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Public company info - Prinx Chengshan Holdings Limited , 01809.HK

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Prinx Chengshan Holdings Limited, 01809.HK - Company Profile
Chairman CHE Hongzhi
Share Issued (share) 636,000,000
Par Currency U.S. Dollar
Par Value 5.0E-5
Industry Automobiles & Components
Corporate Profile Business Summary: The Group is principally engaged in the manufacturing and sales of tire products in the People’s Republic of China (the “PRC”), Thailand, America, Asia and other global markets. Performance for the year: For the year ended December 31, 2020, revenue of the Group amounted to approximately RMB6,283.1 million, representing an increase of approximately RMB694.1 million compared to approximately RMB5,589.0 million for the year ended December 31, 2019. Profit for the year of the Group increased by approximately RMB125.0 million from approximately RMB479.7 million for the year ended December 31, 2019 to approximately RMB604.7 million for the year ended December 31, 2020. For the year ended December 31, 2020, the profit attributable to shareholders of the Company amounted to approximately RMB604.8 million (2019: RMB479.7 million). Business Review: As a leading domestic tire manufacturer in the PRC’s commercial all steel radial tire replacement market, Prinx Chengshan has been engaged in tire design, production and manufacturing for 44 years, adhering to the core strategy of “cost leadership, efficiency driven, competitive differentiation and global operation”. The Group continuously provided high-performance tires embodying Prinx Chengshan’s intelligence and concern to global dealers and Chinese automobile manufacturers to enhance the happiness experience of drivers and passengers. During the Reporting Period, the Group’s overall operations were stable and its performance was in line with expectations. Approximately 15.1 million sets of tires were sold, representing an increase of approximately 22.4% as compared to 2019. Among them, the sales volume of all steel radial tires was approximately 6.4 million sets, representing an increase of approximately 21.6% as compared to 2019; the sales volume of semi-steel radial tires was approximately 8.1 million sets, representing an increase of approximately 27.4% as compared to 2019; and the sales volume of bias tires was approximately 0.6 million sets, representing a decrease of approximately 14.8% as compared to 2019. The annual operating revenue was approximately RMB6,283.1 million, representing a yearon-year increase of approximately 12.4%; the gross profit amounted to approximately RMB1,401.4 million, representing a year-on-year increase of approximately 30.3%. The profit attributable to the owners of the Company for the year ended December 31, 2020 was approximately RMB604.8 million, representing a year-on-year increase of approximately 26.1%. The Group mainly supplies to the replacement markets through distributors. For the year ended December 31, 2020, the operating revenue from the sales to the Group’s domestic and international distributors was approximately RMB1,947.2 million (2019: RMB2,082.2 million) and RMB2,359.9 million (2019: RMB1,874.4 million), respectively, accounting for approximately 31.0% and 37.6% of the total revenue; the operating revenue from the direct sales to automobile manufacturers was approximately RMB1,747.9 million (2019: approximately RMB1,222.3 million), accounting for approximately 27.8% of the total revenue of the Group; and the operating revenue from the sales to private label customers was approximately RMB228.2 million (2019: approximately RMB410.1 million), accounting for approximately 3.6% of the total revenue of the Group. Among them, the sales of all steel radial tires, semi-steel radial tires and bias tires accounted for approximately 75.2%, approximately 22.0% and approximately 2.8% of the total revenue of the Group, respectively. In addition, the innovative sales model, “Zhianda” sales model, became further mature through practice, and will bring new sales growth point. During the Reporting Period, the Group adhered to the core values of “customer-oriented, open innovation, hardworking, and mutual benefit”, and organized and carried out various tasks with the attitude of practicality, openness and aggressiveness. Prospects: Looking forward to 2021, the external environment will be complex and volatile with both opportunities and challenges. With the signing of the Regional Comprehensive Economic Partnership (RCEP) and the Sino-EU Investment Agreement, the export tariffs for tire products are expected to be reduced. The U.S. Department of Commerce imposes lower-than-expected dumping duties on the tires from the countries and regions in Southeast Asian, and the foreign trade environment is expected to improve, and is yet still full of uncertainties. China has become a country with a substantial car population, and the markets for new energy vehicles and other newly emerging vehicles will continue to expand, which will bring about new opportunities for the development of the tire industry. In the uncertain and unpredictable environment, the Group will