CIMC's revenue in 2020 reached 94.2 billion yuan, with both revenue and profit hitting a record high
On the evening of March 29, China International Marine Containers Co., Ltd (hereinafter referred to as "CIMC", stock code: 000039.SZ\2039.HK) officially released its 2020 annual report, disclosing the company's performance in the past year. The report shows that in 2020, CIMC achieved total revenue of 94.159 billion yuan, up 9.72% year on year. The net profit reached 6 billion yuan, of which the net profit attributable to the parent company was 5.350 billion yuan, up 246.88% year on year. The basic earnings per share were RMB1.41, up 281.08% year on year. CIMC announced in the report that the company will pay dividend to shareholders for 2020. The value of each share is RMB 0.28 in cash.
This means that CIMC has continued its record of 27 consecutive years of profits since listing on the A-share market in 1994. At the same time, it is also the 26th cash dividend since the listing, ranking among the top 10 A-share listed companies that has paid dividends the most times, with a cumulative dividend of more than 14 billion yuan.
Revenue and earnings hit record highs and beat expectations
In 2020, the sudden COVID-19 outbreak brought a huge impact on global economic activities. As a globalized transnational group, CIMC has inevitably suffered a great impact. This resulted in a loss of 641 million yuan for CIMC in the first quarter of 2020. Despite the sharp improvement in the second quarter, the first-half results still showed a loss.
As an international group that has been in operation for nearly 40 years, CIMC has experienced many times the fluctuations of the world economy and the ups and downs of the industry. Through strong strategic upgrading and capacity layout adjustment and other measures, it has finally realized a leapfrog development.
In 2020, CIMC acted quickly and decisively. In order to address the impact brought by the epidemic, CIMC quickly established the "Group Decision-Making Committee for Special Period", adopted a series of risk control measures and operational control measures, and resolutely pushed forward the implementation. In this year, CIMC overcame numerous difficulties and stood tests, and finally achieved substantial growth through major measures such as strategic planning optimization, business focus, inefficient asset disposal, and implementation of major strategic themes.
Thanks to various factors such as the control measures implemented by CIMC in the special period and the container market picking up at the end of the third quarter, the performance of CIMC bottomed out and picked up in the middle of the year. The 2020 third-quarter report of CIMC shows that the company's profit has turned positive. By the end of 2020, CIMC's operating cash flow has increased substantially, with both revenue and profit hitting a record high. It also means that CIMC has continued its record of 27 consecutive years of profits since listing on the A-share market. In one of the toughest times in history, CIMC has managed to deliver results for shareholders that exceed expectations.
Main business continues to maintain a leading position and the fourth 10 billion business plate came into being
In 2020, under the strategic theme of "steady operation and quality growth", all the business segments and member enterprises of CIMC made concerted efforts to develop their businesses, actively adapted to the new development pattern, and explored the industry opportunities with advantages and prospects of CIMC in China. Emphasis was placed on expanding the domestic market, while global market opportunities were taken into account. All business sectors actively fought against the impact brought by the epidemic, and finally achieved rapid recovery and steady development.
CIMC continued to expand its major businesses and maintains its leading position in the market. The market share of standard containers and major conventional specific cargo containers in the container sector continued to maintain the first in the world, and the incremental business increased by 53% year-on-year. Special railway containers increased 219% year on year, remaining No.1 in the industry in terms of market share. In the vehicle sector, the company's global sales volume of semi-trailers totaled 131,327 units, up 11.57% year on year, maintaining its global leading position in the industry.
The products of low temperature vehicle, medium pressure vehicle, low temperature tank and vehicle bottles continued to maintain the champion position, and the products of spherical tank ranked first in the country. Tianda Holdings' boarding bridge products have been ranked first in the world for many years. After becoming the largest fire engine group in China, the fire rescue business has achieved full coverage of regions and industries through the integration of domestic and international cooperation. In the logistics sector, the container throughput reached 15 million TEU, continuing to maintain the first in China. The annual inflow and outflow volume of the terminal business reached 5.7 million TEU, still maintaining the first in China under the impact of the epidemic.
