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Public company info - Xin Yuan Enterprises Group Limited , 01748.HK
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Xin Yuan Enterprises Group Limited, 01748.HK - Company Profile
Chairman Wang Faqing
Share Issued (share) 440,000,000
Par Currency U.S. Dollar
Par Value 0.01
Industry Marine & Harbour Services
Corporate Profile Business Summary: The Group is principally engaged in vessel owning and chartering services. Performance for the year: For the year ended 31 December 2019, the Group's revenue increased to approximately US$49.8 million by approximately US$7.1 million or 16.6% from approximately US$42.7 million for the year ended 31 December 2018. The Group’s gross profit decreased by approximately US$0.5 million or 3.4%, from approximately US$14.5 million for the year ended 31 December 2018 to approximately US$14.0 million for the year ended 31 December 2019. The Group’s overall gross profit margin dropped from approximately 33.9% for the year ended 31 December 2018 to approximately 28.1% for the year ended 31 December 2019. The Group’s profit for the year decreased by approximately US$0.6 million, or 9.1% to approximately US$6.0 million for the year ended 31 December 2019 as compared to approximately US$6.6 million for the year ended 31 December 2018, while the Group's net profit margin also decreased to approximately 12.0% from approximately 15.5% for the respective years. Business Review During the year ended 31 December 2019, the Group has three operating segments, which included (i) asphalt tanker chartering services; (ii) bulk carrier chartering services; and (iii) asphalt trading. The Group principally provides asphalt tanker chartering services under various types of charter agreements comprising: (i) time charters; and (ii) voyage charters and contracts of Affreightment (“CoAs”). Apart from stabilizing the current asphalt tanker chartering business, the Group is also looking for new development opportunities in the shipping market. In late 2019, the Group acquired two secondhand Capesize vessels, namely XYG Fortune and XYMG Noble, which have been providing bulk carrier time chartering services to the Group's customers. Furthermore, the Group has been developing new asphalt trading business since the first half of 2019. Currently the Group operates a fleet of twelve vessels with total capacity of 470,000 dwt, in which six vessels are operated under asphalt tanker time charters, four vessels are operated under asphalt tanker voyage charters or CoAs, the remaining two secondhand Capesize vessels are operated under bulk carrier time charters. Most of the Group's vessels fleet are operated under time charters, including the two newly acquired secondhand Capesize vessels serving bulk carrier chartering, and are chartered to customers with high performance capabilities on a long-term basis ranging from one to ten years, which generated steady income for the Group. The Group endeavours to provide high quality asphalt tanker chartering services. The Group has its own team of engineers and the Group is actively involved in the design of the Group's vessels. The Group's team works closely with ship design experts, the Group's customers, the shipyards, an international classification society and banks or finance lease companies. The Group formulates customised shipbuilding plan to build new vessel that suits the Group's customers’ requirements such as fuel consumption efficiency and carrying capacity. In light of the fact that the market price of secondhand Capesize vessels was at a historical low point, the Group purchased the secondhand Capesize vessels to explore new business model by providing bulk carrier chartering services and to lock up profit by entering into charter agreements with the Group's customers, so as to combat the risks brought by escalation of trade wars, abrupt tightening of global economic conditions and increasing uncertainties in the global asphalt tanker chartering business. The Group’s major customers include global shipping and logistics groups, global independent energy traders and publicly traded energy companies based in the United States. The Group has diversified the Group's business and services and gradually developed the Group's own customers portfolio. As a result of the Group’s efforts to engage new business and customers, the number of customers increased in the past few years, from thirteen customers for the year ended 31 December 2018 to twenty customers for the year ended 31 December 2019. With the Group’s experienced management team and competitive strengths, the Group's Directors believe that the Group is well-positioned to further develop the Group's presence in the asphalt tanker chartering services market and capture new business opportunities such as bulk carrier time chartering services and asphalt trading. Hence, the Group maintains the variety of services types with a balance approach to meet different demands in the market. Asphalt is a necessity for infrastructure construction, especially for road construction and maintenance. With the “One Belt One Road” project and the expansion of the global road network, the demand for asphalt has steadily increased. In addition, current lower level bunker price will save costs and improve energy efficiency, which is favorable to the Group's voyage charter services. The Group will continue to focus on high standard of maintenance of the Group's fleet to offer quality and safe asphalt tanker chartering services, and asphalt trading business is another focus of the Group's business development. The Group is cautiously optimistic on the asphalt market in near future. Statistically, the bulk cargo carriers have a stake of about 40% in the international shipping sector. During the year, the Group achieved another milestone to extend the Group's business into dry bulk shipping market by purchasing two secondhand Capesize vessels. Upon delivery of the vessels, the Group had locked up profit by entering into charter agreements with the reputable customers on a long-term basis at a reasonable hire rate. The Group expects positive growth prospect of the bulk carrier market in the future. During the year, the trade protectionism initiated by the government of the USA and the sanctions imposed against Iran and Venezuela have created uncertainties to the global and regional trade. With the signing of first stage agreement in trade negotiations between governments of China and the USA on 15 January 2020, the Group's Directors have faith in the prospect of the global chartering industry, but remains mindful of the uncertainties ahead brought by the Sino-US trade war and the sanctions against Iran and Venezuela. Prospects: The outbreak of the novel coronavirus (“COVID-19”) at the end of 2019 has had a certain impact on the economic growth of China and the world. Since late January 2020, the COVID-19 epidemic in Mainland China caused temporary economic activities halt for a short period of time, but such epidemic situation in China is gradually being controlled and alleviated. However since late February 2020, there is a tendency for COVID-19 to spread outside China; and up to 11 March 2020, the World Health Organisation announced that COVID-19 can be characterized as a pandemic. As there is great uncertainty over the spread of the epidemic, it is difficult for us to predict the degree of impact on the Group's chartering services at this stage. The Group has been closely tracking the impact of the COVID-19 epidemic on the shipping industry. The management has adopted various measures to safeguard the health of employees and has complied with all local government’s related regulations.

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