keep abreast of the development trend of the industry and adopt the following strategies: (I) Initiate the planning of medium and long-term strategies: Formulate medium and long-term strategies to promote the Company’s sustainable and high-quality development with strategies, organization and talents. (II) Keep customer-oriented, and reshape the brand, upgrade products, strengthen OE distribution, penetrate channels, deploy global layout, and digitalize services from a market perspective to achieve sales growth: The domestic commercial vehicle replacement center has achieved a steady increase in market share in the commercial vehicle replacement market by empowering channel distributors and business personnel. The Group will guide the distributors to enhance their awareness of market regulation and provide retailers with guidance on market regulation and sales prices. Meanwhile, the Group will establish a comprehensive truck and bus service center to achieve synergistic services to provide consumers with worry-free experience. The domestic passenger vehicle replacement sales center will take advantage of “Prinx Chengshan’s omni-channel digital sales system” to create a new sales model, optimize product structure to boost sales, increase the number of distributors and active stores, and reinforce the competitiveness of the sales team. The sales team for the domestic OE market will consolidate and increase the share in existing automobile manufacturers, actively expand new models, and focus on promoting the development process of passenger vehicle manufacturers. The Group will enhance the technical exchanges and share resources with automobile manufacturers to achieve sales growth. The international marketing team will focus on the opportunities brought by the gradual resumption of work and production in different markets around the world, and seek more orders from the existing sales network, while exploring new markets, preparing the plans for launching the Prinx brand products for the European market, and deploying the sales network of the Prinx brand worldwide. Under the support of the factory in Thailand, the Group will continue to increase sales in the North American market while consolidating its market share in Southeast Asia. The Group will also refine the regional marketing management across the globe, build sales teams in different regions, and continue to localize sales services. (III) Step up the exploration of new businesses and new models to drive continuous growth: The Group plans to further promote the “Zhianda Model”, expand customer coverage, and explore new markets such as buses; exert greater efforts on the promotion of the “Zhianda Model”, strengthen the cooperation with the platforms in automobile aftermarkets to enrich the IT team, give full play to the competitive advantages in the ownership of proprietary software and information technology, explore new business models on the basis of tire leasing, and look for new profit growth points. (IV) Advance production capacity expansion, and continuously promote lean manufacturing: The Group been advancing the production capacity expansion project of the factory in Shandong and the phase II project of the Tire Production Base in Thailand with an annual production capacity of 1.2 million sets of all steel tires and 4 million sets of semi-steel tires in an orderly manner. The factory in Shandong will continue to strengthen quality management and keep data-driven to improve production efficiency, strengthen technological innovation, promote the construction of a smart factory, continue to promote the scope of environmental management in the factory area, and continue to improve the management efficiency of environmental protection facilities. The Tire Production Base in Thailand will draw on domestic successful experience while taking into consideration the local regulations and cultural characteristics in Thailand and making innovations based on local conditions to formulate standards that suit the Tire Production Base in Thailand. It will also implement talent training plans, improve management system and operating mechanism, strengthen the integration of Chinese and Thai cultures, and enhance team execution. (V) Innovate in R&D: The Group always attaches supreme importance to the building of R&D capacity, adheres to the strategy of innovation-driven development, keeps abreast of the development trend of product technology, and continues to promote the improvement of technologies in product parametric design, performance simulation prediction, green low rolling resistance and high wear resistance. In 2021, the Company will vigorously promote industry-university-institute cooperation and the construction of post-doctoral workstation, make full use of the Group’s internal and external resources, and strengthen the cooperation with universities and colleges in the areas of basic technology research, new material application and development, product digitization and talent training, to continuously improve research and development level, and strengthen the research and development of reserve technologies.

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