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Billion Industrial Holdings Ltd., 02299.HK - Company Profile
Chairman	Sze Tin Yau, Zhang Shengbai
Share Issued (share)	2,119,000,000
Par Currency	Hong Kong Dollar
Par Value	0.01
Industry	Textile & Apparels
Corporate Profile	Business Summary: The principal activities of the Group are manufacturing and sales of polyester filament yarns products and polyester thin films products. Performance for the year: Revenue for the year ended 31 December 2019 amounted to RMB9,396.9 million, representing an increase of 9.2% compared to the year ended 31 December 2018. Profit for the year ended 31 December 2019 amounted to RMB853.2 million, representing an increase of 10.2% compared to the year ended 31 December 2018. Earnings per share for the year ended 31 December 2019 amounted to RMB0.40 (2018: RMB0.36). Business Review: Stable growth By always adhering to the mission of “providing eco-friendly products for the public, aspiring to be the world’s premier supplier of consumer product materials”, the Group implements the operation philosophy of “creating green products”. Aiming at “technology innovation and improving competitive strength”, we persist to pursuing the technology innovation approach of a combination of “Production, Learning, Research and Application”. The Group formulates the deepened reform proposal through technology improvement, technology innovation, product mix optimisation and recruiting innovative talents, and strives to research and develop new products and enhance product added value, as well as improving brand values and market competitiveness of the Company. The Group enjoyed scalable cost advantages through introducing large-scale and advanced production equipment. Most of our key equipments are imported from Germany and Japan which are of international first-class equipment standards. High quality equipment provides the Group with strong guarantee of both product innovation and technology innovation. The Group owns the largest differentiated chemical fiber production base in Southern China. It is also the first enterprise in Fujian Province to adopt the world’s advanced melt-direct spinning differentiated chemical fiber production line and possesses the industry leading spinning and texturing equipment and technology. The Group attaches great importance to the introduction and cultivation of talents. The talent strategy of “recruiting employees with due care and connecting people with heart (招人留心、用人連心)” attracts more people of insight to join the business. We have cooperated with Donghua University to establish a talents practice base, and we have become an enterprise with excellent research and development talents. The Group has a research and development team, comprising over 600 senior technicians from all around the country, to develop new products under a market-oriented approach. The Group also has a sizable quality control team equipped with the world’s advanced testing facilities to ensure stringent product quality and personalized quality service. During the year under review, the prices and spreads of polyester filament yarn were stronger than those in the same period in history. Benefiting from the economic cycle and the rise of the crude oil price, the price trend of polyester products was relatively strong, and the market demand for the Group’s products remained strong. In addition, the polyester filament yarn project of Billion Vietnam has officially started production. The sales volume and sales revenue of the Group continued to grow steadily. During the year under review, the Group’s differential products accounted for 70.2% of its total revenue. Such a high rate ensures our market competitiveness and is also a key factor contributing to the steady growth of the Group’s sales turnover. Project development and product research and development As the largest polyester filament yarns manufacturer in Southern China, we are selected as the “innovative enterprise” under the technological and innovative projects of Fujian Province. By relying on technology innovation, we strived to establish a digitalised and intelligentised automatic chemical fiber production workshop, and became the industry front runner of realising the full process intelligent automatic production. By leveraging on digitalisation, networking and modularisation of automatic equipment, the Group keeps on improving its products’ quality and production volume. The management team of the Group applied scientific management software to (i) achieve networking and informatisation management during the course of production; (ii) arrange production allocation among various products; and (iii) deploy equipment between production and research and development to maximise the usage of production capacity. The scientific production management process enhanced the production efficiency of the Group, which enables the Group to constantly launching new products in time targeting at market demand with a view to increasing the strengths of product differentiation. During the year under review, several projects of the Group were listed in the “Fujian 2019 Key Project List”. The Group has strong scientific research strengths. Its technology centre was awarded as the “State Enterprise Technology Centre” and its fiber testing centre gained the recognition of CNAS National Laboratory. The Academician Expert Work Station was launched to carry out special scientific research and cooperation. The “Large-capacity melt direct spinning ultrafine polyester filament yarn engineering technology development” (大容量熔體直紡超細旦滌綸長絲工程技術的開發) project jointly undertaken by the Company, Donghua University and State Grid Jinjiang Power Supply won the “Second Class of Science and Technology Progress Award of Fujian Province”, which is testimony to the innovation and research and development efforts of the Group. Such project