Revenue and net profit both exceeded expectation with full order bookings
Hydrogen energy business revenue increased by 175.1% YoY
Financial Highlights
*Core profit - Profit for the six months ended 30 June, excluding amortisation of share base incentive scheme expense and convertible bonds related finance expenses
(24 Aug 2022 – Hong Kong) - CIMC Enric Holdings Limited (the “Company” and together with its subsidiaries, the “Group”) (Stock Code: 3899.HK) is pleased to announce its unaudited interim results for the six months ended 30 June 2022 (the "Review Period").
Chairman of CIMC Enric Mr. Gao Xiang, said, “During the first half of 2022, the Russia-Ukraine conflict and ongoing international instability caused commodity prices to soar. These unfavourable external conditions together with the resurgence of COVID-19 cases led to a slowdown in China’s domestic economy. Despite this adverse external environment, the Group closely analyzed potential development opportunities for its three major businesses during the Review Period. Overcoming various difficulties, it leveraged competitive advantages such as its comprehensive industrial chain layout in clean energy, leading global market share for chemical tank containers, and leadership position in turnkey brewery and distillery projects within the liquid food sector. The Group managed to deliver a strong performance in the first half of the year, growing its revenue and net profit, improving gross margins, and maintaining its market-leading position.”
Business Performance
As a result, the Group’s consolidated revenue for the first half of 2022 rose by 12.7% to RMB8.95 billion (1H 2021: RMB7.94 billion). Gross profit increased significantly by 20.5% to RMB1.42 billion(1H 2021:RMB1.18 billion), gross profit margin also improved by one percentage point year-on-year (“YoY”) to 15.9% (1H 2021: 14.9%), profit attributable to shareholders increased by 14.6% to RMB 439 million (1H 2021: RMB383 million) and basic earnings per share was RMB0.219 (1H 2021: RMB0.195). As of 30 June 2022, the Group's accumulated new orders amounted to RMB10.75 billion, representing YoY growth of 16.8%, with orders on hand surging by 41.7% to RMB17.35 billion.
Revenue from the clean energy segment for the first half of 2022 was slightly down by 4.8% to RMB4.68 billion (1H 2021: RMB4.92 billion). This segment contributed 52.3% of the Group’s total revenue (1H 2021: 61.9%). The resurgence of COVID-19 in China led to lockdowns in various cities and regions, disrupting the domestic supply chain together with rising commodity prices, this has reduced demand for LNG transportation equipment and downstream application equipment. Nevertheless, the Group exploited its strengths in the full LNG, LPG and industrial gases chain, recording significant growth in the upstream LNG-related business and overseas industrial gas equipment segments. In the offshore clean energy sector, the Group delivered four small and medium-sized gas carriers during the first half of the year and secured orders for 121 oil-to-gas conversion vessels. In the hydrogen energy business, the Group achieved revenue of RMB169.49 million, an increase of 175.1% YoY, and made significant progress in all aspects of "production, storage, distribution, refuelling and application". A breakthrough in R&D for the high-pressure hydrogen storage vessels has improved storage and transportation efficiency, giving the Group an industry-leading edge. A strategic cooperation agreement was signed with Templewater Group to expand the Hong Kong’s hydrogen energy market and create a comprehensive hydrogen energy solution for public transport. Hydrogen refuelling stations have also achieved good results with the Group winning several bids.
Revenue from the chemical and environmental segment rose significantly by 67.4% to RMB2.55 billion (1H 2021: RMB1.52 billion). This segment made up 28.5% of the Group’s total revenue. The revenue increase was mainly due to the continuous rise in steel price, tight global shipping capacity with low chemical tank container turnover rate and the decline in RMB exchange rate. These all-spurred demand for chemical tank containers during the Review Period, and the Group further consolidated its industry-leading position in the global tank container market. During the Review Period, the division provided intelligent transportation solutions for the new energy industry which are expected to be widely deployed.
