ISD Business in Industrial Safety Sector Advanced against Headwinds
ISS Business in Public Safety Sector Made Remarkable Breakthroughs
HONG KONG, March 25, 2014 /PRNewswire/ --
Financial Highlights
Anxin-China Holdings Limited ("Anxin-China" or "the Group," Stock code: 1149.HK), the largest integrated solutions provider of ISD (Intelligent Surveillance, Disaster Alert and Rescue Coordination) systems in China, today announced its results for the year ended 31 December 2013 ("the year under review").
During the year 2013, the Group stumbled in a wavering domestic operating environment. The first half of 2013 saw favorable market conditions fueled by tremendous government support. There were an increasing number of surveillance points, thanks to the Group's market focus shifted to explore new provinces/cities. In the second half of 2013, the PRC market underwent great changes associated with the government's initiative to strengthen internal management and undertake personnel adjustments. As Anxin-China targets government agencies as major customers, its financial performance was inevitably facing downside risks due to delays in government-related projects. For the year ended 31 December 2013, the Group's consolidated turnover dropped 21.0% year-on-year to HK$672 million. Accordingly, gross profit was HK$527 million, representing a decrease of 26.4% when compared with last year. Coupled with increased R&D costs and fair value changes as well as impairment losses on good will for subsidiaries, profit for the year attributable to owners of the Company amounted to HK$370 million, representing a year-on-year decline of approximately 32.6%. The Group's gross profit margin and net profit margin was 78.5% and 55.0%, respectively, outperforming its peers. Eyeing the unfavorable market conditions, Anxin-China attached great importance to maintain a solid financial position. Net cash inflow generated from operations amounted to HK$663 million during the year under review (2012: HK$618 million). Cash and cash equivalents surged 40.7% to HK$2,250 million.
The Board announced payment of a final dividend of HK1.0 cent per share for the 12 months ended 31 December 2013. Together with the interim dividend of HK1.4 cents per share, the annual dividend per share was HK2.4 cents (2012: HK3.6 cents).
ISD Business ("Intelligent Surveillance, Disaster Alert and Rescue Coordination")
In an effort to promote economic development and maintain social stability, China is making great endeavor to improve workplace safety with a total investment amount of RMB625 million. As the largest integrated solutions provider and services operator of ISD systems in the PRC, as well as the one and only ISD solutions provider capable of providing multi-industry ISD systems, the Group is poised to benefit from the unprecedented investment from the national government.
Leveraging on the Group's advanced technologies, high-quality products and premium solution services, the Group was able to strengthen its customer relations and expand operational markets. During the year under review, the Group added nine new monitoring centers in provinces including Hunan Province, Jilin Province, Jiangsu Province and Chongqin City. There was an increase of 6,521 surveillance points in existing and newly tapped monitoring cities. As of 31 December 2013, Anxin-China had established 45 monitoring centers and 29,909 surveillance points in total, and successfully expanded its ISD business across eleven provinces and forty cities/counties.
Meanwhile, in order to diversify the revenue base and therefore mitigate potential risks associated with overreliance on a single customer structure, Anxin-China took the initiative to seek for breakthroughs for its business and develop surveillance products which are applicable in the public safety sector. During the year under review, the Group was eager to explore the elevator intelligent surveillance sector and proposed a groundbreaking business model of providing advertisement distribution channels in elevators to ease capital pressure for elevator monitoring projects. The strategic moves would enable the Group to transform its business mode to a more market-driven one.
ISS Business ("Intelligent Safety Systems")
The construction of "Smart Cities" and "Safe Cities" prevails across the country. Over 180 cities began building themselves into "Smart Cities" in 2013, driving the domestic security surveillance market scale reach RMB 70 billion. According to IDC statistics, the year-on-year growth rate of the domestic video surveillance market will reach 26.05% and 19.69% in 2013 and 2014, respectively.
Anxin-China accelerated its pace to march into the public safety sector and achieved remarkable progress. The Group actively converted the acquisitions of Anxin Mate Holdings Ltd and Shenzhen Hawell Advanced Technology Co Ltd into solid possession, effectuated the integration of advanced intelligent video analysis technologies with high-quality surveillance hardware, and optimized video monitoring product offerings. During the year, a series of HD network cameras, which were independently developed and manufactured by the Group, were qualified by national assessment agencies, strongly suggesting our capabilities to digest, absorb, and reinvent advanced surveillance technologies.
During the year under review, Anxin-China successfully completed trials with several municipal governments, and proceeded to provide integrated ISS systems solutions for "Safe City Projects" in five cities/counties in China, including Dawu County, Honghu City in Hubei Province, Fuquan City in Guizhou Province, Suining County in Jiangsu Province and Dunhua City in Jilin Province. The business model of ISS systems is expected to enter a more mature phase in 2014 and generate synergetic effects by then.
Mr. Liu Zhongkui, Chairman of Anxin-China, said, "Looking back on 2013, Anxin-China was confronted with challenges arising from the ever-changing operating environment. On the other hand, the Group was afforded new opportunities emerging along with the expansion of both its operating markets and customer base. Therefore, we remain cautiously optimistic on the Group's prospects. We continue to stay abreast of market dynamics and have implemented flexible strategies to stay attuned to market updates. We will strive to maintain solid bonds with existing ISD customers for a broadened market share and diversify revenue streams by tapping into non-government surveillance markets such as elevator safety monitoring. We will speed up efforts to build business connections with municipal governments so as to optimize our ISS business model and materialize outcomes. We are determined to benefit from the construction boom of 'Safe Cities'."
"China is currently undergoing a critical economic transformation. The growth trajectory is evolving towards a more balanced, high-quality and sustainable model. Therefore, there are higher expectations and requirements for safety issues in both industrial production and public sectors. The Group, well positioned for an upward campaign, will continuously upgrade its integrated solutions for ISD and ISS systems and strive to maintain a leading position in the safety industry with high-caliber products and services." Mr. Liu concluded.
