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Public company info - Tianjin Development Holdings Ltd. , 00882.HK
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Tianjin Development Holdings Ltd., 00882.HK - Company Profile
Chairman ZHANG Bingjun
Share Issued (share) 1,073,000,000
Par Currency
Par Value 0.0
Industry Conglomerates
Corporate Profile Business Summary: The Group is principally engaged in (i) utilities including supply of electricity, water and heat and thermal power; (ii) pharmaceutical including manufacture and sale of chemical drugs, and research and development of new medicine technology and new products, as well as design, manufacture and printing for pharmaceutical packaging and sale of other paper-based packaging materials; (iii) hotel; (iv) electrical and mechanical including the manufacture and sale of presses, mechanical and hydroelectric equipment and large scale pump units; and (v) strategic and other investments including investments accounted for using the equity method which are principally engaged in the manufacture and sale of elevators and escalators and provision of port services in Tianjin, the People’s Republic of China (the “PRC”). Performance for the year: The audited consolidated profit attributable to shareholders of Tianjin Development Holdings Limited for the year ended 31 December 2019 was approximately HK$461.4 million, as compared to HK$471.9 million of last year. Business Review Utilities The Group’s utility businesses are mainly operated in the TEDA through supplying electricity, water, heat and thermal power to industrial, commercial and residential customers. TEDA, located at the centre of Bohai economic rim and also at the intersection of Beijing-Tianjin-Hebei metropolitan regions, is a national development zone and an ideal place for manufacturing and R&D developments. TEDA plays a leading role over the past three decades in Tianjin’s economic development. Electricity In December 2018, pursuant to an absorption and merger agreement dated 6 December 2018 entered into between Tianjin TEDA Tsinlien Electric Power Co., Ltd. (“Electricity Company”) and Tianjin TEDA Electric Power Co., Ltd. (天津泰達電力有限公司) (“TEDA Power”), TEDA Power absorbed and merged with Electricity Company while TEDA Power was the surviving company upon completion of the merger and assumed all the assets, liabilities and business operations of Electricity Company which was subsequently dissolved and deregistered (the “Merger”). Upon the completion of Merger on 22 April 2019, TEDA Power was owned as to approximately 47.09% and 52.91% respectively by the Group and Tianjin TEDA Investment Holding Co., Ltd. (天津泰達投資控股有限公司), and became an investment accounted for using the equity method of the Group thereafter. As a result of the Merger, the Group recognised a gain, together with the result from Electricity Company up to the date of Merger, amounted in aggregate to approximately HK$134.6 million, which has been disclosed and presented as profit from Electricity Business in the Group’s consolidated statement of profit or loss. TEDA Power is principally engaged in supply of electricity in TEDA. It also provides services in relation to construction of electricity supply network, application of technology related to new energy and renewable energy, electricity construction and related technical services. Currently, the installed transmission capacity of TEDA Power is approximately 946,000 kVA. TEDA Power contributed to the Group a profit of approximately HK$14.4 million and the total quantity of electricity sold for the year was approximately 3,161,046,000 kWh. Water Tianjin TEDA Tsinlien Water Supply Co., Ltd. (“Water Company”) is principally engaged in supply of tap water in TEDA. It also provides services in installation and maintenance of water pipes, technical consultancy, retail and wholesale of water pipes and related parts. The daily water supply capacity of the Water Company is approximately 425,000 tonnes (2018: 425,000 tonnes). In 2019, revenue from the Water Company was approximately HK$349.6 million, a decrease of 8% from HK$380.5 million last year. The Water Company recorded a profit of approximately HK$5 million, a decrease of HK$18.6 million from HK$23.6 million in 2018. This was mainly attributable to decrease in government supplemental income and lower operating margins driven by the increase in operating costs outstripped the tariff improvement. The total quantity of water sold for the year was approximately 54,824,000 tonnes, representing a decrease of 0.7% over last year. Heat and Thermal Power Tianjin TEDA Tsinlien Heat & Power Co., Ltd. (“Heat & Power Company”) is principally engaged in distribution of steam and heat for industrial, commercial and residential customers within TEDA. The Heat & Power Company has steam transmission pipelines of approximately 462 kilometres (2018: 462 kilometres) and more than 120 processing stations (2018: 120 processing stations) in TEDA. The daily distribution capacity is approximately 30,000 tonnes of steam. In 2019, the Heat and Power Company reported revenue of approximately HK$1,063 million, broadly maintained at the same level of previous year. Profit from the Heat and Power Company was approximately HK$50.8 million, an increase of 11.6% from HK$45.5 million in 2018. The increase in profit was primarily due to increase in government supplemental income and higher volumes of steam sold, partially offset by the increase in average steam purchase cost during the year. The total quantity of steam sold for the year was approximately 3,641,000 tonnes, representing an increase of 3.2% over last year. Pharmaceutical Pharmaceutical segment is principally engaged in the production and sale of chemical drugs as well as design, manufacture and printing for pharmaceutical packaging in the PRC, and also participates in the business of research