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Public company info - Chuan Holdings Limited , 01420.HK
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Chuan Holdings Limited, 01420.HK - Company Profile
Chairman Phang Yew Kiat
Share Issued (share) 1,036,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Construction & Decoration
Corporate Profile Business Summary: The Group carries on the business of provision of earthworks to the construction industry in Singapore, The Group has also provided general construction works including A&A works and the construction of new buildings. Performance for the year: The overall revenue of the Group decreased to approximately S$77.7 million from approximately S$93.5 million in 2018, representing a decline of approximately 16.9%. Gross profit decreased to approximately S$5.9 million for the year ended 31 December 2019 , representing an approximate 31.9% decrease from approximately S$8.7 million for the year ended 31 December 2018. Gross profit margin was approximately 7.7% for the year ended 31 December 2019 (31 December 2018: approximately 9.3%). The Group recorded a profit for the year of approximately S$1.0 million (31 December 2018: approximately S$3.1 million). Meanwhile, net profit margin was approximately 1.3% for the Year (31 December 2018: approximately 3.3%). Business Review Earthworks and ancillary services Earthworks and ancillary services business continued to be the key revenue generator of the Group, contributing approximately S$67.6 million (31 December 2018: approximately S$76.8 million) in segmental revenue, which represented a year-on-year decrease of approximately 12.0% and accounted for approximately 87.1% of the Group’s total revenue. During the Year, the Group stepped up its efforts in reallocating more resources on tenders and strategically targeting public infrastructure projects with relatively higher profitability but lower risks. Reflecting its favourable market position and strategic tendering approach, the Group successfully secured 30 new projects with a total contract value of approximately S$141.8 million during the year, including the Tuas Water Reclamation Plant and design and construction of North-South Corridor Tunnel in this segment. With continued endeavours to boost operational capacity, the Group acquired more machineries totalling approximately S$6.8 million during the Year. Notwithstanding, owing to the increased consumption of diesel arising from the additional machineries and the rise in diesel price, the cost for diesel consumption increased by approximately 4.4% to approximately S$7.1 million, and segmental profit consequently decreased to approximately S$6.3 million during the reporting year. As at 31 December 2019, the Group had a total of 91 ongoing earthworks and ancillary services projects. It has also secured 7 new projects since 1 January 2020. General construction works The general construction works segment generated approximately S$10.0 million (31 December 2018: approximately S$16.6 million) in revenue, accounting for approximately 12.9% of the Group’s total revenue. Due to fierce market competition, the Group’s aggressive pricing strategy exerted downward pressure on the segment performance. This segment recorded a loss amounting to approximately S$36,000 for the year (31 December 2018: profit of approximately S$0.7 million). The Group continued to tender sizable projects so as to bolster its business. As at 31 December 2019, the Group secured 3 new general construction works projects with a total contract value of approximately S$41.0 million. In respect of ongoing projects, the Group is presently conducting 7 projects, including the additions and alterations to existing Stamford and Admiralty Substations, as well as other upgrading projects by the Housing and Development Board. Prospects: Global economic growth is expected to remain sluggish. After slashing this year’s projected global growth by 0.1 percentage point to 3.3% in January 2020, the International Monetary Fund (IMF) now warns that the growth will be slower than the 2.9% rate in 2019. Although certain risks have partially receded with the announcement of the U.S.-China Phase I trade deal and the lower likelihood of a no-deal Brexit, the possible emergence of further trade tensions and the outbreak of novel coronavirus disease (COVID-19) since the beginning of 2020 present additional challenges to the recovery of global economy. In Singapore, the Ministry of Trade and Industry (MTI) further downgraded its economic growth forecast to between –0.5% and 1.5% in 2020, given that the COVID-19 outbreak is likely to dampen the economic outlook at different levels. In the building sector, the virus outbreak has exacerbated the existing manpower crunch particularly to construction players who are heavily dependent on Chinese workers and caused possible project delays. The Group, however, with strong and diverse base of foreign workers from other Asian countries and effective scheduling plan, managed to keep projects on track during this critical time. Precautionary measures have also been taken by offering protective gears such as face masks, hand sanitisers and thermometer to employees on and off sites for better prevention. Temperature screening and travel and health declarations are required for all visitors entering office building and sites. Despite the economic headwinds and global uncertainties, the Group expects that the construction demand will continue to hold steady in near term. The Building and Construction Authority (BCA) projects construction demand in 2020 range from S$28 billion to S$33 billion, mainly led by public infrastructure megaprojects such as Changi Airport Terminal 5, Jurong Region MRT Line and Cross Island Line (CRL), developments of Jurong Lake District and public housing projects; as well as projects from private sector such as the continued redevelopment of en-bloc residential sites, berth facilities at Jurong Port and Tanjong Pagar Terminal, recreational developments at Mandai Park and Changi Airport new taxiway and so on. To catch the demand momentum, the Group will continue to cautiously identify suitable projects and adopt strategic tendering approach with a stronger focus on infrastructure projects. The Group will strive with great exertion to complete the upgrading of contractor grade from level B1 to A2 and continue to focus on promising operations, including the possibility of working with other reputable companies on tendering for new projects with higher contract value. Constant bolstering of business operations is also essential for realising growth. As an industry veteran, the Group will continue to develop and expand its principal business activities, earthworks and ancillary services and general construction work. In order to enhance the performance of earthworks and ancillary services segment, the Group has diverted considerable resources to replenish advanced equipment, and recruit and retain talents for the Group’s near to long-term development. In addition, the Group will continue to strengthen its close partnership with clients and suppliers, complete projects with professionalism and ingenuity, and maintain its renowned, highest level of integrity in the business.

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