Revenue from the liquid food segment increased by 14.5% to RMB 1.71billion during the period (1H 2021: RMB1.50 billion). This segment accounted for 19.2% of the Group’s total revenue (1H 2021: 18.9%). This revenue increase was mainly due to COVID-19 subsiding in overseas markets during the first half of 2022 with on-site construction projects in this segment returning to normal progress. During the Review Period, the project design and equipment for greenfield malt and grain distillery in China – as well as – turnkey brewery projects in Mexico and Cambodia made steady progress. Moreover, the revenue structure of this business segment continued to improve during the Review Period, with non-beer businesses such as distilled spirits, juices and hard seltzers contributing a higher percentage of revenue and the China market continuing to grow.
Prospects and Future plans
Clean Energy Segment
For the clean energy segment, the outbreak of the Russia-Ukraine conflict in the first half of the year has led to Europe adopting a more diversified approach to natural gas imports – which should increase demand for storage and transportation equipment such as LNG receiving terminals and LNG tank containers. Africa, as an important source of European natural gas imports, should also experience a steady increase in demand for LNG export terminals and other infrastructure. Domestically, the construction of rural micro-pipe network gas supply systems remains a priority in China’s key tasks in promoting rural revitalisation. With a full industry chain layout, the Group will continue to benefit from the development opportunities in various sub-sectors both domestically and internationally.
In terms of offshore clean energy, the LNG-powered vessel orders grew rapidly during the Review Period and boosting demand for LNG bunkering infrastructure. The wave of oil-to-gas conversion of domestic vessels continues to push ahead, the Group will continue to benefit from the growing market of green shipping. In addition, the Group has launched an innovative demonstration application of LNG vessel fuel tank replacement demonstration project, to solve customers' pain points such as operation difficulties and slow bunkering efficiency, consolidating our leading market position in the field of offshore clean energy equipment. In the area of hydrogen energy, with the development of demonstration city clusters, the development of hydrogen energy will officially enter the fast lane.
The Group will continue to adhere to its business development strategy of “key equipment + core process + comprehensive service”, strengthen the entire business chain layout of hydrogen, natural gas, LPG, rely on the Sino-European interaction pattern to strengthen its international business, continue to develop innovative demonstration applications of upstream treatment and processing integrated solutions and services, strengthen the “production, storage, distribution, refuelling and application” integrated overall solution capability for the clean energy.
Chemical and Environmental (CIMC Safeway Tech)
According to the International Tank Container Organization (ITCO), global tank container fleets grew at a compounded rate of over 10% from 2011-2021 and are expected to maintain this growth momentum in the future. On the other hand, domestic new energy and semiconductor sectors, which are growing rapidly, are becoming growth drivers for tank containers. Looking ahead, this segment will continue to consolidate its leading position in the tank container market, expanding into the after-sales and intelligent services for tank containers, focusing on the development of the hazardous waste sub-sector of " recycling hazardous wastes containing non-ferrous metals (precious metals)" to achieve leap-forward development of our environmental protection business. In February 2022, CIMC Safeway Technologies Co. which is in the process of acquiring a separate A-share listing, received the first round of feedback from the Shenzhen Stock Exchange. In July 2022, a second round of feedback from the Shenzhen Stock Exchange was received and as of the date of this report, the listing is still under the enquiry of the Shenzhen Stock Exchange.
Liquid Food Segment
With the world's leadership position in turnkey capability in brewery and distillery projects, this sector will continue to focus on and seize the market opportunities of consumer upgrading and zero-carbon distillery construction, as well as the incremental demand from the progressive growth and intelligent transformation of the global beer, distilled spirits and baijiu markets, the Group is committed to providing the most economical, reliable and innovative solutions and products to our customers. The segment will continue to strengthen its position as a global leader in the beer and distilled spirits, horizontal expansion into non-beer business opportunities in baijiu, hard seltzers, juices, dairy products and biopharmaceuticals, aiming to become the global leader in turnkey engineering for all types of liquid food products.
Looking ahead, Chairman Mr. Gao Xiang has the following conclusions, "Although the situation in 2022 is challenging, however, the Group will build on the strengths it has accumulated over the years in the industry, continuing to focus on natural gas and hydrogen as the mainstay of our clean energy business, intelligent manufacturing and intelligent services as the development direction of chemical and environmental business and aim to establish a world-class turnkey engineering capability for all types of liquid food products for the Group's liquid food business. We will continue to explore growth opportunities in all areas of our business with parallel development strategy to bring more satisfactory returns to our shareholders.
