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Public company info - China Wood Optimization (Holding) Ltd. , 01885.HK
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China Wood Optimization (Holding) Ltd., 01885.HK - Company Profile
Chairman Yim Tsun
Share Issued (share) 1,000,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Forestry & Timber
Corporate Profile Business Summary: The principal activities of the Group are the processing, production and sale of wooden products and rendering of wood processing procedure service. Performance for the year: Revenue reached about RMB211.7 million (2018: RMB247.6 million), representing a decrease of about 14.5% from last year; Profit for the year amounted to about RMB70.1 million (2018: RMB69.6 million), representing an increase of about 0.7% from last year; Basic and diluted earnings per share for the year based on weighted average number of ordinary shares of 976,151,000 shares (2018: 1,000,000,000 shares) in issue was RMB7.2 cents (2018: RMB7.0 cents); Business Review The Group’s revenue decreased by about RMB35.9 million or 14.5% from about RMB247.6 million for the year ended 31 December 2018 to about RMB211.7 million for the year ended 31 December 2019. The decrease in revenue was mainly attributable to the decrease in sales of previous years’ stock of less-shaved Processed Wood Panels with higher unit selling price. Since certain customers were able to purchase adequate raw poplar wood panels for the Group to conduct its Wood Processing Procedure, the demand on previous year’s stock of less-shaved Processed Wood Panels was reduced. As a consequence, revenue from the sale of less-shaved Processed Wood Panels decreased, however, revenue from rendering of Wood Processing Procedure Service increased. Less-shaved Processed Wood Panels Revenue from sales of less-shaved Processed Wood Panels decreased by about RMB62.0 million, or 66.7% from about RMB92.9 million in 2018 to about RMB30.9 million in 2019. The decrease was primarily due to certain customers were able to purchase adequate raw poplar wood panels for the Group to conduct its Wood Processing Procedure and therefore they reduced in the demand of the Group’s previous years’ stock of less-shaved Processed Wood Panels. It resulted in the decrease in revenue from sales of less-shaved Processed Wood Panels. The sales volume of less-shaved Processed Wood Panels also decreased by about 16,605m3 from about 25,735m3 for the year ended 31 December 2018 to about 9,130m3 for the year ended 31 December 2019. The average selling price of less-shaved Processed Wood Panels decreased from about RMB3,611/m3 for the year ended 31 December 2018 to about RMB3,387/m3 for the year ended 31 December 2019. The decrease was mainly attributable to the sales promotion of less-shaved Processed Wood Panels offered to the existing customers for celebrating the resumption of production of the Handan Factory in the second half of 2019. Rendering of Wood Processing Procedure Service The Group’s impregnation fluid and Wood Processing Procedure are its core technologies which are difficult to replicate in a short time. Through providing Wood Processing Procedure Service, the Group can reveal its intrinsic value and enjoy a higher gross profit margin from the service than that of less-shaved Processed Wood Panels. Therefore, the Group enhanced its effort to render Wood Processing Procedure Service to customers who can carry out purchase raw wood panels, and can choose to conduct the drying, shaving and cutting by themselves or elsewhere at a lower cost than the Group during the year ended 31 December 2019. The customers provide their raw wood panels to the Group and the Group charged an average processing fee of about RMB1,938 per ton of the impregnation fluid consumed during the Wood Processing Procedure for the year ended 31 December 2019, as compared to the average processing fee of about RMB1,893 per ton for the year ended 31 December 2018. As discussed under the paragraph headed “Revenue” above, since certain customers were able to purchase adequate raw poplar wood panels for the Group to conduct its Wood Processing Procedure, they reduced in the demand of the Group’s previous years’ stock of less-shaved Processed Wood Panels. As a result, revenue derived from rendering of Wood Processing Procedure Service increased by about RMB26.0 million or 16.8% from about RMB154.7 million for the year ended 31 December 2018 to about RMB180.7 million for the year ended 31 December 2019. Prospects: The Group will continue to increase market recognition of its less-shaved Processed Wood Panels and focus on providing Wood Processing Procedure Service to customers in the PRC. To those ends, the Group will hire more research and development specialists to strengthen its expertise and know-how on developing impregnation fluids and Wood Processing Procedure. By focusing on rendering its Wood Processing Procedure Service, the Group will be able to yield a higher gross profit margin with its core technologies. In addition, the Group will be able to reduce the need for production facilities and make full use of its processing capacity.

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