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Public company info - Xinghua Port Holdings Ltd. , 01990.HK
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Xinghua Port Holdings Ltd., 01990.HK - Company Profile
Chairman Chen Hong
Share Issued (share) 814,000,000
Par Currency
Par Value 0.0
Industry Marine & Harbour Services
Corporate Profile Business Summary: The group is principally engaged in the operations of two ports and the related services. Performance for the year: Profit before tax increased by 47.0% from RMB79.4 million for FY2018 to RMB116.7 million for the Year.The Group’s net profit increased by 61.9% from RMB51.7 million in FY2018 to RMB83.8 million for the Year. Business Review Given the relatively stable Chinese economy in 2019 and the trade flow of the cargo mix, the Group handled a cargo volume of 9.3 million tonnes, a drop of 3.7% from 2018 mainly due to lower logs cargo volume handled as a result of the change in cargo mix. As such, the Group’s revenue also decreased by 1.7% to RMB397.1 million for the Year. However, the net profit of the Group increased by 61.9% for the Year mainly due to an increase in other income and gains, an increase in the share of profits of associates and lower overall costs. The Group continued to reap benefits on strong import pulp and paper cargo into China and handled 2.5% higher pulp and paper cargo tonnages in FY2019 to 4.8 million tonnes, which was about 17.5% of China’s market share. The number of containers handled increased by 16.3% to 116,237 TEUs. The lower containers handled in 2018 was due to two quay cranes that had undergone major maintenance in the second quarter of 2018. Handling of export project equipment cargo decreased by 32.3% to 324,745 cubic metres as the ports were constrained by smaller open stacking yard for storage due to the construction of the two new warehouses which was completed only in December 2019 and the upgrade of the fire system of eight warehouses to meet new fire regulation for storage of pulp and paper cargo. Handling of other general cargoes increased by 10.4% to 0.26 million tonnes mainly due to an increase in the handling of cargo in the bags like sodium sulfate and fertiliser. The volume of steel cargo handled decreased by 1.6% to 1.6 million tonnes as overall China export steel cargo plunged by 7.3%. The Group maintained about 2.5% of China’s market share for such cargo type. The handling of logs cargo reduced to 0.6 million cubic metres, a drop of 48.1%, even though New Zealand logs imported into China is estimated to be higher at about 17.0 million cubic metres. This was largely due to a change in the focus of cargo mix since 2018. As of 31 December 2019, the Group had cash and cash equivalents amounting to RMB141.7 million (31 December 2018: RMB105.1 million), representing an increase of RMB36.6 million, and the Group’s bank borrowings was increased to RMB581.1 million from RMB579.4 million as at 31 December 2018, excluding lease liability. The increase in loans was due to the partial drawdown of the new loans for the construction of the two new warehouses. Prospects: The outbreak of the CoVID-19 in China in December 2019 and its spread have cast uncertainties to the already slower Chinese economy due to the on-going phase two China-US trade negotiations after the conclusion of phase one trade agreement in January 2020. The Management expects the sentiment of the domestic economy to continue to be difficult due to the lock-down of many Chinese cities since the beginning of 2020. However, the Chinese government has announced its plans to pump in more liquidity into the banking system to help businesses’ cash flows and the Changshu local government is also expected to launch initiatives to help businesses. The Group will work closely with the Group's bankers and the Changshu local government to explore the initiatives and assistance. One of the immediate initiatives is the waiver of three of the five pension funds contributions from February to June 2020 to help the Group’s cash flow. The Management will focus on the Group’s cash flow management as accounts receivable collection is expected to slow down due to the outbreak of the COVID-19. The Group expects to continue the current strategy of focusing on pulp and paper cargo, project equipment cargo, steel cargo and containers. The Group would endeavour to improve the Group's current market shares or at least to maintain current market shares. The demand for imported pulp is expected to continue to grow steadily in China, in particular, the lifestyle papers. The Group is well-positioned to handle more pulp and paper cargo as the Group has more than 20 years’ experience in handling this type of cargo. The Group has 16 approved fire-rated warehouses of a total area of about 160,000 square metres for the storage of pulp and paper cargo. If necessary, the Group has a huge stacking yard area for storage of pulp and paper cargo if cargo turnover slows down or volume surges. The Group has been aligning its strategy in handling the export of project equipment cargo with China’s BRI, which is currently on its sixth anniversary. The Group believes that the project equipment cargo from BRI is a sustainable cargo. The Group expects the import of containers to dip as auto industry production is expected to slow down. Containers carrying auto parts importing into China is also expected to reduce. The Group expects the export steel cargo volume to be lower because the steel mills in Hubei province, the PRC, are operating at lower capacity at least for the first half of the year. Global demand for steel is expected to weaken due to the impact of COVID-19 on the global economy. The Group also expects the import of logs cargo to be flat as the Group only handles a small quantity due to change in cargo mix. Volume of other general cargo, which the Group handles on a regular basis, is expected to remain steady, thus providing a healthy base load to the ports to enjoy a healthy berth utilisation. The Group will continue to review and manage its cargo mix to ensure sustainable growth in cargo volume and revenue and to tap into higher-margin markets. The Group will also continue with its integrated logistics hub-andspoke strategy for its core cargo to attract new customers and retain existing customers. The Group will continue to review its management team and enhance its internal training to better equip its employees with knowledge in port operations and safety awareness.

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