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Public company info - China Environmental Technology and Bioenergy Holdings Limited , 01237.HK
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China Environmental Technology and Bioenergy Holdings Limited, 01237.HK - Company Profile
Chairman Xie Qingmei
Share Issued (share) 784,000,000
Par Currency Hong Kong Dollar
Par Value 0.05
Industry Furniture & Household Goods
Corporate Profile Business Summary: The principal activities of the Group are manufacturing and sales of outdoor wooden products, retail sales of outdoor wooden products through self-operated retail shops a n d manufacturing and sales of renewable energy products. Performance for the year: During the Year, the revenue of the Group amounted to approximately RMB694.0 million, representing a moderate growth of 9.4% as compared with the year ended 31 December 2018. The Group recorded the loss of RMB64.5 million for the Year, representing a significant decrease as compared to the loss of approximately RMB184.9 million recorded for the year ended 31 December 2018. Business Review The Group’s core business segments are comprised of production and sales of wooden products; retail business; and manufacturing and sales of renewable energy products. During the Year, revenue from these three business segments amounted to approximately RMB687.1 million, RMB0.3 million and RMB6.9 million (2018: approximately RMB618.9 million, RMB1.3 million and RMB14.6 million), accounting for 99.0%, 0.0% and 1.0% of the total revenue (2018: 97.5%, 0.2% and 2.3%). Manufacturing and sales of wooden products remains to be the Group’s largest business segment, contributing 99.0% of the Group’s revenue. The revenue derived from such business increased by 11.0%. The overall increase in revenue from this segment is mainly driven by increase in demand from North America and Australasia clients. Global growth momentum moderated further during the Year, and the disruptive impact of US import tariffs on global trade and supply chains continued to exacerbate. The Office of the United States Trade Representative announced further increase in trade tariff imposed on certain China exported goods from 10% to 25% effective May 2019, resulting in the further decline of profit margin of the wooden products exported to the United States by the Group during the Year. The Group’s export business to the United States still accounts for a significant proportion of the Group’s total business volume. Therefore, manufacturing and sales of wooden products segment recorded loss of RMB73.7 million during the Year. The revenue and profit contribution from retail business remains insignificant during the Year, the Group sees this segment as a strategic stepping stone in making into the PRC household product market, and will adapt to new business direction whenever appropriate. The Group’s renewable energy business focuses on the recycling of leftover sawdust from the production of the Group's wooden products into biomass pellet fuel. Against the backdrop of slowing Chinese economy and the fierce domestic competition in the renewable energy market, the Group’s renewable energy business recorded a decrease of 52.7% in revenue to approximately RMB6.9 million during the Year, with its profit down to RMB0.9 million (2018: revenue of RMB14.6 million and profit of RMB2.5 million). Prospects: On 15 January 2020, the first sings of a truce between the US-China trade dispute were seen when two countries finally signed the phase one trade deal. However, the uncertainty remained elevated as the U.S. Department of Commerce announced the initiation of new antidumpling duty and countervailing duty investigations (the “Investigations”) to determine whether wood mouldings and millwork products from Brazil and China are being dumped in the United States, and to determine if producers in China are receiving unfair subsidies on 29 January 2020. Certain of the Group’s wood products exported to the United States were under the scope of such Investigations. Looking ahead, there are multiples external and domestic headwinds facing the Group’s profitability. On the external front, adding headwinds faced by heightened uncertainties and risks arising from the global economic slowdown, the recent coronavirus (COVID-19) outbreak has already brought considerable human suffering and major economic disruption, the Group expects that the adverse on confidence, financial markets and disruption to supply chain will surface during the first half of 2020. The Group sees fragile business and consumer confidence could dampen capital expenditure, as well as building and construction activities in the North American, European and Australasia markets. On the other hand, multiple challenges faced by China, including further economic slowdown, weakened housing market, rising corporate leverage and household debt burden further clouded the Group’s business prospects in the PRC market. With these considerations aforementioned, it is expected that the Group’s profitability will be inevitably affected worldwide, putting tremendous pressure on the returns on assets and inventories. The Group will continue enhance the business resilience by closely monitoring the initiation of new antidumpling duty from the United States and the development of other overseas markets such as Australia, assessing the impact on the Group and identifying necessary and decisive measures in diversifying the business risks ahead.

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