.6 million as compared with the revenue of approximately HK$961.6 million of the last financial year. The Group’s gross profit decreased to approximately HK$26.7 million of the current financial year from approximately HK$112.6 million of the last financial year, representing a substantial decrease of approximately HK$85.9 million. The overall gross profit ratio was at approximately 7.7% of the current financial year as compared with approximately 11.7% of the last financial year, representing a decrease of approximately 4.0%. The Group has decreased its loss for the year to approximately HK$3,007.4 million from approximately HK$3,067.1 million of the last financial year. The Group recorded a loss attributable to owners of the Company of approximately HK$1,989.7 million, a decrease of approximately HK$240.7 million, comparing with approximately HK$2,230.4 million of the last financial year. BUSINESS REVIEW FDG has been focusing on developing its core electric commercial vehicle business and actively exploring the overseas market so as to further increase the market share of FDG in the electric commercial vehicle sector. In addition, FDG has been committed to investing, researching and developing EVs, enabling the electric commercial vehicles of the Company to further reduce carbon emission and reducing the overall cost of ownership for fleet operators. FKL, an indirect non-wholly-owned subsidiary of the Company, is mainly engaged in research and development, manufacturing and trading of cathode materials for lithium-ion (“Li-ion”) batteries and direct investments, including securities trading, loan financing and asset investment. Affected by macroeconomic factors, the investment sentiment tended to be more prudent and the market competition for NEVs has intensified, resulting in more challenges for NEV industry. The downward adjustment of NEV subsidies in stages and the tightening of subsidy standards by the Chinese Government have extended the expected time for subsidies to be received and resulted in narrowed profits, prolonged trade receivables and decreased cash flow of the Group during the year under review, thus affecting the Group’s capital turnover and the original business operation plan. In addition, the successive maturity of bank loans and other borrowings as well as convertible bonds has resulted in an increase in the Group’s current liabilities. The Group will continue to negotiate with banks or lenders to renew the successively maturing loans so as to increase the Group’s current working capital and meet the Group’s financial needs. Furthermore, during the year under review, the Group recorded significant impairment of non-current assets and a decrease in loans and other receivables, resulting in net liabilities of the Group. The management of the Group will closely monitor the overall liabilities and regularly review the Group’s operating costs and scheduled repayments of the loans so as to obtain financing for business development when appropriate. According to the data of the United States Environmental Protection Agency, emission of greenhouse gases by the transportation sector in the US accounted for approximately 28% of the national emission of greenhouse gases in the US, among which, about 23% was attributable to greenhouse gases emitted by medium and heavy goods vehicles. In conjunction with proactive actions taken by enterprises to shoulder environmental responsibilities and the efforts of various governments in promoting energy conservation and carbon reduction and tightening waste gas emission standards, the domestic and international fleet operators, such as Ryder Vehicle Purchasing, LLC (“Ryder”) and Federal Express Corporation (“FedEx”), have successively purchased EVs to enhance operating efficiency and minimize the adverse environmental impact and hence achieve the goal of sustainable development. Besides, since both the charging costs and maintenance costs of EVs are lower than that of traditional ICE vehicles, the low total cost of ownership is also one of the factors for domestic and international fleet operators to consider when purchasing EVs. FDG believes that with the implementation of various environmental and subsidy policies by various governments, and the gradual improvement of charging infrastructure for EVs, the EV market will continue to grow rapidly in the future and more opportunities and capitals will be brought into the EV market. For the financial year ended 31 March 2019, the Group recorded a revenue of approximately HK$346 million, down by 64% from the last corresponding period. Among which, the revenue from EV business was approximately HK$227 million, down by 69% from the last corresponding period; and the revenue from cathode material business amounted to approximately HK$112 million, down by 49% when compared to that from the last corresponding period. The loss attributable to owners of the Company was approximately HK$2.0 billion, and the loss per share was HK$8.35 cents. Looking forward, the Group will, without compromise of the quality and safety standards of its products, rigorously manage its finance costs and develop and expand the business of the Group in a pragmatic manner to enhance the Group’s overall competitiveness. Electric Vehicle Business Since 2018, affected by the impact of policy regarding reduction of subsidy of the NEV and the extension of the expected time for subsidies to be received in China, the revenue of FDG’s EV business decreased by 69% year-on-year, resulting in the decreased cash flow of the Group and hence affected the Group’s original business operation plan. As such, the management of the Group has developed a strategic plan, pursuant to which the Group consolidated its businesses, streamlined the Group’s structure and executed financing plans when appropriate with a view to developing the EV business, the most promising business of the Group. Furthermore, through years of investment, research and development, the Company’s electric commercial vehicles are the most competitive products in the industry and FDG’s electric commercial vehicles not only reduced carbon emission, but also assisted its fleet operators in realising the goal of sustainable development and reducing their total cost of ownership. During the year under review, the Company proactively expanded the