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Public company info - Hebei Yichen Industrial Group Corporation Limited-H shares , 01596.HK
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Hebei Yichen Industrial Group Corporation Limited-H shares, 01596.HK - Company Profile
Chairman Zhang Haijun
Share Issued (share) 224,000,000
Par Currency Renminbi
Par Value 0.5
Industry Industrial Goods
Corporate Profile Business Summary: The Group principally engaged in manufacturing and sale of rail fastening system products and flux cored wire products. Performance for the year: For the year ended 31 December 2019, the revenue of the Group amounted to approximately RMB1,138,676,000, representing an increase of approximately 2.45% over the same period of last year; the net profit attributable to equity holders of the Company amounted to approximately RMB196,723,000, representing an increase of approximately 19.39% over the same period of last year; and earnings per share amounted to approximately RMB0.22. Business Review The Group is a leading rail fastening system product provider in the PRC, with its major business focused on three segments, including (1) rail fastening system products; (2) flux cored wire products; and (3) railway sleeper products. In 2019, the total revenue of the Group amounted to approximately RMB1,138.7 million, representing an increase of approximately 2.4%. Rail Fastening System Products For the year ended 31 December 2019, the revenue from rail fastening system products amounted to approximately RMB878.1 million, representing approximately 77.1% of the Group’s total revenue, and a decrease of approximately 5.4% over the revenue of approximately RMB927.9 million from this segment last year. This was mainly because there were uncertainties in the construction progress of new major customers, who did not request for larger shipments in 2019, resulting in a decrease in sales of rail fastening system products. The sales of the year were generally positive. During the year under review, the cost of sales relating to rail fastening system products decreased by approximately 5.7% from approximately RMB572.6 million (restated) in 2018 to approximately RMB540.2 million in 2019, which was mainly attributable to the decrease in the sales volume ratio of rail fastening system products, causing a corresponding decrease in cost of sales. Affected by the decrease in sales volume, the gross profit of rail fastening system products decreased from approximately RMB355.3 million (restated) in 2018 to approximately RMB337.9 million in 2019. However, the gross profit margin slightly increased from approximately 38.3% (restated) in 2018 to approximately 38.5% in 2019. During the year under review, the initial value of entering into agreements on supplying of rail fastening systems by the Group was approximately RMB1,171.4 million, representing an increase of approximately 2.3% as compared to 2018. Of the amount, the initial value of entering into agreements on supplying high-speed rail fastening systems amounted to approximately RMB648.7 million, representing an increase of approximately 7% as compared to 2018; the initial value of entering into agreements on supplying urban transit fastening systems amounted to approximately RMB423.8 million, representing an increase of 16.6% as compared to 2018; the initial value of entering into agreements on supplying heavy-haul rail fastening systems amounted to approximately RMB0.2 million; and the initial value of entering into agreements on supplying normal-speed rail fastening systems amounted to RMB98.7 million. As of 31 December 2019, the backlog of the Group amounted to approximately RMB1,348.8 million (value-added tax included). Under the support of national railway network development plans such as the “13th Five-Year Plan” and the “Mid-to-Long Term Plan of Railway Network”, it is expected that there will be growth in the Group’s revenue from sales of rail fastening systems. Flux Cored Wire Products For the year ended 31 December 2019, the revenue from flux cored wire products amounted to approximately RMB200.8 million, accounting for approximately 17.6% of total revenue of the Group and an increase of approximately RMB31.3 million from approximately RMB169.5 million in 2018. The change in revenue was mainly attributable to the increase in demand due to better performance in the welding materials industry during the year under review. During the year under review, the cost of sales from flux cored wire products increased by approximately 15.5% to approximately RMB175.5 million in 2019 from approximately RMB152.0 million (restated) in 2018, which was mainly attributable to the increase in the sales volume of flux cored wire products for the year. The Group’s revenue from flux cored wire products was mainly generated from the sales to shipbuilding companies and trading companies operating in the shipbuilding industry. The Group expects to continue to collaborate with its existing major customers, and expects that such customers will continue to contribute to a significant portion of revenue of flux cored wire products in the future. Railway Sleeper Products For the year ended 31 December 2019, revenue from railway sleeper products was approximately RMB46.4 million, accounting for approximately 4.1% of the Group’s total revenue; the cost of sales incurred by railway sleeper products was approximately RMB24.6 million. Railway sleeper products constitute a new product category for the period, with no such products sold in the previous year. Prospects: 2020 is the last year of the “13th Five-year Plan” and the “Mid-to-Long Term Plan of Railway Network”. China continues to make steady progress with railway construction. As pointed out by the National Development and Reform Commission (NDRC), in 2020, China will proceed with its planning and construction of Sichuan-Tibet Railway, accelerate the “Eight Vertical and Eight Horizontal” backbone high-speed railway projects and the railway construction in Central and Western China, optimize intercity railway and urban (suburban) railway network construction in key city clusters and megalopolises such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Guangdong-Hong Kong-Macau Greater Bay Area, promote the “last kilometer” project constructions such as auxiliary projects for hubs and special railway lines. In addition, efforts will be made to optimize the existing layout of passenger and cargo transport hubs and facilitate the interconnectivity with surrounding areas, so that railways can play a better role in ensuring economic and social development, which remains the long-term goal of railway network construction. At the same time, the first executive meeting of the Chinese State Council in 2020 proposed to vigorously develop advanced manufacturing, by introducing policies to support investment in new infrastructure such as information networks, which covers intercity high-speed railways and intercity railway transit. This is expected to further open up the market of urban railway transit. Looking ahead, the Company, as a leading rail fastening system provider in the PRC, will continue to grasp market opportunities from the accelerated development of high-speed railway and urban rail transit in recent years, insist on the innovation and optimization of products and services, and provide high-quality rail fastening system products to the construction of Sichuan-Tibet Railway, the “Eight Vertical and Eight Horizontal” high-speed railways as well as urban rail transit in city clusters such as the Beijing-Tianjin-Hebei region and the Yangtze River Delta. In terms of business development, the Company will keep consolidating its leading role in the rail fastening system market, and leverage on advanced technologies, high-quality products and rich experience to continuously increase market share. We will also keep on consolidating and optimizing the production and sales business of Xingtai Juneng giving full play to the synergistic effects of railway fastening business and railway sleeper business. Meanwhile, the Company will proactively expand the customer base of flux cored wire, facilitate diversified business development, deliver sustainable growth in various operations, and improve the Company’s profitability.

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