CIMC Group released the 2023 Annual Report: tackling difficulties and improving quality while maintaining stability to accelerate the formation of new quality productive forces (27 March)

In the evening of 27 March, CIMC Group released its 2023 annual results announcement. According to the announcement, CIMC Group recorded revenue of RMB127.81 billion and net profit of approximately RMB1,863 million in 2023. Although the overall operating results were affected by the cyclical fluctuation of its principal businesses, the market demand of its various businesses gradually picked up in the second half of the year.

In terms of core business, CIMC Group went through the cyclical downturn of the container manufacturing business, realized steady operation and quality growth, and enhanced the operational level of product digitalization and intelligent manufacturing; the offshore engineering business significantly improved its operating performance, and a balanced business layout in traditional oil and gas and new energy sources was formed; higher achievements were made in the road transportation vehicles business; the energy, chemical and liquid food equipment business benefited from the global growth in demand for clean energy, with orders in hand reaching a record high; both revenue and performance of the airport facilities and logistics equipment, fire safety and rescue equipment increased.

Overseas and domestic revenues remained balanced at about 50% each

In 2023, CIMC Group continued to increase the participation in the international industrial and supply chain, and captured opportunities to export electric vehicles, solar batteries and lithium batteries overseas, realizing the structural growth of overseas business. For example, equipment manufacturing products, such as special frame containers, PCTCs, brackets for NEV containers and recycling transporting packages for power batteries, contributed to the export of domestic NEVs; products with integrated energy storage system delivered in mass volume to overseas customers. CIMC Group continued to explore project opportunities in Europe, America and Southeast Asia.

Meanwhile, CIMC Group continued to provide logistics and transportation services for leading PV enterprises, to facilitate customers to guarantee the safety of the overseas supply chain of PV modules.

At the same time, CIMC Group actively developed regional markets and local manufacturing industry by early establishing overseas manufacturing bases in over 20 countries and areas, mainly in Europe, America and Southeast Asia, and keenly capturing new opportunities in regional market development, product iteration and upgrading, to further enhance the capability to meet overseas demands.

Committed to manufacturing with multiple products continuously ranking global No.1 

In 2023, CIMC Group remained committed to manufacturing, and achieved steady growth across its multiple business segments. 

CIMC Group went through the cyclical downturn of the container manufacturing business, and realized steady operation and quality growth. The standard dry container market of the container manufacturing business has seen a stabilized recovery since the second quarter of 2023, achieving net profit of RMB1.794 billion throughout the year, significantly surpassing the historical cyclical low level. 

During this period, CIMC Group proactively adjusted its container manufacturing business strategies in response to the changing business conditions, increasing revenue while reducing expenditure. On one hand, faced with shrinking orders and declining prices, it enhanced its intelligent manufacturing capabilities, comprehensively optimized its operations, improved efficiency and reduced costs to further strengthen its fundamental management while ensuring product quality, thus maintaining its leading position in comprehensive competitiveness in terms of quality, cost, and efficiency. 

On the other hand, CIMC Group successfully captured market opportunities in the areas of trucking containers, self-loading and unloading containers, and special railroad containers in 2023 by continuously strengthening product and technical innovation and addressing pain points in the market and industry, which enabled the container manufacturing business to sustain high growth in incremental business segments, further solidifying and expanding its business development. 

In terms of the road transportation vehicles segment, CIMC Vehicles recorded RMB1.553 billion of net profit attributable to the shareholders of the parent company after deducting non-recurring profit or loss, representing a year-on-year increase of 69.68% with its gross profit margin improving to 18.96%. After launching its third venture in 2023, CIMC Vehicles focused on intercontinental operation, with all business segments delivering remarkable results. The overseas market defied the trend with a 7.67% year-on-year increase in revenue, and each of its North American and European operations saw an improvement in gross profit margins. 

In terms of energy, chemical and liquid food segment, CIMC Enric achieved operating revenue of RMB23.63 billion in 2023, representing a year-on-year increase of 20.5%, with its gross profit margin of 15.7%. It maintained a leading position both domestically and internationally in its core businesses, with its chemical tank containers continuing to dominate the global market. Its revenue from the clean energy segment grew by 40.8% year on year to RMB14.91 billion, of which revenue from the hydrogen business amounted to RMB700 million, representing a year-on-year increase of 59.0%. Its annual orders in hand hit a new high of RMB22.85 billion, up 29.8% year on year. 

During the reporting period, CIMC Enric continuously secured orders for 20 liquefied gas carriers, clean energy-powered vessels and refueling vessels, and built medium-sized liquefied gas carriers for the first time, which matched the transportation demand for liquid ammonia carriers and were expected to become the backbone of clean energy transportation. 

The offshore engineering business recorded remarkable results in its strategic transformation, and the offshore oil and gas and ship production capacity continues to be put into operation, with the revenue scale exceeding RMB10 billion for the first time, which is the best result in history. Benefiting from the recovery of offshore oil and gas demand and the growth in demand for new offshore energy, the gross profit margin increased from 6.87% to 9.30%, and the net loss was significantly narrowed to RMB31 million; among them, Yantai CIMC Raffles Marine Technology Group Co., Ltd., the main operating entity of the offshore engineering business, has already achieved profit in 2023.

During the Reporting Period, newly signed orders amounted to RMB1,630 million, including two oil and gas module projects, three wind power installation vessels, five ro-ro vessels and other clean energy orders. By the end of 2023, the value of cumulative orders held in hand increased by 35% year on year to USD5.4 billion. The oil and gas business, wind power installation vessels and ro-ro vessels accounted for about 4:3:3.