In terms of performance data, the container sector of CIMC achieved an operating income of 22.164 billion yuan in 2020, with a year-on-year growth of 9.92%. Net profit for the year reached 1.987 billion yuan, and net profit margin reached the highest level in recent years.
In 2020, the total annual operating revenue of the vehicle sector of CIMC (with CIMC Vehicle as the operating body) reached 26.499 billion yuan, up 13.56% year on year, hitting a record high. The net profit reached 1.269 billion yuan.
In 2020, CIMC's energy, chemical and liquid food equipment business achieved an operating income of 13.292 billion yuan and a net profit of 360 million yuan. The business (with CIMC Enrico as the operating body) was affected by both the industry cyclicity and the epidemic. The global market capacity of chemical tank containers decreased significantly, and the overall performance declined somewhat, but the main products still maintain the leading position in the industry. Clean energy equipment, one of the top three businesses in the sector, achieved revenue of 7 billion yuan, up 2.7 percent year on year.
The airport/fire engine/automatic logistics equipment business (with CIMC Tianda Holding as the operating body) achieved an operating income of 6.089 billion yuan in 2020, up 2.12% year on year. The net profit was 324 million yuan, up 28 percent year on year.
The operating revenue of the logistics sector exceeded 10 billion yuan for the first time in 2020, reaching 10.636 billion yuan, up 16.15% year on year. Net profit reached 266 million yuan, up 140.57% year on year. Logistics service business became the fourth business segment of CIMC with revenue exceeding 10 billion yuan.
Due to the impact of COVID-19, global oil production in 2020 experienced 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 an operating income of 5.425 billion yuan, up 20.12% year on year, although the company was still in the red. The growth in offshore engineering revenue should be attributed to CIMC Raffles' continued efforts to actively promote business transformation and layout. On the basis of consolidating the traditional oil and gas business, it has actively explored the business of maritime cultural tourism, maritime new energy and other aspects, vigorously developed the far-reaching sea fishery and offshore wind power business, and formed a unique business model.
For the implementation of the strategy of "focusing on intelligent logistics equipment", CIMC integrated a number of high-quality enterprises mainly engaged in medium and small logistics vehicle business in the group in 2020, and established the unit vehicle business segment, focusing on providing professional integrated solutions for R&D, manufacturing, leasing, operation and packaging of unit logistics vehicles in the fields of automobile, liquid chemical, rubber and other industries. In 2020, the newly established unit vehicle business of CIMC 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 achieved an operating income of RMB 2.178 billion and a net profit of RMB 312 million. The main operating entities are CIMC Financing Leasing Co., Ltd., CIMC Finance Co., Ltd. and Offshore Engineering Asset Management Platform Co., Ltd.
Expand the domestic market and promote the development of innovative products
In 2020, CIMC's major businesses maintained a competitive advantage in the global mainstream market. It actively integrated into the new development pattern of "dual circulation" of the country, strengthened the business development and product innovation in the domestic market, and constantly made new breakthroughs. The percentage of revenue from the domestic market was on the rise.
In 2020, CIMC achieved revenue of 56.729 billion yuan in the Chinese domestic market, with a year-on-year growth of 25.18%, accounting for 60.25% of the total revenue, which was higher than the 52.81% in 2019. This shows that domestic business revenue is rising rapidly.
CIMC has intensified its efforts to develop the domestic market and made new breakthroughs in business development and product innovation. For example, the Qingdao refrigerated containers and air containers have obtained airworthiness certification from the Civil Aviation Administration of China, which has broken the monopoly of European and American enterprises on this product and filled the domestic gap in this field. CIMC Nantong has successfully delivered the Qinghai Full Integrated Energy Storage Project, which indicates that the sector has the full integrated delivery capability of the product. Yangzhou Tonglee has successfully developed and put into use the "storage and transportation cabin for vaccines by sea, land and air", which solves the global problem of ultra-low temperature storage and transportation of vaccines.
CIMC has further enriched and developed its high-end manufacturing system by upgrading product module, improving lighthouse factory, launching marketing reform and promoting organizational development. The business has pushed hard on product development that fits into the "big domestic circulation" and launched a succession of new models. In the energy sector, CIMC tank lining processing workshop has been put into trial production to promote the localization of the chip semiconductor industry and the development of domestic 5G technology. The food-equipment business has successfully acquired McMillan of the UK, filling a gap in distillery engineering. As for the hydrogen energy business, it has established cooperation intentions or signed strategic agreements with a number of partners, including Hexagon of Norway and Baowu Steel Group.