represents China’s first large-scale mass production of melt direct spinning of ultrafine polyester filament yarns possessing core patent technology. The overall technology level of the project is leading its peers in China. In the course of research of the project, we have successfully developed the polyester structural control and trace modification technology, polyester melt instant dynamic synergy control technology, melt homogenization and high stability filament formation technology as well as high efficiency and quality and increased elasticity engineering technology. We have overcome the bottlenecks arising from the conflicts between the polyester crystallization process and the process of increased elasticity of ultrafine polyester filament yarns and the difficulties in ultrafine fiber melt homogenization and high stability filament formation with control over yarn levelness and dye uniformity. We have also set up a systematic and scientific system for ultrafine polyester filament yarns FDY and DTY full process quality control technologies and standards, thus forming an independent intellectual property rights system comprising procedural control, product development and device modification. In addition, the Group’s industrial yarn project in the F zone is in full swing. The F zone project introduces the latest model of German Barmag high-speed winder, which can produce a full range of products, including ordinary high-strength, low-shrink, ultra-low-shrink, activated type, anti-wicking and water-repellent type, car seat belt wear-resistant type, special sewing thread type, non-ferrous type, etc., and it is equipped with plied and twisted lines and twisting equipment to enrich the product structure. The Group will provide customers with high-end quality products and gradually occupy the market. We have been committed to constructing our industrial yarn projects with the belief of “high quality, high starting point, specialization, and serving various fields”. The Group’s industrial yarn automation equipment is the highest in degree of automation and the most advanced device in the textile industry at home and abroad. Each yarn at the spinning heat roller is equipped with an in-line filament detector, which can be detected by the yarn passing device. Unlike the manual, which can only detect filaments on the surface, cross-section, and bottom of the filament, the in-line filament detector can also detect the filaments that are not visible to the naked eye inside the tow, which is more accurate. From the central control room, the information of each filament can be seen. The filament detection system data is connected to the automatic packaging line. The system can automatically identify by location information and grade according to the condition of wool. Billion Fujian and Billion High-tech, principal subsidiaries of the Group, both have been awarded as high technology enterprises. For the year ended 31 December 2019, revenue generated from the Group’s differentiated products amounted to RMB6,595,432,000, accounting for 70.2% of its total revenue for the year, representing an increase of RMB700,399,000 or 11.9% as compared to 2018. The Group believes that its products, protected by national patents, will be well recognised in both domestic and international markets and will provide the Group with a strong competitive edge. As of 31 December 2019, the Group owned 108 national patents registered in China and had applied for 116 national patents. Among all of the Group’s patented products, 70 of them have already been applied to our products sold to customers. Our research and development expenditure was RMB297,481,000 in 2019, representing 3.2% of our total revenue. Our research and development efforts mainly focus on improving product quality and production efficiency and enhancing the innovation capability of the Group in every aspect from chemical fiber to textile fabrics. Market development As a core region of Maritime Silk Road in the 21st Century, Fujian Province has been committed to building a cutting-edge platform for foreign trade and economic cooperation in recent years. With the implementation and deepening of the “Belt and Road” initiative, Fujian enterprises have become increasingly active in “going global”. As a leading enterprise in Fujian, the Group actively responded to the national call and decided to invest in Vietnam to build a polyester factory as early as 2016. After more than two years of preparation, the “700,000-ton differentiated chemical fiber project” that we invested in Tay Ninh, Vietnam, was formally put into operation on 29 September 2019. The project will become a demonstration platform for China-Vietnam production capacity cooperation, and it also marks a major step forward for the development of the Group. The project is equipped with 2 full draft yarns and 8 pre-oriented yarn production lines, and 130 high-speed texturing machines for drawn textured yarns, with the goal of forming a 200,000-ton differentiated chemical fiber production capacity. In terms of process technology, polyester adopts the latest process technology of China Textile Industry Design Institute, and the spinning production line realizes intelligent production control and automatic monitoring of the process through a series of automated means such as robot doffing, robot packaging, automatic product appearance inspection, and three-dimensional automatic storage. Billion Vietnam is of iconic significance to the Group’s expansion into emerging markets. The Group has all along been paying great attention to marketing channel expansion and customer services. Our flexible sales strategies enable us to understand market situations in time, focus on customers’ experience and timely communicate the feedback from customers to the technology and production centre, thus ensuring bilateral interaction and providing