US market and established a partnership with Ryder and established customers such as FedEx through Chanje, FDG’s subsidiary, and entered into orders with the two companies last year. Based on the orders from existing and potential customers and the reduction of production costs due to mass production, it is expected that the Group’s EV business will generate positive cash flows to the Group in the future. Ryder ordered Chanje pure electric commercial vehicles with a total contract sum of not less than US$100,000,000 During the year under review, Ryder has placed an order for Chanje pure electric commercial vehicles which will be leased to FedEx, with a total contract sum of not less than US$100,000,000. Ryder is a world-leading service provider of global transportation and supply chain management engaged in fleets management solutions and supply chain solutions business. By establishing an exclusive sales channel and EV service supply partnership with Ryder, Ryder can provide Chanje with a maintenance network covering the US, thus enabling Chanje to lower its operating cost effectively and enhance competitiveness of the company. FedEx introduced 1,000 units of Chanje pure electric commercial vehicles FDG has been proactively exploring the overseas market. During the year under review, FedEx, a blue-chip customer, announced an introduction of 1,000 units of Chanje V8100 pure electric logistics vehicles last November to expand its fleets. The customised pure electric commercial vehicles with a maximum cargo capacity of approximately 6,000 pounds will be operated by FedEx Express for the provision of commercial and residential pick-up and delivery services in California, the US. A fully charged EV can travel more than 150 miles, which help FedEx to save 2,000 gallons of fuel while avoiding 20 tonnes of emissions per each Chanje pure electric commercial vehicles each year. Changjiang Automobile displayed six pure electric commercial vehicles in 2018 Beijing Auto Show Hangzhou Changjiang Automobile Co., Ltd., a subsidiary of FDG, displayed six pure electric commercial vehicles of the Company in 2018 Beijing International Automotive Exhibition. During the exhibition, FDG displayed its star product, the pure electric commercial vehicle model V08S, which was exported to the US in bulk quantities. These pure electric commercial vehicles were manufactured in accordance with US’s technological standard and already passed the test of the US government and granted with full US homologations. In addition, these pure electric commercial vehicles have been adopted by freight service companies in the US for delivering goods. FDG will continue to produce high-end electric commercial vehicles by adopting the international standard, while continuously expanding into local and overseas niche segments, thereby consolidating FDG’s competitiveness in the electric commercial vehicle sector and differentiating itself from its competitions. Cathode Material Business During the year under review, the FKL Group’s production lines for processing ternary products were operating at almost full capacity and recorded sales volume of over 4,110 tonnes and revenue of approximately HK$112 million during the year under review, representing a decrease of approximately 49% as compared with the last corresponding period. Such decrease was mainly due to the change of business model from sales of cathode material to provision of processing service on cathode material to new customer from the second half of the year under review. It is expected that the future revenues of the Group may continue to be affected if the Group continues to operate in the business of provision of processing services in the future. In March 2018, the FKL Group entered into an agreement with a customer, whereby the customer engaged the FKL Group to process and produce ternary products with its A1, A2, A3 and A4 production lines during the period from 26 March 2018 to 31 December 2018. Following the completion of construction of the new production lines A5 and A6 of the FKLGroup in December last year, along with its official commencement of production, the FKL Group entered into a new agreement with such customer on 2 January 2019. The customer further engaged the FKL Group to process and produce ternary products with its six production lines until 31 December of this year. The existing six production lines were operating at almost full capacity and will provide a stable source of income for the Group. In order to enhance the competitiveness of the FKL Group’s product, the FKL Group will definitely continue to optimise product quality by enhancing the energy density and performance of its product, so as to align with the development of the cathode material and battery market and to meet customers’ demand. Besides, Advanced Lithium Electrochemistry (Cayman) Co., Ltd. (“ALEEES”), the Group’s associate which operates in Taiwan, will continue to focus on the core business of Lithium-IronPhosphate (LFP) cathode materials. Meanwhile, it will actively expand its business in both domestic and overseas markets and develop the high-tier energy storage market with a view to increasing the revenue of the Group. Prospects: During the year under review, affected by the changes in subsidy policy for NEVs, the Chinese government has reduced the subsidies for NEVs in stages and tightened the subsidy standards and hence extended the expected time for subsidies to be received, which have exerted downward pressure on the NEV, power battery and cathode material markets in China. However, it is expected that with rising public awareness of environmental protection, the proactive actions taken by enterprises to shoulder environmental responsibilities and the efforts of various governments in tightening waste gas emission standards and accelerating establishment and improvement of charging infrastructure for EVs, the global sales volume of NEV will sustain its growth momentum. Looking forward, FDG will continue to focus on developing the pure electric commercial vehicle market and actively exploring and expanding overseas market, thereby diversifying the competitive edges of the Company. At the same time, FDG will reposition its businesses so as to reduce its reliance on government subsidies.

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