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Public company info - China Huarong Energy Co. Ltd. , 01101.HK
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China Huarong Energy Co. Ltd., 01101.HK - Company Profile
Chairman CHEN Qiang
Share Issued (share) 4,770,000,000
Par Currency Hong Kong Dollar
Par Value 0.5
Industry Commercial Vehicle
Corporate Profile Business Summary: The Group is principally engaged in the businesses of shipbuilding, marine engine building, offshore engineering and engineering machinery focusing on oil and gas related customers and markets. Performance for the year: The Group recorded a revenue of approximately RMB47.7 million for the year ended 31 December 2019 (the “Year”), compared to a revenue of approximately RMB49.0 million for the year ended 31 December 2018 (the “Comparative Year”). Profit attributable to the equity holders of the Company was approximately RMB137.3 million for the Year (Comparative Year: Loss RMB138.4 million). Business Review: Followed by the completion of the disposal of its shipbuilding, offshore engineering, engineering machinery and marine engine building segments in the PRC (the “Shipbuilding and Engineering Businesses”, or the “Discontinued Operations”) in March 2019 (the “Disposal”), the Group has continued to make orderly progress and proceeded with a number of significant achievements during the transition period, including (1) conducted a series of active discussions with lenders on debt restructuring, and (2) retained sustainable and consistent production in its energy exploration and production segment (“Energy Business”). The Group management has also reviewed the underlying operation in the Energy Business, and reset its business strategy and plan with an aim to continue and grow its operation in a sustainable fashion for the long run. Subsequent to the completion of the Disposal, the Group has devoted significant focus on the production and sales of crude oil in the oil exploitation, with the propose of maintaining sustainable production while minimising production cost. The Group will also seek possible development on both upstream production and downstream trading operation to maximise overall group performance through all the possible synergies. Throughout the Year, the Group has continued to focus and explore opportunities and adopted various measures to improve production capabilities and implemented several processes and controls to enhance management efficiency and profitability. These included but not limited to: – Review the capital expenditure tendering process to further reduce development costs. The Group management has explored the possibilities and believes there is a substantial headroom that can be reduced. Subsequent to the process, the Group management has successfully re-negotiated with several suppliers on price reduction, which shall improve the overall return on the Group’s investment and benefit the Group’s financial performance for any development in the future. – Enhance the new oil production technique to increase production volume. The Group has worked with oilfield experts and analysed the production method to improve productivity for the existing and newly developed wells. The Group has proposed new production techniques to local authority and the approval has been granted. It is expected the Group will receive additional economic benefit through the new techniques and further improve the Group’s financial performance. Prospects: While the global economy is being affected by the Sino-US trade war and the spread out of coronavirus, the Group will continue to be cautious and be alert on demand of crude oil and the oil price fluctuation. However, the Group remains optimistic in the oil industry, with the target of extending the drilling activities in the region to further improve production level in the upcoming year. In addition, the Group is exploring the possibility to negotiate with the project partners to improve the co-operation terms, which will bring in significant financial benefit. The Group believes the abovementioned factors, and the implementation of measures on cost reduction and operational efficiency shall increase the return on the assets of the Company. Furthermore, the Group is actively pursuing other related opportunities within the energy industry to broaden the revenue source to ease the sole reliance on the oil exploration, which include, but without limitation to: (1) established a trading company for energy and mining related products during the Year, with the objective of creating a new income stream and improve the Group profit margin. Despite there is no business development since its established, the Group has conducted several feasibility studies and due diligent assessments on the potential opportunities during the Year; and aims to bring in the most appropriate investment to improve the Group performance; and (2) actively pursuing oil and gas related storage and logistic projects which shall vertically expand the Group’s energy business which will provide the Group a platform in a sustainable fashion in the long run. The Group is also continuing to negotiate with lenders in relation to the extension of existing financial obligations of the Group that will require restructuring. The Group remains positive on the progress and the Group is exploring other initiatives to increase the liquidity of the Group including different financing option.

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