[21 Finance] CIMC's 2020 revenue increases by 9.7% to 94.2 billion yuan
- Categories:Company news
- Time of issue:2021-07-09
[21 Finance] CIMC's 2020 revenue increases by 9.7% to 94.2 billion yuan
- Categories:Company news
- Time of issue:2021-07-09
On the evening of March 29, CIMC announced its 2020 results. Last year, it achieved operating income of RMB 94.159 billion, a year-on-year increase of 9.72%; and realized net profit attributable to shareholders of the parent company and other equity holders of RMB 5.35 billion, a year-on-year increase. 246.88%.
The financial report shows that under the impact of the epidemic, CIMC lost 641 million yuan in the first quarter of 2020. Although the performance of the second quarter was greatly reduced, the net profit returned to the parent in the first half of the year was at a loss. This was subsequently benefited from the implementation of the group's control measures during the special period. At the end of the third quarter, the container market began to pick up, CIMC’s performance bottomed out, operating cash flow increased substantially, and both revenue and profit reached new highs.
Among them, CIMC achieved revenue of 56.729 billion yuan in the Chinese domestic market, a year-on-year increase of 25.18%, accounting for 60.25% of total revenue, exceeding 52.81% in 2019, and domestic business revenue is showing a rapid upward trend.
In 2020, CIMC will reorganize its industrial structure and focus more on its core business segments. The five major businesses, including containers, road transport vehicles, energy and chemicals, airport and logistics, account for 83% of the main operating income. At the same time, Shenzhen Capital Group, a subsidiary of Shenzhen State-owned Assets Supervision and Administration, strategically invested in CIMC and became the largest shareholder. With capital assistance and strategic adjustments, CIMC launched a "second venture."
On March 30, CIMC Chairman Mai Boliang told the 21st Century Business Herald and other media at the performance communication meeting: “The future investment strategy of the group is to focus on areas where it has advantages but where there are shortcomings and space in the market. Clean up and sell businesses that cannot form an advantage in market competition."
Container orders are full, prices remain high in the first half of the year
According to the financial report, CIMC's container segment achieved operating income of 22.164 billion yuan in 2020, an increase of 9.92% year-on-year, and achieved a net profit of 1.987 billion yuan for the year. The net profit margin reached the highest level in recent years.
Since the second half of 2020, there has been an imbalance between supply and demand for containers, which is "difficult to find one box". Coupled with the recent accidental stranding of the Suez Canal, this has further aggravated the tension of shipping containers, and container prices have also risen.
The financial report shows that in 2020, the average price of CIMC’s 20-foot dry cargo standard container in January’s statement settlement is about US$1,656, and the average price in December has risen to US$2,322.
It can be seen that the price has risen sharply last year. How long will the price increase continue next? Will demand drop significantly? What is the trend of the container industry?
CIMC Chairman Mai Boliang responded: “More than 95% of the world’s containers are produced in China. There is an industry health action in the industry. Everyone has consistent standards on standards, quality, environmental protection, and labor. The industry’s competitive situation More and more healthy. Last year it was difficult to find a box, and the current situation is gradually alleviating. However, the major problem could not be solved in the first half of the year. The orders were full. The monthly output of the whole industry was more than 400,000, and CIMC had about 200,000. The current front-line work situation It is 611 (6 days a week, 11 hours a day)."
Regarding the demand situation, he said: “The demand side has hit a record high for containers. In addition to the Suez Canal accident, we judge that the peak season will extend from June to July, August, and September. At the same time, it also depends on the changes in the epidemic. Make a judgment."
When it comes to price trends, Mai Boliang believes: "Container prices remained high in the first half of the year, and prices will not drop sharply this year. First, the demand is high. Although it has eased, it is still relatively tight. July and August may not return to normal conditions. A complete solution may not be until September, October, and November. Moreover, the price of raw materials and steel is also high. The current increase in container prices is higher than that of raw materials. This year's (CIMC) gross profit level will definitely be much higher than last year. Recovery after the epidemic Normally, there will be a downward adjustment for a period of time. We can also adjust our production capacity and return to the 408 work rhythm (4 days a week, 8 hours a day)."
Logistics revenue exceeds 10 billion for the first time, and will not give up offshore engineering
From the perspective of CIMC as a whole, containers are no longer the only label. Its revenue accounts for only 23%. Vehicles, energy, logistics, offshore and other sectors continue to develop.
According to the financial report, the vehicle segment (with CIMC Vehicles as the main operating body) achieved a total operating income of 26.499 billion yuan for the year, a year-on-year increase of 13.56%, a record high; net profit was 1.269 billion yuan.
CIMC's energy, chemical and liquid food equipment business achieved operating income of 13.292 billion yuan and a net profit of 360 million yuan. This business (with CIMC Enric as the main operating entity) due to the dual impact of industry cyclicality and the epidemic, the global market capacity of chemical tank containers has fallen sharply, and the overall performance has declined, but the main products still maintain the leading position in the industry. Clean energy equipment, one of the three major businesses in this sector, achieved revenue of 7 billion yuan, a year-on-year increase of 2.7%.
The airport/fire protection/automated logistics equipment business (with CIMC Tianda Holdings as the operating entity) will achieve operating income of 6.089 billion yuan in 2020, an increase of 2.12% year-on-year; net profit of 324 million yuan, an increase of 28% year-on-year.