and development of new medicine technology and new products through its 35% equity interest in Tianjin Institute of Pharmaceutical Research Co., Ltd. (天津藥物研究院有限公司) (“Research Institute”). In 2019, revenue from pharmaceutical segment was approximately HK$1,903.4 million, a decline of 26.1% from HK$2,574.8 million last year. Of the total segment revenue, revenue from sale of pharmaceutical products was approximately HK$1,791.6 million, a decrease of 24% from HK$2,357.2 million in 2018. Revenue from sale of packaging materials amounted to approximately HK$111.8 million, an increase of 13.8% from HK$98.2 million last year. The decrease in revenue was primarily due to the absence of revenue of Research Institute from sale of pharmaceutical products and provisions of research and development services as well as other pharmaceutical related operations following the completion of the disposal of part of equity interest in Research Institute in October 2018 (the “Disposal”). If not taking into account the revenue of Research Institute for the corresponding year in 2018, revenue from pharmaceutical segment increased by approximately 3.5%. Profit from pharmaceutical segment decreased from HK$851.2 million last year to approximately HK$228 million mainly due to the absence of the gain of HK$622.3 million on Disposal in 2018. Stripping out the Disposal gain in 2018, profit from pharmaceutical segment broadly maintained at the same level of last year. This segment result was primarily attributable to higher gross profit on both sale of pharmaceutical products and packaging materials business, completely offset by higher operating expenses. During the year, the revenue of Research Institute amounted to approximately HK$1,034.3 million and contributed to the Group a loss (after non-controlling interests) of approximately HK$4.4 million. Hotel Courtyard by Marriott Hong Kong (“Courtyard Hotel”), situated in a prime location on the Hong Kong Island, is a 4-star hotel with 245 guest rooms. It is positioned as an ideal lodge for business and leisure travellers. In 2019, revenue from Courtyard Hotel of approximately HK$105.8 million was 17.1% below that of the previous year. Against the backdrop of tourism slowdown in Hong Kong, profit from Courtyard Hotel decreased by HK$14.7 million to approximately HK$13.7 million for the year 2019. The average room rate was under pressure and the average occupancy rate was approximately 81.7%, a decline as compared to 91.2% in 2018. Electrical and Mechanical Electrical and mechanical segment is principally engaged in the manufacture and sale of presses, mechanical and hydroelectric equipment as well as large scale pump units in the PRC. In 2019, revenue from electrical and mechanical segment was approximately HK$1,127.3 million, representing a decrease of 9.5% over last year. Loss from electrical and mechanical segment was approximately HK$106.5 million compared to HK$138.7 million in last year. Stripping out the gain of HK$50.7 million on additional compensation for plant relocation and impairment loss of HK$58.9 million on property, plant and equipment made in relation to hydroelectric equipment business, the loss would have been approximately HK$98.3 million, compared to a loss of HK$145.6 million on a like-for-like basis. The segment loss stemmed from lower revenue due to slowdown in the sector and lower operating margins in hydraulic press business. On 30 March 2020, Tianjin Tai Kang Investment Co., Ltd. (天津泰康投資有限公司) (“Tianjin Tai Kang”), a non-wholly owned subsidiary of the Company, intends to dispose of its entire equity interest in Tianjin Tianfa Heavy Machinery & Hydro Power Equipment Manufacture Co., Ltd. (天津市天發重型水電設備製造有限公司) and to assign the related shareholder’s loan by Tianjin Tai Kang by way of public listing-for-sale process on the Tianjin Property Rights Exchange Centre (天津產權交易中心) in accordance with the relevant requirements governing the transfer of state-owned assets of enterprise in the PRC (“Potential Disposal”). The initial bidding price for the Potential Disposal is RMB158,681,800 (equivalent to approximately HK$176,528,869), of which, equity interest amounts to RMB8,681,800 and the related shareholder’s loan amounts to RMB150,000,000. The final consideration for the Potential Disposal will depend on the final bid price to be offered by the successful bidder in the public listing-for-sale process. Tianjin Tai Kang will enter into a formal agreement with the successful bidder following completion of the public listing-for-sale process. As at the date of the Group’s audited consolidated financial statements was authorised for issue by the Board of Directors of the Company, Tianjin Tai Kang has not entered into any formal agreement regarding the Potential Disposal. Details of the Potential Disposal was disclosed in the Company’s announcement dated 27 March 2020. Strategic and Other Investments Port Services As at 31 December 2019, the Group has 21% equity interest in Tianjin Port Development Holdings Limited (“Tianjin Port”) (stock code: 3382). Tianjin Port is engaged in the provision of port services including container and cargo handling services, sales and other port ancillary services in Tianjin, the PRC. As set out in the respective announcements published by Tianjin Port dated 12 February 2020 and 24 March 2020, Tianjin Port Coke Terminals Co., Ltd. (天津港焦炭碼頭有限公司), a wholly-owned subsidiary of Tianjin Port Holdings Co., Ltd. (天津港股份有限公司) (whose shares are listed on the Shanghai Stock Exchange (600717.SH) and is indirectly owned as to approximately 56.81% by Tianjin Port), occurred an incident of suspected embezzlement of funds. Tianjin Port has engaged an independent forensic expert to carry out the independent forensic investigation on this incident and other related matter. During the year, the revenue of Tianjin Port decreased by 5% to approximately HK$15,077.4 