Civil Aviation XieFa, a subsidiary of TianDa Holdings, successfully delivered the world's first two-way driving pure electric ferry vehicle and the world's first pure electric food truck. In the logistics sector, more than 20 international and domestic railway trains have been successfully opened, including lines from Xiaogan to Northeast China and Xuzhou to Moscow, etc. Container yards have been built in Thailand, Malaysia and Ningbo and more than ten storage yard outlets, such as Lanzhou Railway Yard, have been constructed. In the offshore industry sector, a new round of first-generation products such as wind power jacket, booster station and high-end deep-sea fishery equipment have been delivered, accumulating new business implementation capacity.
Capital operation promotes strategic layout, and innovative business maintains a good momentum
On December 18, 2020, Shenzhen Capital became a strategic shareholder of CIMC, holding a total of 29.74% of CIMC shares and officially becoming the largest shareholder of CIMC. This equity transfer is the most significant change in the equity structure of CIMC since it went public in 1994. It is a milestone in the development history of CIMC and has great significance for the future development of CIMC. Although the equity change happened, the long-term governance structure with mixed ownership of CIMC has not changed, and the operation mechanism of CIMC remains market-oriented.
Capital operation of CIMC closely connects to Shenzhen and CIMC's own strategic layout services. On the one hand, Shenzhen SASAC, through Shenzhen Capital Group, took a stake in CIMC, which has further improved the layout of Shenzhen in marine economic development and high-end manufacturing in the fields of logistics and energy equipment. On the other hand, starting from Shekou in Shenzhen, CIMC has gone global. The investment of Shenzhen Capital has strengthened the connection between CIMC and the SASAC of Shenzhen, which will help CIMC make contributions to the construction of Shenzhen's "dual districts" with the help of the new shareholders, and promote CIMC to make greater breakthroughs in the new development pattern of the "dual circulation" of China.
In addition to the adjustment of the ownership structure of CIMC, various business segments and enterprises under CIMC have also taken a lot of measures in terms of capital operation, such as going public and attracting strategic investment. Various business segments and enterprises have actively optimized resource allocation through the capital market, and explored the transformation and upgrading and high-quality development of traditional manufacturing with the help of the capital market. This has promoted the relevant business segments and enterprises to integrate business structure, improve operating efficiency, relieve financial pressure, broaden financing channels and optimize corporate governance.
For example, CIMC Industry & City Development has carried out the second introduction of strategic investment through the capital increase of Country Garden and the strategic investment of Qujiang Cultural Industry Investment. CIMC's stake in the company was reduced to 45.92 per cent, and CIMC Industry & City Development has become an associated company of CIMC. The successful introduction of strategic investment by CIMC Industry & City Development has enriched its net assets and cash flow, which is conducive to accelerating the rapid development of the company and helping it win a larger market share in the industry market competition. The introduction of strategic investment by CIMC Industry & City Development is also one of the important actions of CIMC to promote the implementation of the development strategy of "high-quality growth" and "business focus".
CIMC Vehicles was officially listed on the Hong Kong Stock Exchange in July 2019. In 2020, CIMC applied to be listed on the Growth Enterprise Market of Shenzhen Stock Exchange. Its application has been approved by the Growth Enterprise Market Listing Committee of Shenzhen Stock Exchange and is now awaiting registration with the China Securities Regulatory Commission.
CIMC Enric's subsidiary, CIMC Tank, has received approval from the Hong Kong Stock Exchange for the proposed spin-off and is also planning to be listed independently on the A-share market.
In early October 2020, CIMC began to privatize CIMC Tianda through a contractual arrangement way. On January 25, 2021, CIMC Tianda officially withdrew from the listing status of the Hong Kong Stock Exchange.