In the fields of airport facilities and logistics equipment, fire safety and rescue equipment business, CIMC TianDa realized revenue of RMB6.961 billion, with an increase in net profit by 12.58% year on year. During this year, various large-scale logistics projects were completed, including the automatic sorting center of phase 2 of JD Group’s Kunshan Asia No.1 Intelligent Logistics Park, the first “multi-layer structure and intelligence” international cargo terminal at the east area of Hangzhou Xiaoshan International Airport in China, the IKEA Foshan logistic distribution center and other projects.

Especially, the successful application of the world's first remote driverless boarding bridge at Chengdu Tianfu International Airport (L4 boarding bridge) in 2023, not only leads the development of the intelligent high-end airport equipment market, but also marks a milestone for the whole industry, which further strengthened the leading position of CIMC Tianda in the industry.

In terms of logistics service business, relying on the advantage of “equipment + technology”, CIMC Wetrans continued to consolidate the market, optimize the global network and establish an integrated multimodal transport product matrix that combines “river, sea, land, rail and air” transportation modes, actively explore to provide efficient, low-carbon and visual logistics services for customers. During the Reporting Period, CIMC Wetrans first ranked Top 5 of the “Comprehensive list of freight forwarders and logistics enterprises” released by the China International Freight Forwarders Association.

With Sufficient Clean Energy Orders and Surging Green Power

As the global industries accelerate towards a sustainable future, CIMC Group is becoming a leader in promoting green transformation of the industry by further increasing the supply of green energy solutions to the market in 2023.

In LNG and LPG business fields, benefiting from policy support, the recovery of natural gas consumption and stable LNG price, all segments along the industry chain achieved a solid growth, especially the significant growth of applications in downstream terminals. The cost-effectiveness of natural gas heavy trucks was highlighted, and orders for LNG vehicle cylinders of CIMC Enric surged.

In the fields of the hydrogen energy business, CIMC has led the industry in making breakthroughs in the technology of liquid hydrogen tanks and liquid hydrogen tankers, set up joint ventures with various enterprises to conduct coke oven gas-to-hydrogen LNG cogeneration projects, and contributed to the operation of the first hydrogen refueling station and hydrogen bus in Hong Kong.

In the fields of offshore wind power and offshore photovoltaic, CIMC Raffles delivered “Boqiang 3060 (博强3060)”, the latest generation of offshore wind power installation vessel in China, which becomes another “important tool” for the development of offshore wind farms in China. CIMC Bluewater’s methanol fuel supply system has obtained the Approval-In-Principle (AIP) certificate for the methanol fuel supply system from the Det Norske Veritas (DNV). CIMC Pacific Offshore Engineering (中集太平洋海工), a subsidiary of CIMC Enric, has successfully delivered the first 5,500 m3 liquid ammonia tanker, marking another breakthrough of CIMC in the field of new material and new technology.

In terms of new energy storage, CIMC established a joint venture with Powin, a leading player in the United States, to provide global customers with high-quality electrochemical energy storage solutions catering to the integration of the industrial chain, thus achieving a rapid increase in business scale.

During the Reporting Period, nine new enterprises of CIMC were rated as national green factories. With its continuous efforts and outstanding performance in the field of green and low carbon, CIMC has been selected as one of the "Top 100 Chinese Enterprises in Sustainable Development" for five consecutive years, and tied to the first place in 2023.

Advancing the development of new quality productive forces driven by technological innovation and digital transformation

During the two sessions of the National People’s Congress for the year, "advancing the development of new quality productive forces" was written into the government work report for the first time, and was listed as the first among ten major tasks in 2024. As an industry leader, CIMC Group is actively practicing this important concept with its forward-looking strategic layout.

The year 2023 marks the start to implement the new vision and new five-year strategic plan of CIMC Group. Scientific and technological innovation is the primary and central driving force for achieving CIMC Group’s strategic objectives, and plays a pivotal role in the Group’s overall development. During the Reporting Period, CIMC Group invested approximately RMB2,440 million in R&D, and was selected as one of the "2023 Global Open Innovation Top 100" for the first time. 13 enterprises of CIMC were awarded as national "Little Giant" enterprises with the features of specialization, refinement, uniqueness and innovation, and there are now 6 MIIT Single-Discipline Champion Enterprises (Products) in the Manufacturing Industry.

CIMC Group continued to break through overseas technological monopolies in the field of science and technology, and promoted domestic substitution to contribute to the development of the national manufacturing industry. During the Reporting Period, CIMC successfully delivered the first domestic FPSO (floating production storage and offloading) upper core module EPC project, the first semi-submersible offshore floating photovoltaic platform project in China, and the “Jilin I (集林一号)” project, the first offshore floating photovoltaic platform project in the world that is made of bamboo-based compound material. At the same time, “CIMC Femtosecond (中集飞秒)” delivered the first batch of intelligent welding robots to the leading steel structure enterprises in China.

With regard to intelligentisation-oriented innovation, CIMC continued to increase its investment in promoting the construction of intelligent manufacturing factories and the integration of informatization and industrialization. Qingdao CIMC Reefer Container was selected as one of the national-level “Demonstrative Intelligent Manufacturing Factories”, realizing a high automation rate; and Ningbo CIMC built China’s first 5G fully-connected factory in the container industry, which was selected as one of the “future factories” in Zhejiang Province, setting up a digitalization benchmark for the industry. By the end of 2023, CIMC Group has had 1 national and 14 provincial intelligent manufacturing factories.

Looking ahead to 2024, based on the first-mover advantage of the global operating platform, CIMC Group strives to enhance its return to shareholders and realize the mutual enhancement of the value of the Company and shareholders by following the guidance of national policies, intensifying the implementation of the strategic theme of “accelerating the construction of new growth drivers and focusing on promoting high-quality development” and coordinating the reasonable growth of “quantity” and the effective improvement of “quality”.