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Public company info - United Strength Power Holdings Limited , 02337.HK
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United Strength Power Holdings Limited, 02337.HK - Company Profile
Chairman Zhao Jinmin
Share Issued (share) 375,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Petroleum & Gases
Corporate Profile Business Summary: The group is principally engaged in the sale of natural gas to vehicular end-users by operating refuelling stations and provision of petroleum and gas transportation services. Performance for the year: For 2019, the Group’s revenue amounted to RMB403.2 million, representing an increase of RMB55.0 million or 16% from RMB348.2 million in 2018. The gross profit for 2019 was RMB176.5 million (2018: RMB148.8 million), with a gross profit margin of 44% (2018: 43%). For 2019, the net profit of the Group amounted to RMB35.7 million, representing a decrease of RMB7.8 million from RMB43.5 million in 2018. Business Review Looking back at 2019, although the Sino-US trade negotiation hit constant bumps, China’s macro economy maintained generally stable and progressive. According to the State Statistics Bureau, the annual GDP in 2019 was RMB99 trillion, representing a year-on-year growth of 6.1%, in line with the expected range between 6% and 6.5%. At the same time, China has also entered a new phase of energy structure adjustment promoting gas consumption. Natural gas production maintained a high growth rate coupled with steadily growing demand, allowing natural gas to gradually replace traditional energy sources such as coal and petroleum. China’s natural gas consumption reached 304 billion cubic meters in 2019 with fast growth of production and imports, all three of which recorded a year-on-year increase of over 9%. The proportion of natural gas in China’s primary energy consumption has jumped from 5.7% in 2014 to 8.3% in 2019, fulfilling the target of energy-related institution transformation set out in the “13th Five-Year Plan on Natural Gas Development” in advance. Thanks to favorable national policies, the natural gas industry not only enjoyed rapid development, but also showed tremendous potential. During the reporting period, the government attached great importance to the sustainable development of clean energy and a lowcarbon, green economy, and introduced a number of favorable policies for the industry. It is worth mentioning that the National Petroleum and Natural Gas Pipe Network Group Co., Ltd. was established in December 2019, separating pipeline transportation from production and sales and opening itself to third-party entities in a fair manner, which is conducive to benign market competition. With policy incentives and development on the technology side, China has vigorously developed natural gas fueled vehicles, accelerated the construction of natural gas refuelling stations and increased the use of natural gas in recent years, laying a good foundation for the future development of the natural gas vehicle industry. Benefiting from national policies, the Group achieved an operating profit of RMB58.9 million this year. Prospects: 2020 is the concluding year of the “13th Five-Year Plan” when a moderately prosperous society is to be built in an all-round way. The 2019 Central Economic Work Conference emphasized that China is at a critical point to tackle various tasks including changing the development mode, optimizing the economic structure and transforming the growth momentum. At this point, structural, institutional and cyclical issues tangle together, creating threefold negative influence, intensifying the downward economic pressure and exerting a general influence over energy consumption. With the acceleration of economic restructuring and energy consumption structure optimization, the development of clean energy, improvements on energy efficiency, deepening of international energy cooperation and down-to-earth implementation of the new energy security strategies will help secure China’s stable economic development. China has just entered the rapid development phase of natural gas. The China-Russia east-route natural gas pipeline – a major international project on strategic natural gas cooperation and the largest energy cooperation project between China and Russia up to the moment – was put into operation in December last year. In light of the “13th Five-Year Plan on Energy Development” and a number of national policies issued in recent years, the demand for natural gas consumption is expected to continue to grow at a relatively high rate. As one of the pioneers in the industry, the Group will actively expand its business areas and explore its potential by utilizing its own and regional competitive advantages. In order to further expand its business, the Group will explore areas related to its main business and grow along the industrial chain to promote diversification of income sources. The Company entered into the sales and purchase agreement to acquire the entire issued share capital of Eternal Global Investment Limited (“Eternal Global”) on 18 September 2019. Eternal Global was the largest independent refuelling station operator in Northeast China in terms of annual sales of refined oil products in 2018, accounting for approximately 1.0% of total market share in Northeast China (comprising independent and state-owned refuelling station operators). This proposed acquisition will help the Group to tap into potential businesses such as the refuelling and oil wholesale, laying a solid foundation for the Group’s expansion into other regions in China, while diversifying the Group’s revenue sources and providing attractive investment opportunities, thus enhancing the Group’s competitiveness in the industry. Looking ahead into 2020, challenges and opportunities coexist. The recent new coronavirus (nCoV) outbreak in Mainland China has affected the Group’s business to a certain extent. While protecting the health and safety of its employees, the Company will continue to adopt a costsaving strategy to maintain profitability, but it is expected that the performance in the first half of the year may fall behind comparing with the same period of 2019. In the future, the government will continue to promote the use of natural gas vehicles and the construction of natural gas refuelling stations. The Group will continue to focus on natural gas sales and transportation businesses, while seeking new development opportunities and exploring margin growth potential on the basis of consolidating its advantageous position in the CNG refuelling station market in Jilin Province, so as to realize the steady development of the entire business and create valuable returns for shareholders.

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