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Prinx Chengshan(1809.HK) Announces 2021 Unaudited Annual Results

Date:2022-03-31    views:396

PrinxChengshan Announces 2021Unaudited Annual Results

Remarkable Results in Continuous Expansion of ProductionCapacity and Diversified Channel Layout

Promoting the transformation and upgrading of “intelligent” manufacturing in the field of passenger car tires


Results Summary:

• Operating revenue for the year was approximately RMB7,537.2 million,an increase of approximately20.0% YOY;

• Annual sales volume of tires reached approximately18.6 million units, an increase of approximately23.2% YOY;

• Gross profit was approximately RMB1,055.6 million, a decrease of approximately24.7% YOY;

• Profit attributable to shareholders of the Company was approximately RMB292.8 million, a decrease of approximately51.6% YOY.


(30 March 2022, Hong Kong) PrinxChengshan Holdings Limited (hereinafter referred to as the“Company”, together with its subsidiaries, the “Group”; Stock Code: 1809.HK) announces its unaudited annual results for the year ended 31 December 2021 (the “Reporting Period”).


Benefiting from the successful operation of the production base in Thailand and the expansion of the Group’s scale in the passenger vehicle tire market, the Group’s total revenue increased by approximately20.0% to approximately RMB7,537.2 million. The gross profit of the Group decreased by approximately24.7% to approximately RMB1,055.6 million due to the significant increase in raw material prices and ocean freight rates, which dragged down the gross profit of the Group. Affected by the decline in gross profit margin, the profit attributable to shareholders of the Company was approximately RMB292.8 million, representing a decrease of approximately51.6% YOY.


The first phase of the tire production base in Thailand has been put into full operation in 2021, and the production volume, quality and manufacturing costs have all reached the expected targets.Meanwhile, the Group further explored domestic and overseas markets and gradually increased its market share, which led to an increase of approximately23.2% in the sales volume of the Group’s tires to approximately18.6 million units, of which the sales volume of all steel tires and semi-steel tires increased by approximately3.0% and42.9% YOY, respectively. Relying on the advance layout in the North American market and the expansion of advantageous production capacity, the Group’s diversified layout of sales channels has achieved remarkable results. During the Reporting Period, revenue from domestic and international distributors amounted to approximately RMB2,043.0 million and RMB4,010.9 million, representing an increase of4.9% and70.0% YOY, respectively.


• Driving development with technological innovation and continuously increasing R&D investment

The Group relies on innovation platforms such as national enterprise technology centers and post-doctoral workstations to conduct product development and process improvement, improve the performance of existing products, and at the same time develop technologies for future products to add impetus to the Group’s sustainable development. On the basis of PLM (product lifecycle management platform), connecting ratory Information Management System (LIMS), theGrouphassuccessfully shortened the cycle time from tire design to production, accelerated the design, production and launch of products to the market, and achieved a success rate of over 95% in new product development.


• Brand renewal and in-depth promotion of innovative sales model

During the Reporting Period, the Group clarified the corporate positioning of “China’s new manufacturing of tires” and the main development axis of “green, intelligent, international and branded”, and formulated the brand strategy for the next three years: combining internationalization with localization, multi-brand and differentiated development. Its four major brands under the Group, namely Chengshan, Prinx, Austone and Fortune, have also completed system renovation.


The Group “Zhianda”model is a service brand to promote full-process solutionsfor the commercial vehicle after-sales market. Taking truck and bus tire leasing as the entry point, the effective application of intelligent technology can improve the tire safety and operation efficiency of fleet customers, and reduce the comprehensive use costs of customers.Through the “Zhianda Model”, the Group has developed its business in the Yangtze River Delta, the Pearl River Delta and the Bohai Rim regions. During the Reporting Period, the innovative sales model has achieved remarkable results, and the number of customers and service income have increased steadily by38% and40% YOY, respectively.


• Forging ahead and expanding production capacity

The expansion project of the Shandong tire production baseis expected to gradually reach the designed capacity in the first quarter of 2022. The phase II project of the Thailand tire production base is also expected to gradually reach the designed capacity in the first quarter of 2022, helping the Group to further explore overseas markets such as North America and Europe. Meanwhile, the Group is preparing for the establishment of the Anhui tire production base, the second production base in China, to upgrade intelligent manufacturing, focus on the needs of new energy users, and enhance manufacturing competitiveness.


Looking forward to 2022, the volatility caused by the pandemic and geopolitical crisis will continue, and the business environment will be severe and complicated. Benefiting from the expected improvement in the efficiency of the global supply chain, the price of upstream raw materials will stabilize, and the new energy sector will grow vigorously. To further increase the market share in the passenger vehicle tire market, the Group will seize the opportunity to launch the passenger vehicle brand plan, carry out channel upgrades and further optimize itsstructure. Meanwhile, the Group will continue to promote the construction and operation of the phase II project of the Thailand factory, to improve the supply capacity of overseas production bases and expand itsmarket share in the European and American markets. In addition, the Group will continue to increase investment in fleet services and tire recycling to strengthen the Company’s sustainable development capability.