million and profit attributable to owners of Tianjin Port was approximately HK$389.2 million. Tianjin Port contributed to the Group a profit of approximately HK$81.7 million, representing a decline of 9.5% over last year. The Group carried out an impairment assessment for its equity interest in Tianjin Port and no impairment loss has been recognised in the consolidated income statement for the year (2018: recognised impairment loss HK$300 million). Elevators and Escalators As at 31 December 2019, the Group has 16.55% equity interest in Otis Elevator (China) Investment Company Limited (“Otis China”). Otis China is engaged in the manufacture and sale of elevators and escalators in the PRC. During the year, the revenue of Otis China amounted to approximately HK$19,007 million, representing a decrease of 0.8% compared with last year. Otis China contributed to the Group a profit (after non-controlling interests) of approximately HK$219 million, representing an increase of 9.4% over 2018. Investment in Binhai Investment Company Limited As at 31 December 2019, the Group has 4.69% interest in Binhai Investment Company Limited (“Binhai Investment”) (stock code: 2886) and on that date, the market value of the Group’s interest in Binhai Investment was approximately HK$80.4 million (2018: approximately HK$68.9 million) and the unrealised fair value gain of approximately HK$11.5 million (2018: a loss of approximately HK$26.8 million) was recognised in other comprehensive expense. Investment in Tasly Holding Group Co., Ltd. As at 31 December 2019, the Group had 12.15% equity interest in Tasly Holding Group Co., Ltd. (天士力控股集團有限公司) (“Tasly Holding”), a non-core passive investment in relation to the Group’s pharmaceutical segment which was acquired indirectly from the controlling shareholder in 2015 by using merger accounting and is now held by Tianjin Central Pharmaceutical Co., Ltd. (天津市中央藥業有限公司), a wholly-owned subsidiary of Tianjin Lisheng Pharmaceutical Co., Ltd. (天津力生製藥有限公司). Tasly Holding is a conglomerate established under the laws of the PRC on 30 March 2000 and its principal asset includes the holding of 683,481,524 A shares in Tasly Pharmaceutical Group Co., Ltd. (天士力醫藥集團股份有限公司) (“Tasly Pharmaceutical”), representing approximately 45.18% of its total issued A shares. Tasly Pharmaceutical is principally engaged in the research and development, manufacturing and distribution of pharmaceutical products in the PRC. At the date of initial application of the Hong Kong Financial Reporting Standard 9 — Financial Instruments on 1 January 2018, the carrying amount of investment in Tasly Holding was HK$191.5 million and was reclassified from available-for-sale financial assets to equity instruments at fair value through other comprehensive income. As at 31 December 2019, the fair value of investment in Tasly Holding was approximately HK$1,473.4 million (31 December 2018: HK$1,908.8 million), accounting for approximately 6.5% of the Group’s total assets, and on that date the fair value loss together with the exchange effect amounted to approximately HK$435.4 million has been recognised in other comprehensive income. During the year, the Group’s dividend income from Tasly Holding for the year ended 31 December 2018 was approximately HK$13.8 million (2018: HK$14 million). The holding of 12.15% equity interest in Tasly Holding is not held for trading and not expected to be sold in the foreseeable future. Prospects: In 2020, the worldwide spread of the novel coronavirus epidemic is impacting the global economic and social macro environments to an unprecedentedly significant extent. Financial and commodities markets will be volatile. Trade protectionism is intensifying, and the external environment will be encountering increasing instability and uncertainty. China’s epidemic prevention and control measures have initially achieved positive results and the resumption of work and production has been carried out in an orderly manner. As the internal and external economic conditions remain severe and complex, the economic development of China will face relatively great pressure in the short term. However, with the gradual implementation of various economic measures, it is believed that the resilience and potentials of China’s economy will provide an impetus for its stable economic development. With the diversification of state-owned enterprises equity and mixed-ownership reform continuing to deepen, Tianjin Municipal People’s Government are through its state-owned capital operation platform giving an impetus to the ongoing shift in driving forces for economic development and the optimisation of industrial structure as well as the increase in operational efficiency of state-owned enterprises. The position and advantages of Tianjin Tsinlien Investment Holdings Co., Ltd. (天津津聯投資控股有限公司), a controlling shareholder of the Company and also a cross-border state-owned capital operating company under the Tianjin Municipal People’s Government, increasingly manifest itself. Having successfully launched the marketisation of management team selection and recruitment process and smoothly embarked on the research and formulation of development plan for a new era, it will continue to move forward with various reform and economic development in Tianjin City. The Company will actively involve in the reform and promotion of a new era of high-quality development in Tianjin City by leveraging the business platform of its controlling shareholder. Meanwhile, the Company will also proactively implement the strategy-driven and innovation-driven development plan so as to seize the new development opportunities ahead. In addition, the Company will stick closely to its prudent financial discipline and strive to maintain a steady and sustainable business development to meet the challenges in the future.

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