Mar 31, 2020

CIMC business continues to grow despite economic headwinds,

Bizclik Editor
5 min
SHENZHEN, China, March 30, 2020 /PRNewswire/ -- Despite glo...

SHENZHEN, China, March 30, 2020 /PRNewswire/ -- Despite global uncertainties including global economic slowdown and Sino-US trade dispute, China International Marine Containers (Group) Ltd. (CIMC) achieved steady growth of its business in 2019. According to its 2019 annual report released late on March 26, CIMC generated 85.815 billion yuan ($12.1 billion) in revenue. Net profit of the group hit 1.542 billion yuan.

The Shenzhen-headquartered logistics and energy equipment supplier has been making profits for 26 consecutive years since its listing on Shenzhen Stock Exchange in 1994.

By sticking to its development strategy of "transformation and upgrade, high-quality growth", CIMC has demonstrated its strengths in resisting various risks by diversifying its business in different sectors.

Major businesses achieved positive development: output and sales of containers remained the world's first in the industry; vehicle business was the biggest contributor to CIMC's profits, with earnings from the business surpassing container's; revenue from energy, chemical and food equipment business hit a historical high of 15.075 billion yuan; logistics service business generated 9.157 billion yuan in revenue; airport facilities, fire rescue and automatic logistics business generated an annual revenue of nearly six billion yuan.

The group is expected to gain benefits from China's push for construction of "new infrastructure", as it accelerates digital transformation in all its businesses, which has already shown initial progress.

Container and vehicle business remained leading position

Container business generated 20.163 billion yuan in revenue in 2019, with net profit reaching 137 million yuan. The company remained the world's top in terms of output and sales of containers as a result of continuous innovation and business optimization. That came at a time when global orders declined sharply due to sluggish demand and intensifying industry competition led to a significant drop in profit margin. But in the first quarter of 2020, container price has shown signs of growth.

CIMC managed to grasp opportunities in the global market by adopting the strategy of "global operation, local knowledge". Vehicle business contributed 23.335 billion yuan in revenue in 2019. Net profit of the business grew 2.36 percent year-on-year to 1.303 billion yuan.

CIMC retained its position as a global leading semi-trailer manufacturer. In the Chinese market, the company achieved remarkable growth by actively developing environmental-friendly truck body for dump trucks and light-weight durable mixer trucks, as the country pushes forward with environmental protection and overload governance. Sales of light-weight durable mixer trucks has ranked China's first for three consecutive years. Taking advantage of the country's rapidly growing demand for professional cold chain distribution of frozen and fresh food, CIMC also saw fast growth in refrigerated trailers.

In the North American market, revenue from refrigerated trailers business hit record high as the company strengthened local manufacturing and marketing. In Europe, meanwhile, the "LAG" brand, which focuses on producing and selling tank trailers, showed a remarkable enhancement, with its gross profit margin rising to 13.4 percent.

Energy, chemical and food equipment business hit historical high 

Energy, chemical and food equipment business hit a historical high, with revenue growing 6.44 percent year-on-year to 15.075 billion yuan in 2019. Net profit rose 3.33 percent to 818 million yuan.

CIMC Enric Holding Limited, operator of the business, stepped up cooperation with various parties and actively participated in the gas engineering and equipment-related business in 2019. Its clean energy branch, which mainly deals with gas storage and transportation, generated 6.815 billion yuan in revenue, growing over 13.1 percent from a year earlier.

Logistics service, airport facilities, fire and rescue truck business continued to grow

CIMC's logistics service business continued to grow despite a slowdown in the logistics market, generating 9.157 billion yuan in revenue, representing a 6.13 percent year-on-year growth. The company is committed to becoming a multimodal transport leader featuring "equipment plus service".

Airport facilities, fire truck and rescue equipment, as well as automatic logistics system business was a highlight in the company's 2019 annual report, generating revenue of 5.962 billion yuan, a 27.64 percent year-on-year growth. Net profit surged 31.09 percent to 253 million yuan.

CIMC-TianDa Airport Support Ltd, operator of the business, made significant progress in perfecting its fire business in 2019. It acquired a 60 percent stake of German Ziegler Group.

Airport facilities took up a major part of its business. The company secured orders totaling over one billion yuan for making boarding bridges for Chinese and foreign airports. That includes Shenzhen, Chengdu and Kunming airports, as well as foreign airports in Germany and Serbia. It has also developed the world's first intelligent boarding bridge, which is in trial use in the Netherlands' airports.

Automatic logistics system and intelligent parking business also made a big breakthrough. The company won a 360 million yuan order in airport luggage system in India.

Offshore segment promoted transformation

Although business of offshore segment made a profit loss due to industry sluggishness, the company is actively pushing forward with transformation to expand to more diversified businesses, with the aim of achieving a business combination of 50 percent in oil and gas business and 50 percent in non-oil and gas business. Revenue from the business increased 85.59 percent to 4.517 billion yuan.

Financial services helped industries' growth

Finance and asset management business achieved 2.213 billion yuan in revenue in 2019, rising 5.76 percent on a yearly basis. The segment helped promote the group's growth by providing sound financial services.

Industry and city development business saw remarkable growth

Industry and city development business made 1.436 billion yuan in revenue in 2019, while net profit surged 42.91 percent year-on-year to 806 million yuan.

Innovative business and 2020 outlook

CIMC is making great efforts to promote intelligent manufacturing by applying Internet of Things, big data, artificial intelligence and other new technologies. Spending on research and development soared roughly 45 percent in 2019 compared with a year earlier.

The company is also pouring great resources into innovative business of modular construction. The technology has so far been applied in a range of markets, including the United States, Europe, Australia and New Zealand and Hong Kong. 

Looking forward, CIMC will stick to its strategic positioning of "manufacturing plus service plus finance", continue to promote business transformation and upgrade, and extend its business from manufacturing to the service side based on customer demand.

It will continue to enhance its global operating capability, perfect its business and assets, accelerate industry agglomeration and cultivate industry chain advantages. It will promote innovation in the aspects of technological upgrade, business model and management mechanism and strive to control risks.

The company will also ramp up exploring emerging industries and innovative business in order to achieve high quality and sustainable development.

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