Tiangong International Announces 2018 Annual Results
March 19 2019 - 5:27AM
JCN Newswire
The board of directors of Tiangong International Company Limited
("Tiangong International" or the "Group"; Stock Code: 0826.HK) is
pleased to announce the audited consolidated results for the year
ended 31 December 2018 (the "Reporting Period") and the comparative
figures for the same period of 2017.
During the Reporting Period, revenue of Tiangong International for
the year was RMB5.022 billion, representing an increase of 28.8% as
compared with RMB3.898 billion in 2017. Net profit attributable to
equity shareholders increased by approximately 53.1% from RMB169
million in 2017 to RMB259 million in 2018, mainly attributable to
(i) increase in sales volume of the products of the Group's four
core segments during the year due to increased market demand and
market share; and (ii) the increased price of major raw materials
used by the Group during the year caused an increase in the average
selling price of the products of the Group's four core segments.
Margin of profit attributable to equity shareholders of the Company
increased from 4.3% in 2017 to 5.2% in 2018.
The Board recommended the declaration of final dividend of
RMB0.0357 per ordinary share.
During the Reporting Period, the revenue of the Group's overseas
markets had not been affected by the China-US trade war at all. The
sales volume to the US has not gone down but up, which has fully
reflected that the quality of the Group's products is
internationally recognised and the Group has gained the trust and
support from overseas clients. Therefore, despite the uncertainty
in global economic environment, the demand of the clients is still
steady. During the year, revenue generated from Die Steel ("DS")
segment increased by 24.4% to RMB 2.098 billion. For overseas
market, the continuous strong market demand stimulated an increase
of 17.7% in sales volume while export revenue increased by 36.9%.
For High Speed Steel ("HSS") segment, both domestic and export
revenue experienced an increase in 2018. The segment revenue
increased by 19.5% to RMB782 million, while its domestic revenue
increased by 15.7%. The market demand for overseas market is
relatively strong and the export revenue increased by 28.3%; for
cutting tools segment, overall revenue increased by 9.6% to RMB581
million, while the sales volume of overseas market increased by
23.8%. For titanium alloy segment, demand for titanium products
remained strong during the year. 37.8% increase in sales volume was
recorded. At the same time, the price of sponge titanium increased
during the year. As the major raw material of titanium alloy
segment, the increased price on sponge titanium was passed on to
our customers. Accordingly, average selling priced also increased
by 5.8% during the year.
For the product development strategy, the Group strives to explore
high-end markets to increase profits. After the restructuring of
factory area in Danyang, Jiangsu, the Group is fully committed to
develop the powder metallurgy project. The first Powder Metallurgy
Institute in mainland China was established at the end of last year
jointly by the Group and China Iron & Steel Research Institute
Group. It aims to develop high-quality metal powder products
comparable to international advanced level. The Group could enter
the high-end market by setting up a powder metallurgy production
line to improve the technical level of the Group's products and
meet the high specification requirements of aerospace industry and
3D printing etc. With the focus on entering high-end market, the
Group has made efforts to automate production system in recent
years. Apart from enhancing the precision of products, it would
also reduce manpower cost and speed up the production process.
For the marketing strategy, the Group has strengthened direct sales
channels to minimise the dependence on distributors used to be in
this industry. During the year, the proportion of direct sales
enterprise customers increased. Increasing the direct sales channel
would help reduce the distribution cost and improve the Group's
gross profit margin. Meanwhile, clients would enjoy a lower
purchase price. This mutual beneficial cooperation with clients
would achieve a win-win situation. By eliminating the barrier of
distributors, the Group could enhance its understanding of customer
needs, such as the product specifications and requirements of
post-processing. The Group would be able to adjust the products
accordingly and ensure that the products meet the market needs
well.
Looking into the future, Mr. Zhu Xiaokun, the Chairman of Tiangong
International Company Limited, underlined that innovation and
advancements are the best way to remain competitive and to realise
the true value of the Group's businesses. After many years of
effort in innovation, Tiangong International has grown into a
leading new materials company. The major products of the Group,
tools steel (including DS and HSS), titanium and titanium alloy,
were included in the National Catalogue of New Materials Industry,
while high-speed tool steel was included in the Ministry of
Industry and Information Technology's List of Champion Single
Products in Manufacturing Industry (Third Batch). In the future,
the Company will strengthen its position as the first-rated company
who can pioneer the development of the world's new materials
industry and offer strong support for the transformation and
upgrade of China's manufacturing industry. With increased
publicity, the Company will showcase to the market what
professional advantages and industrial status a leading new
materials enterprise enjoys as well as its mission of maximizing
shareholder value and maintaining the highest standards of
corporate governance.
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