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Public company info - Dragon Crown Group Holdings Ltd. , 00935.HK
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Dragon Crown Group Holdings Ltd., 00935.HK - Company Profile
Chairman NG Wai Man
Share Issued (share) 1,221,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Warehousing & Logistic Services
Corporate Profile Business Summary: The Group is principally engaged in terminal storage and handling of liquid chemicals. Performance for the year: For the year ended 31 December 2019, the revenue of the Group decreased by 12.4% from HK$262.5 million in 2018 to HK$229.8 million. For the year ended 31 December 2019, the gross profit of the Group decreased by 21.3% from HK$143.9 million in 2018 to HK$113.2 million. Business Review: Dragon Crown is one of China’s leading storage and integrated terminal service providers that specialized in the handling and storage of liquid petrochemical products, operating a total of three terminals that are located in Nanjing, Ningbo and Weifang. Strategically situated in two of the major petrochemical industry hubs of China, the Group has set up jetties and tank farms (together, the “Terminals”) along the coastal area to seize the rising demand from the petroleum and chemical industries. Dragon Crown offers a high quality and comprehensive range of liquid petrochemical terminal and storage services to customers through its own jetties, storage tanks and dedicated pipelines. During the year ended 31 December 2019, the throughput volume of liquid petrochemical products handled by the Group’s Nanjing, Ningbo and Weifang terminals reached 1,529,000 metric tonnes, 379,000 metric tonnes and 4,877,000 metric tonnes, respectively (2018: 1,542,000 metric tonnes, 339,000 metric tonnes and 5,730,000 metric tonnes, respectively), with a combined throughput volume of 6,785,000 metric tonnes (2018: 7,611,000 metric tonnes). The main source of the Group’s revenue and profit is derived from its flagship terminal, situated in the Nanjing Jiangbei New Materials High-tech Park. The Group’s major customer, Celanese Corporation (NYSE: CE), a world leading producer of acetyl products, is also situated in the same high-tech park, contributed HK$198.7 million (2018: HK$217.4 million) in revenue to the Group, which is equivalent to 86.5% (2018: 82.8%) of the total revenue during the year. The business operation in Nanjing continues to contribute stable revenue as we have established long term relationship with our customers. The opening of Weifang Port to foreign vessels signified a new chapter for the Bohai Economic Basin as well as North-east Asia as it acts as a logistic hub in the region. With the obvious geographical and logistic advantage of Weifang Port to oil refineries and chemical production plants located within its 300km radius, Weifang Liquid Terminal allows the entrance of vessels with higher Dead Weight Tonnage so as to effectively control customers’ costs. The Phase I and II Project of the Bulk Liquid Terminal at the West Operation Zone, Central Port Area of Weifang Port have already commenced operation. In order to cohere with the business development of the Group and better utilize the Group’s resources, the Group will appropriately adjust the construction progress of the Phase III Project according to the industry environment and the Group’s business need. The Group regards Weifang Liquid Terminal as an important cornerstone for the long term development of the Group and expects the operation scale and profitability of Weifang Liquid Terminal will be enhanced after the completion of the construction of Phase III. In addition, the completion and operation of the surrounding railways in 2019 will definitely enhance the flexibility and reliability of the terminal, as well as more convenience for customers in the future. The Group regards Weifang Liquid Terminal as a significant milestone for our business development. The operation and development of Weifang Liquid Terminal will be beneficial to the profit of the Group in the future and will consolidate the superior position of Dragon Crown in China’s liquid petrochemical industry. Dragon Crown is in a strong financial position as at 31 December 2019, with total assets of HK$1,339.9 million (2018: HK$1,341.4 million) and total equity of HK$1,076.0 million (2018: HK$1,103.9 million). As at 31 December 2019, the Group has cash on hand of HK$243.2 million (2018: HK$194.9 million) and in a net cash position. Such a healthy financial backup ensures the Group’s sustainability. Prospects: Although the development of the US-Sino trade war and the outbreak of coronavirus disease (COVID-19) are becoming more uncertain, the Group is prudently optimistic about the prospects of the industry and layout of the business. Looking ahead, with the opening of Weifang Port to foreign vessels, the Group is granted the opportunity to explore new market through business expansion while ensuring the development of its core business. The Group plans to continue enhancing its business development in the coastal regions of China, particularly along the Yangtze River Delta and Bohai Bay regions, so as to further expand Dragon Crown’s domestic and even international market. As Weifang Liquid Terminal Phase I and II commenced operation, and the development of Phase III will further enhance the scale of the terminal in the future, the Group will be more capable to capture the market demand in North-eastern China and North-eastern Asia. The Group believes in the great business potential in the region and is confident that the Group can maintain its leading role in the new market with the help of Weifang Liquid Terminal. Together with the construction of Weifang Liquid Terminal Phase III, it will become the largest terminal of the Group, with total storage capacity of over 660,000 m3. Several potential customers are in negotiation for renting the tank capacity in Phase III already. In addition, the construction of different railways and transportation network around Weifang Liquid Terminal will further strengthen our advantage in developing a remarkable role in the industry. With advanced operations and a highly experienced management team at the helm, Dragon Crown is set to consolidate its superior position as a storage and integrated terminal service provider in China. Despite all the upcoming challenges, the Group will remain committed to achieving better financial results and delivering greater value to its shareholders.

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