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Public company info - KangLi International Holdings Limited , 06890.HK
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KangLi International Holdings Limited, 06890.HK - Company Profile
Chairman Liu Ping
Share Issued (share) 606,000,000
Par Currency Hong Kong Dollar
Par Value 0.001
Industry Steel
Corporate Profile Business Summary: The Group is principally engaged in production and sales of (i) unpainted and painted galvanized steel products to midstream steel product processors; and (ii) cold rolled steel products to home appliance manufacturers. Performance for the year: For the year ended 31 December 2019, the total revenue of the Group amounted to approximately RMB1,495,630,000, representing a decrease of approximately 3.4% from approximately RMB1,548,276,000 in the year ended 31 December 2018. For the year ended 31 December 2019, gross profit of the Group amounted to approximately RMB99,525,000 (2018: approximately RMB130,760,000). Overall gross profit margin decreased from approximately 8.4% in 2018 to approximately 6.7% in 2019. Profit before taxation of the Group decreased from approximately RMB44,655,000 in 2018 to approximately RMB23,469,000 in 2019. Profit for the year of the Group decreased from approximately RMB50,921,000 in 2018 to approximately RMB24,698,000 in 2019. Net profit margin of the Group decreased from approximately 3.3% in 2018 to approximately 1.7% in 2019. Business Review The Group is a leading midstream galvanized steel products manufacturer in the home appliance sector in Jiangsu Province, the PRC. The Group primarily engaged in the production and sales of cold rolled steel products, unpainted galvanized steel products and painted galvanized steel products to mainly midstream steel product processors for further processing and to home appliance manufacturers for production of home appliances such as refrigerators, washing machines and ovens. The Group has the production capability of pickled rolls, coldrolled steel, unpainted galvanized steel and painted galvanized steel products along the whole industry chain. For the year ended 31 December 2019, the Group recorded a revenue amounting to approximately RMB1,495,630,000, a decrease of approximately 3.4% compared with that of the corresponding period in 2018. For the year ended 31 December 2019, the sales volume of the Group's cold rolled steel products and galvanized steel products totalled 276,242 tonnes, representing an increase of 956 tonnes or approximately 0.3% compared with 275,286 tonnes for the year ended 31 December 2018. During the review period, the sales volume of the Group's cold rolled steel products and galvanized steel products were 20,843 tonnes and 255,399 tonnes respectively, and among the latter, the sales volume of the Group's unpainted galvanized steel products and painted galvanized steel products were 189,715 tonnes and 65,684 tonnes respectively. Under fierce market competition, the year saw a remarkable decrease in both the sales volume and average selling price of unpainted galvanized steel products. The sales volume of unpainted galvanized steel products dropped from 213,611 tonnes in the year ended 31 December 2018 by 23,896 tonnes or approximately 11.2% to 189,715 tonnes in 2019. As regards painted galvanized steel products, the sales volume increased from 43,201 tonnes in the year ended 31 December 2018 by 22,483 tonnes or approximately 52.0% to 65,684 tonnes in 2019. The Group's total sales volume for the year ended 31 December 2019 remained relatively stable. As the utilization of the Group's painted galvanized steel production line was yet to reach its maximum capacity, the Group geared up the Group's efforts on boosting sales and took up additional sales orders for the Group's painted galvanized steel products, which had led to the substantial increase in the sales volume of the Group's painted galvanized steel products. In 2019, with the Group's dedication to the research and enhancement of craftsmanship, the Group submitted application for 9 utility model patents. By enhancing techniques and craftsmanship, the Group managed to uplift the Group's production efficiency, reduce losses during production processes, and in turn lower the relevant costs of the Group's products. Prospects: The Central Economic Work Conference held at the end of 2019 stressed “the holistic implementation of city-specific policies and the long-lasting austerity mechanism for stabilizing land prices, property prices and expectations, and fostering the steady and healthy development of the real estate market”. Austerity measures on the real estate industry were not slackened, while some gradual slowdown was noted. The steady development of the real estate market is good to the demand for home appliances. Since June 2019, a number of policies were introduced in the PRC to boost demand in various industries such as automobile, home appliances, consumer electronics products and so forth, and to facilitate the recycling and rejuvenation of home appliances as well as the elimination of products with high power consumption. Meanwhile, with the promotion of 5G technology and the growth in demand for non-conventional rigid-demand products such as dishwashers and tumble dryers, it is anticipated that the home appliances market will see new momentum for growth. The Group will strive for long-term steady development and seek further expansion of its market share by engaging in active communication with local governments, identifying suitable land parcels and expediting its capacity expansion plan. The Novel Coronavirus Pneumonia Outbreak (the “NCP Outbreak”) in early 2020 spread across the PRC and the world at large and will likely cause substantial impact on economic development. To mitigate the effect of the NCP Outbreak on businesses, the government has launched various policies to ease the financial burden on businesses. The Group believes that the Group can win this battle against epidemic and resume normal production and operation in the near future. The Group has been closely monitoring the impact of the developments on the Group’s businesses and has put in place contingency measures. As far as the Group’s businesses are concerned, the NCP Outbreak may cause production and delivery delays of the Group’s steel products, but the directors of the Company consider that such impact is temporary and could be reduced by expediting production upon cessation of the NCP Outbreak. In addition, the NCP Outbreak may also significantly impact the demand of the Group’s steel products which in turn may result in the decrease in sales of such products, and hence the profitability of the Group’s operations and the potential impairment of the Group’s production facilities in future periods. Such possible decrease in the demand of the Group’s products may be a result of the customers’ deteriorating operations which may increase the impairment risks of related debtors in future periods.

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