The operating income of the logistics segment exceeded 10 billion yuan for the first time in 2020, reaching 10.636 billion yuan, a year-on-year increase of 16.15%, becoming CIMC's fourth business segment with revenue exceeding 10 billion yuan; net profit reached 266 million yuan, an increase of 140.57% year-on-year. Affected by the new crown epidemic, global oil production in 2020 will experience negative growth for the first time in recent years. However, in that year, CIMC's offshore engineering business (with CIMC Raffles as the operating entity) achieved operating income of 5.425 billion yuan, an increase of 20.12% year-on-year, but there was still a certain loss.
Regarding the loss-making offshore engineering business, Mai Boliang said that CIMC will not shut down the offshore engineering business and will not be affected by performance fluctuations, and that the offshore engineering business has already reduced losses significantly in 2020 and is expected to continue to reduce losses in 2021.
He also mentioned that CIMC Offshore still has to resolutely follow the path of reorganization, and the development of the offshore sector is also an inevitable requirement of the country’s “marine power”. At present, the Group's offshore engineering sector is not only limited to traditional oil and gas business, but also has successively developed deep-sea aquaculture, construction of offshore data centers, development of offshore garbage power generation, and construction of offshore amusement facilities.
In addition, in 2020, CIMC has integrated a number of high-quality companies within the group that are mainly engaged in small and medium-sized logistics vehicles, and established a unit vehicle business section (hereinafter referred to as "CIMC Vehicles"), focusing on providing services to automobiles, liquid chemicals, and rubber. And other industries provide professional integrated solutions for R&D and manufacturing of unitized logistics vehicles, leasing operations and packaging. In 2020, CIMC’s newly established unit vehicle business achieved revenue of 3.036 billion yuan and a net profit of 94 million yuan.
In addition to equipment manufacturing, CIMC also has financial and asset management businesses that serve the development of various businesses of the group. In 2020, CIMC's financial and asset management business will achieve operating income of RMB 2.178 billion and net profit of RMB 312 million. The main operating entities are CIMC Financial Leasing Company, CIMC Finance Company and Offshore Asset Pool Management Platform Company.
Shenzhen State-owned Assets Investment Co., Ltd. Helps CIMC "Second Entrepreneurship"
It is worth noting that while CIMC’s business is restructuring, the major shareholder of CIMC will change in 2020. On December 18, 2020, Shenzhen Capital Group made a strategic investment in CIMC, holding a total of 29.74% of CIMC's shares, and officially became the largest shareholder of CIMC. The Shenzhen State-owned Assets Supervision and Administration Commission, through Shenzhen Capital Group's investment in CIMC, has further improved Shenzhen's deployment of high-end manufacturing in the fields of marine economic development and logistics and energy equipment.
CIMC stated that this equity transfer is the most significant equity structure change that CIMC has experienced since its listing in 1994. It is a milestone event in the history of CIMC's development and is of great significance to CIMC's future development. After the completion of the equity change, CIMC's long-term mixed ownership governance structure has not changed, and CIMC still maintains a market-oriented operating mechanism.
Regarding the shareholding of Shenzhen State-owned Assets Supervision and Administration, Mai Boliang said: “First, CIMC Group will continue to have no actual controller after Shenzhen State-owned Assets Supervision and Administration will continue to implement a modern corporate governance model; the second group is currently fully docking Shenzhen State's relevant resources; third Shenzhen state-owned assets fully support the development of CIMC, including the process of transferring land from Pingshan industrial and commercial enterprises to a certain extent."
On the other hand, CIMC itself is also active in the capital market. For example, CIMC Industry City through the capital increase of Country Garden and the introduction of Qujiang Wentou's strategic investment for the second time, CIMC's shareholding ratio in CIMC Industry City fell to 45.92%, and CIMC Industry City became an associated company of CIMC. . After the second citation, CIMC has focused more on the logistics and energy industries.
At the same time, CIMC’s various sectors have successively landed on the capital market. Since 2019 CIMC Vehicles was listed on the Hong Kong Stock Exchange and became the first semi-trailer manufacturer in the Hong Kong stock market. In 2020, CIMC Vehicles plans to be listed on the Shenzhen Stock Exchange’s Growth Enterprise Market. The share issuance application has been reviewed and approved by the Shenzhen Stock Exchange’s Growth Enterprise Market Listing Committee, and is awaiting submission to the China Securities Regulatory Commission for registration.
CIMC Enric's subsidiary CIMC Enric Technology Co., Ltd. plans to independently list A shares and has obtained the consent of the Hong Kong Stock Exchange on the proposed spin-off.
From the beginning of October 2020, CIMC-TianDa has been privatized by means of agreement arrangement. On January 25, 2021, CIMC-TianDa has officially withdrew from the listing status of the Hong Kong Stock Exchange.
The various changes are regarded as a "second entrepreneurship" within CIMC. Last year, CIMC held a strategic discussion and reorganized business reorganization, capital operation, and corporate governance.
In a recent CCTV interview, Mai Boliang said: “A lot of new things are for CIMC, that is, the second venture. CIMC has now made 24 products that have the best global market share. With 24 champion products, we will do a few decent things during the "14th Five-Year Plan" period. At least we will make CIMC's future global champion products from 24 to more than 30. This is our goal."
(Author: Ni Yuqing Editor: Zhang Weixian)
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