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Public company info - Huajin International Holdings Limited , 02738.HK
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Huajin International Holdings Limited, 02738.HK - Company Profile
Chairman Xu Songqing
Share Issued (share) 600,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Steel
Corporate Profile Business Summary: The Group is a leading cold-rolled steel processor in Guangdong Province, the PRC. The Group is principally engaged in processing of hot-rolled steel coils into cold-rolled steel strips, sheets and welded steel tubes and galvanized steel products customised to the specification of the customers covering a wide range of industries, including light industrial hardware, home appliances, furniture, motorcycle/bicycle accessories, LED and lighting. The Group provides processing, cutting, slitting, warehousing and delivery services on customized cold-rolled steel products and galvanized steel products. Performance for the year: During the year ended 31 December 2019, the Group recorded revenue of RMB2,162.6 million and a profit attributable to Shareholders of RMB18.4 million, representing a decrease of 25.7% and an increase of 187.5%, respectively, from the corresponding period in 2018. Business Review The group’s sales volume of processed steel products and galvanized steel products in aggregate was 471,302 tonnes for the year ended 31 December 2019, representing a decrease of 125,754 tonnes or 21.1%, as compared to 597,056 tonnes for the year ended 31 December 2018. The annual processing capacity of the group’s cold-rolling process and zinc coating process was approximately 750,000 tonnes and 250,000 tonnes respectively, with an average utilisation rate of approximately 73.6%, and 29.8%, respectively during the reporting period under review. The low utilisation rate for the group’s zinc coating process during the reporting period under review was partly due to the drop in the average processing fee (being the difference between the selling price and the cost of the raw materials, namely hot-rolled steel coils) the group charged for the group’s galvanized steel products, temporary suspension of the group’s production for regular repair and maintenance, and reallocation of the group’s certain production facilities to the group’s new production plant during the reporting period under review. The management considered that it was justified not to accept additional sales order at a lower processing fee to incur additional production costs. In order to maintain its business growth in the long run, the Group invested substantially in property, plant and equipment to strengthen the scale and processing capacity of the existing production base and facilities. During the year ended 31 December 2019, the Group acquired property, plant and equipment and incurred construction costs of approximately RMB182.2 million. By further investments in property, plant and equipment, the management considers that the Group is able to promote the sales volume when a lower unit production costs will be achieved and benefited from boosted economy of sales in production when the new production plant at Gujing Town is expected to commence commercial productions in the second quarter of 2020. The net current liabilities position as at 31 December 2019 was primarily attributable to the fact that short-term borrowings were obtained to finance the non-current capital expenditures on property, plant and equipment, and land use rights. The Directors are of the opinion that, in the absence of any unforeseen circumstances and after taking into account (i) the internal resources of the Group, and (ii) the Group’s presently available financing facilities and the intended renewal of the existing financing facilities upon maturity, the Group would have sufficient working capital to meet its current liabilities or expand its operations as anticipated. The group’s capital commitments towards the acquisition of property, plant and equipment and land use rights, as at 31 December 2019, was approximately RMB189.5 million, which will be financed by the Group’s internal resources and borrowings. The Group envisages ongoing growth in demand for its products and an ongoing need to increase its production capacity. It is believed that these investments will contribute to the Group’s business growth and net profit margin improvement in the years ahead. Prospects: China and the United States have been engaged in trade negotiations since 2018. Both countries have been apparent in trying to seek a compromise, resulting in a slight easing of tension between the countries. Furthermore, the social unrest in Hong Kong since the second half of 2019 has caused further economic uncertainty. This economic downswing, together with the recent outbreak of coronavirus disease (“COVID-19”), cumulate in additional uncertainties in the Group’s operating environment going forward. Domestic demands and local sentiments are expected to stay sluggish and soften further in the near term. The Group is taking precautions to safeguard its employees and business operations in light of the COVID-19 outbreak and will continue to monitor the development, ensuring appropriate steps are taken to manage the risks. It is premature to forecast when the coronavirus will be controlled. However the group remain confident in the longer term outlook for the group’s Group in general, With a view to expand the group’s market share and achieve the group’s comparative advantage, the group’s Group will strive towards the expansion of production capacity for the group’s processed steel products and zinc coated steel products by increasing investments in property, plant and equipment. It is believed that these investments in production plants and facilities, including the acquisition of Gujing Town Land Use Rights, for the expansion of the group’s production capacity will contribute to the Group’s business growth and net profit margin improvement by the Group’s efforts to decrease unit production cost to be benefited from boosted economy of scale in production in the years ahead. The group’s Group will continue to maintain its leading position in the cold rolled carbon steel processors in Guangdong Province in terms of annual production volume thereby providing a solid foundation for the entrenchment of the Company’s long term competitive advantage. The group’s management is committed to achieving sustainable business growth and bringing long-term values to the group’s shareholders.

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