• Revenue amounted to approximately RMB6,283.1 million, representing an increase of 12.4%
over the same period last year
• Gross profit amounted to approximately RMB1,401.4 million, representing an increase of
approximately 30.3% over the same period last year
• Profit attributable to the shareholders was RMB604.8 million, representing an increase of
approximately 26.1% over the same period last year
• Recommended the payment of a final dividend of HK$0.2 per ordinary share
(31st March 2021——Hong Kong)The board (the “Board”) of directors (the “Directors”) of Prinx Chengshan (Cayman) Holding Limited (the “Company” or “Prinx Chengshan”; Stock code: 1809) and its subsidiaries (the “Group”) is pleased to announce the annual results of the year ended December 31, 2020 (the “Year” or “Reporting Period”).
During the Reporting Period, facing the impact of the 2019 coronavirus disease pandemic (the “Pandemic”), Prinx Chengshan continued to center on production and operation, stood up to the adverse trend and adapted itself to the changes, managing to maintain a strong development momentum in the face of crises and challenges, and achieving the improvement in “quality” and growth in “quantity”. The annual operating revenue was approximately RMB6,283.1 million, representing an increase of approximately 12.4% over the same period in 2019. The gross profit was approximately RMB1401.4 million, representing an increase of approximately 30.3% and the net profit was approximately RMB604.7 million, representing an increase of approximately 26.1% over the same period in 2019.
During the Year, Prinx Chengshan sold approximately 15.1 million sets of tires, representing a year-on-year increase of approximately 22.4%. Among them, the sales volume of all steel radial tires was approximately 6.4 million sets; the sales volume of semi-steel radial tires was approximately 8.1 million sets; and the sales volume of bias tires was approximately 0.6 million sets; accounted for approximately 75.2%, approximately 22.0% and approximately 2.8% of the total revenue of the Group, respectively. In terms of sales classified by channels, the revenue from sales to domestic distributors, international distributors, automobile manufacturers and private label customers were RMB1,947.2 million, RMB2,359.9 million, RMB1,747.9 million and RMB228.2 million and accounted for approximately 31.0%, 37.6%, 27.8% and 3.6% of the total revenue of the Group respectively.
Prinx Chengshan enjoys a relatively high penetration rate in the replacement market for all steel radial tire in the PRC. During the Reporting Period, Prinx Chengshan started cooperation with 39 new domestic distributors and the number of five-star stores increased by 148, further uplifting the market share of the Group in the domestic replacement market for all steel radial tires. In terms of the international market, with the outbreak of the Pandemic in the first half of 2020, Prinx Chengshan’s international marketing team made predictions in time, strived to capture international orders, and stepped up delivery efforts. The Group also made every effort to explore new markets and new customers. Benefited from the full resumption of work and production in the PRC in the second half of the Year, orders from overseas continued to increase, laying a solid foundation for the Group to achieve outstanding performance.
During the Year, Prinx Chengshan continued to improve its market competitiveness and the loyalty of channel customers by enhancing its business cooperation with automobile manufacturers. The Group cooperated with more than 30 automobile manufacturers in 45 supporting projects and achieved progress as expected. After becoming the supporting manufacturer of the world’s first “5G + intelligent driving” project of SAIC Iveco Hongyan Automobile in 2019, Prinx Chengshan provided BYD Company Limited with the supporting facilities for new energy commercial vehicles for the first time during the Reporting Period, and cooperated with JAC Motors in technology development for the first time, marking the Group’s involvement in new models and new specifications. Moreover, the “Prinx” brand entered the supporting system of Jiangling Motors Corporation (JMC) for the first time, and provided supporting services for Zhengzhou Nissan, a Sino-foreign joint venture, for the first time. The Group has entered the supporting systems of all the top ten commercial vehicle manufacturers in terms of domestic sales volume. During the Year, the Group won the honors and awards of “Outstanding Supplier” by JMC, “Win-Win Cooperation Award” by Foton Motor, “Excellent Strategic Cooperation Supplier” by Dongfeng Vasol, and “Quality Contribution Award” by JAC Group.
During the Reporting Period, Prinx Chengshan’s first overseas production base - the Tire Production Base in Thailand, which was part of the Group’s international advantageous deployment, commenced production as scheduled. The management team overcome the difficulties caused by the Pandemic, and, in the fourth quarter of 2020, the phase I project reached the annual production capacity of 0.8 million sets of all steel radial tires and 4 million sets of semi-steel radial tires, respectively, marking a solid step of Prinx Chengshan towards the target of global development. Based on the forecast of sales demand, Prinx Chengshan expects that the factory in Thailand will experience excessive demand. Therefore, the Group launched the phase II project of 1.2 million sets of all steel radial tires per year in Thailand in the second half of 2020, and intended to launch the phase II project of 4 million sets of semi-steel radial tires per year in Thailand in the first half of 2021, which are expected to be completed and put into production in the fourth quarter of 2021/first quarter of 2022, thus contributing to the development of overseas markets such as North America and Europe. Meanwhile, the Group initiated the capacity expansion project of Prinx Chengshan (Shandong) Tire Co., Ltd. in the second half of 2020, which is expected to increase the production capacity of the factory in Shandong by 1.05 million sets of all steel radial tires per year and 2.8 million sets of semi-steel radial tires per year. The expansion project is currently progressing in an orderly manner and is expected to be completed and put into production in the fourth quarter of 2021.
Looking forward to 2021, the external environment will be complex and volatile with both opportunities and challenges. The Group will focus on the main business of tire products, while optimizing the business arrangement to continue to promote the construction of the phase II project of the Tire Production Base in Thailand and the expansion project of the factory in Shandong, and focusing on the coordinated development in terms of speed and efficiency. In the face of various uncertainties in the industry, the Group will resolutely adhere to a customer-oriented philosophy and strive to create value for customers; maintain effective capital investment; exert greater efforts on innovation; strengthen culture and talent construction; and enhance the core competitiveness of the Company.