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Public company info - Greenway Mining Group Limited , 02133.HK

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Greenway Mining Group Limited, 02133.HK - Company Profile
Chairman Pan Junhong
Share Issued (share) 447,000,000
Par Currency Hong Kong Dollar
Par Value 1.0E-4
Industry Nonferrous Metal
Corporate Profile Business Summary: The Group was principally engaged in mining, ore processing, the sale of lead-silver concentrates and zinc-silver concentrates and trading of commodities. Performance for the year: During the year, the Group’s revenue was RMB109.5 million (2018: RMB195.0 million). Business Review In 2019, the global tensions intensified and the trade disputes erupt frequently. Against such a circumstance of increasingly complicated international relations and tense regional geopolitics, the market was hit by anti risk sentiment. With the escalating friction in Sino-US trade, the domestic economic growth in the PRC slowed down with significant downward pressure on its economic development. As a result, the domestic end-user demand for lead and zinc in the PRC declined gradually, with the selling prices of these metals remained at a low level. The selling price for zinc had rallied before dropping to a low level, while the lead price dropped steadily as the processing costs for lead concentrates kept growing. As compared with the previous year, the selling prices of these metals volatiled with a weakening trend, as the industry was under increasing pressure to undergo structural adjustments. On the supply side, the integration of resources and the excess capacity reduction policy promulgated by the government further amplified the industrial concentration for lead production industry. As the green upgrading of old capacities was completed and newly added capacities were released in a concentrated manner, the supply pressure gradually built up, and the domestic lead concentrate processing costs increased steadily, which led to a continual decrease in supply of raw lead concentrates in the PRC. In addition, the domestic market’s reliance on overseas supply of lead concentrates further increased, while the production cost of recycled lead concentrates decreased as a result of the continual decrease in the price of waste batteries, being the main raw material for making recycled lead concentrates. All these driving forces boost the production of recycled lead concentrates, as the production proportion of recycled lead grew compared with 2018. Overall, the lead market had a sufficient supply in 2019, and the selling price for lead was consequently under pressure. On the demand side, the supply of raw lead ores was abundant during the year, with the distributors mostly depleting their inventories and the downstream consumption remained weak. On the end-users consumption side, although the sales of automotive picked up momentum during the year, the market of consumer goods as a whole only showed limited improvement. Moreover, the declining investment in the domestic manufacturing industry, the saturated markets of infrastructures, real estate and major appliance, and the continued soften demand for lead-acid batteries due to the development of the new energy industry all led to a lowering demand side and a weak lead price. The government continued to tighten policies on lead-acid batteries due to more stringent environmental issues, imposing stricter standards on the industry. The industry of lead-acid batteries thus entered into a reshuffling process with the strongest survived. As a result, the lead battery industry further centralised on those qualified top players, with some of the small and medium enterprises being eliminated. The market further centred around those top players, and thus the Group’s customer groups further concentrated on those top players that were further growing. Although this had no significant impact on the sales of the Group’s products as a whole, the Group’s bargaining power in various aspects of sale was undermined. In view of the above factors, the selling prices of the Group’s major products, namely lead and zinc concentrates, fluctuated downwards in 2019. Notwithstanding such prices rallied in the middle of 2019, the average selling prices for the year recorded a decrease as compared with 2018, which created great pressures and obstacles to the development of the Group. In addition, benefiting from the economic reforms and the influx of foreign capital, the economy of Myanmar, where the Group’s major mines are located, grew rapidly. The mutually beneficial and friendly relationship between China and Myanmar has provided the Group with a good foundation of an external environment for its investment in Myanmar, which is beneficial to the Group’s sustained and stable business development in Myanmar. During the year, China continued to steadily promote the Belt and Road Initiative, and the construction of the China-Myanmar Economic Corridor and the China-ASEAN industrial cooperation were further strengthened. All these have given momentum to the sustainable development of the two countries. The China-Myanmar relationship has continued to flourish steadily in recent years, with their comprehensive strategic cooperative partnership continuing to deepen. For instance, China being Myanmar’s biggest trading partner, the economic and trade cooperation between the two countries has gone from strength to strength in recent years, as shown by the bilateral trade volumes between them that have continued to rise annually. As consumption demand continues to diminish and the environmental protection requirements of mines are becoming more stringent, it is necessary and inevitable for the future development of the lead and zinc industry (and for the long-term growth of lead and zinc production enterprises) to undergo structural adjustments, transformation and upgrading as well as green development. The Group will seize the opportunity of the transformation of the international environment and the close cooperation between China and Myanmar, and continue to shift resources and focus to Myanmar, which has more cost advantages and more development prospects. BUSINESS OVERVIEW Under the cyclical fluctuations of lead and zinc prices and weak markets as well as the adverse effects caused by the gradual tightening of the environmental protection measures, inspection and rectification policies and requirements of the Myanmar and Chinese governments, the group, as an upstream mining company, continued to consolidate the group’s mining businesses in China and Myanmar. During the year, the major production and operation activities of the Group continued to focus on the group’s three key mines, Aung Jiujia Mine and GPS JV Mine in Myanmar, and Dakuangshan Mine in the PRC, which provided important revenue to the Group. Shizishan Mine and Menghu Mine in the PRC continued low-level operations. For Liziping Mine and Dazhupeng Mine in the PRC, the group have obtained its exploration permit and are processing to apply for the mining permit. For Lushan Mine, the group accelerated the renewal of exploration permits and conducted all necessary works in preparation of the application for mining permit. Prospects: Despite the ongoing disputes and tensions of trade and the outbreak of the Epidemic have made the world economic and political situation more complicated, the Group continues to make every efforts to improve its operation and will take the following measures, including but not limited to: 1.With the increasingly stringent laws and regulations regarding environmental protection and emission reduction standard in Myanmar and China, the group will continue to accelerate the transformation and upgrading progress of the group’s businesses and strengthen and enhance the management and control on the health, safety and environmental systems of the mines of the Group, striving to be an international professional miner; 2.The group will continue to strengthen the resource exploration for existing mines in Myanmar and China, in order to explore and develop mines with abundant resources and high quality; 3.The group will enhance the operational efficiency and effectiveness of the Group by further enhancing the cost-cutting measures, and further enhance the group’s management and control level and efficiency; 4.In terms of financing, the group will continue to strive to restructure the group’s financing structure to seek for means with lower cost and longer repayment term by all different possible means, including but not limited to equity or debt financing or other alternative means; and 5.The group will grasp the historical opportunities brought by the Belt and Road Initiative and continue to actively explore the markets in Myanmar or other emerging regions, and prudently grasp the mergers and acquisitions opportunities in overseas.

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