fast and efficient product after sales services. While consolidating our market share in Fujian and Guangdong Provinces, we have also strived to develop the international markets and continued to improve our response to the market whilst expanding the emerging markets. According to the feedback of downstream users in the emerging markets, we made functional improvement and technology upgrade to our existing product lines with suitable marketing strategy, strengthened quality control on export products, and maintained cost advantages. The Group’s export sales for the year under review increased by RMB52,137,000 or 4.6% as compared to the same period in 2018, which represented a further increase in brand popularity and market share in overseas markets. Production capacity expansion The Group is investing approximately US$222 million in Vietnam to expand the polyester bottle chip business, polyester filament yarns production facility, and the polyester, POY and FDY production facilities, which were going into production during the year under review, marking the overseas business of the Group will enjoy a healthier long-term and sustainable development. Furthermore, in view of the increasing consumption of polyester industrial yarns in the PRC in recent years, in particular, the accelerating expansion of the polyester industrial yarns market in Eastern China, the Group is investing approximately US$185 million to set up a production line for polyester industrial yarn products, which is in the process and leading the Group to expand this business. The total production capacity of the new manufacturing facilities will be approximately 250,000 tons per annum and they are expected to gradually commence commercial production in the second quarter of 2020. As of 31 December 2019, the designed capacity of FDY and POY of the Group was 1,097,800 tons per year, the designed capacity of DTY was 766,900 tons per year, and the designed capacity for polyester thin films was 255,000 tons per year, of which the designed capacity of BOPET thin films was 182,500 tons per year.” Prospects: Although the recovery of global trade and investment is slower than expected, the easing of the US-Sino trade war and the loosening of monetary policy by major central banks around the world and the introduction of various fiscal stimulus policies in some countries in response to the economic slowdown, global economic growth will be slightly improved in this year, recession risks will be limited, monetary policy will be looser, and the economic outlook will be flat. In recent years, the price and spread performance of polyester filament yarns have been stronger than that in the same period in history. The concentration has continued to increase at the same time as the conversion of old and new capacity. As the largest polyester filament yarns manufacturer in Southern China, the largest differentiated chemical fiber production base in Fujian region and one of China’s top 500 private enterprises, the Group has always been focusing on technological innovation. It adopts the world advanced melt-direct spinning differentiated chemical fiber production line, and possesses the leading spinning and texturing equipment and technology in the industry. Benefiting from the economic cycle and the rise of the crude oil price, the price trend of polyester products of the Group continued to improve. In addition, the continuous launch of new products has driven up the price of the Group’s products and coupled with our appropriate cost control, the Group’s overall business has experienced steady growth. The Billion Vietnam Polyester Filament Project, which has an iconic significance for the Group’s expansion into emerging markets, was formally put into operation in September 2019, further expanding the Group’s overseas markets. Furthermore, in view of the increasing consumption of polyester industrial yarns in the PRC in recent years, in particular, the accelerating expansion of the polyester industrial yarns market in Eastern China, the Group is investing approximately US$185 million to set up a production line for polyester industrial yarn products to expand this business. The total production capacity of the new manufacturing facilities will be approximately 250,000 tons per annum, and they are expected to gradually commence commercial production in the second quarter of 2020. Polyester thin films consumption has been increasing in China in recent years, and China has become an important production base for polyester thin films products worldwide. By expanding the existing polyester thin film business, the Company will be able to leverage its existing scale and expertise in manufacturing polyester thin films to enjoy the growth of this market. The Group currently has geographical, technological and cost advantages in the polyester thin film industry. At a time when the industry is still in the blue ocean stage, the future polyester thin film will remain an important performance growth driver of the Group. Therefore, the Group is investing approximately US$230 million to establish a polyester thin film production line in the three years from 2019 to 2021. Upon completion, its estimated total production capacity will be approximately 255,000 tons per year. After the expansion plans for the polyester industrial yarn project and the polyester thin film project are completed, the size of the Group, and the sales volume and sales revenue of products will further increase. However, due to the impact of the continuing of the epidemic, there was some short-term impacts on the overall textile industry and the sales of the Group. However, as the textile industry is still well-founded, we remain confident in the medium and long-term development of the business.”

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Public company info - Billion Industrial Holdings Ltd. , 02299.HK