In addition to the equity adjustment and capital operation of the Group and its major business sector enterprises, the innovative enterprises of CIMC have also made great breakthroughs in this regard. A number of innovative enterprises under CIMC have been recognized by external market investment continuously, and the introduction of strategic investment has achieved initial results. For example, the three innovative enterprises of CIMC Cold Chain Technology, Jiangsu Trailer Leasing and CIMC Fine PE have successfully introduced external strategic investors and greatly increased the equity value of relevant innovative enterprises.
In regard of cold chain business, the innovative enterprises launched by CIMC in recent years have maintained a good momentum of development. Among them, CIMC's cold chain technology business performed strongly, gradually covering the "first" and "last" kilometer of the cold chain logistics industry. CIMC Cold Cloud, a subsidiary of CIMC Fine PE, has completed the temperature controlled transportation of the coronavirus vaccines at home and abroad with high standards, and has become one of the first key contact enterprises of coronavirus vaccine transportation announced by the Ministry of Communications. Little Flying Fish has become the only designated partner of JD Logistics Southeast Asia Cold Chain.
In 2020, the innovative business of CIMC showed a good momentum of development, and the total revenue of the Group and the innovative enterprises in various sectors has achieved a significant growth. In addition to the cold chain business, the sales revenue of CIMC's modular building (including the design institute) doubled, returning to profit from a year earlier. CIMC TongChuang/Huijie, CIMC Security, Jiangsu Trailer Leasing, CIMC Blue and other innovative enterprises have also made great progress.
Looking back at 2020: CIMC has formed a multinational industrial cluster focusing on logistics and energy industries
According to the report, CIMC has formed an industry cluster focusing on key equipment and solutions for the logistics and energy industries through business expansion and technology development.
First of all, in the field of logistics, CIMC insists on taking container manufacturing as the core business, road transport vehicle business as the extension, airport, fire engine and automatic logistics equipment business as the expansion, and logistics service business as the support. At the same time, the unit vehicle business has also been developed to jointly provide first-class products and services for the modern transportation logistics.
In the energy industry, on the one hand, CIMC has developed energy, chemical and liquid food equipment business based on land energy. On the other hand, it has attached importance to marine energy and carried out offshore engineering business, including the development of traditional offshore oil and gas and offshore renewable energy.
In 2020, CIMC adhered to the strategic theme of "sound operation and quality growth", focused on logistics and energy industries, optimized business combination, cleaned up inefficient assets, and improved asset income level to pursue high-quality business development. With strengthening scientific and technological innovation, product intellectualization, business model innovation and other measures, the comprehensive competitive strength of the enterprise has been comprehensively improved, and the brand value of CIMC has also been continuously improved, ranking the 118th in the Fortune China Top 500. While accelerating quality growth, CIMC focuses on business opportunities of domestic demand, service and innovation, and witnesses a successful end to the year 2020.
Blueprint for 2021: embark on a new journey of "starting a new undertaking" and achieve sustainable high-quality growth
According to the report, CIMC will adhere to the strategic positioning of "manufacturing + service + finance" in 2021, continue to push forward business transformation and upgrading, insist on the customer-oriented principle, extend from manufacturing to service, focus on the main businesses, and optimize the industrial structure. CIMC will also continue to enhance its global operations capabilities, optimize its businesses and assets, accelerate industrial aggregation and foster industrial chain advantages. In terms of technology upgrading, business model and management mechanism, it will continue to innovate and control risks. Through the efforts of grasping the market changes and arranging emerging industries and innovative businesses, the enterprise will achieve sustainable high-quality growth.
The year 2021 marks the 100th anniversary of the founding of the Communist Party of China. This year is also the beginning year of China's 14th Five-Year Plan and the beginning year of CIMC's new journey of "starting a new undertaking". With Shenzhen Capital becoming a shareholder of CIMC as a new starting point, CIMC is in a critical period of transformation, upgrading and defining new strategic planning.
In 2021, CIMC will seize the historic opportunity of the construction of "dual districts" in Shenzhen, adapt to the new development pattern of "dual circulation" in China, respect the times, maintain a sense of awe to the market, and explore the potential of the domestic market. It will carry forward the Shenzhen spirit of being innovative, pioneering and hard working, resolutely implement the business-oriented development mode, comprehensively improve the performance completion rate, and continue to provide CIMC wisdom and solutions to global clients with proactive thinking and quick actions.