HONG KONG, March 31, 2016 /PRNewswire/ --
| Financial Highlights - 2015 Group revenue decreased 24.4% y-o-y to RMB3,429 million; - Titanium alloy segment grew quickly, with a significant increase in revenue up 30.6% y-o-y to RMB173 million, accounting of total revenue increased from 2.9% to 5.1%. - Gross profit decreased 56.9% y-o-y to RMB391 million; - The Board proposed a final dividend of RMB0.0065 per share for the year ended 31 December 2015. |
Tiangong International Company Limited ("Tiangong International" or the "Group"; Stock Code: 826.HK), China's largest high-speed steel (HSS) and a leading HSS cutting tools and die steel manufacturer, today announced its audited consolidated annual results for the year ended 31 December 2015 (the "Year").
In 2015, China's slowing economic growth and the decline in the global average selling price in steel products, led to a fall in in domestic demand of the Group's traditional core segments. In 2015, faced with extremely severe environment of the global economic situation, the Group was committed to maintaining production scale to retain operational competitiveness and profitability. During the Year, total revenue reached approximately RMB3,429million, representing a y-o-y decrease of 24.4%. Revenue from the Group's key business segments fell 30.4% y-o-y to RMB2,385 million, while gross profit dropped 56.9% y-o-y to RMB391 million. Profit attributable to shareholders dropped by approximately 84.3% y-o-y to RMB72.6million. Basic earnings per share was RMB0.033.
Mr. Zhu Xiaokun, Chairman of Tiangong International, said, "China's economic development is undoubtedly affected by the severe global economic doldrums, with HHS and die steel industries both facing a challenging operating environment. Both internal and external unfavourable factors have put pressure on the operation of Tiangong International. Although various economic indicators declined, the Group adopted the overall strategy of moving forward while maintaining steady and stabilizing quality and efficiency, facilitated the establishment of new projects, promoted the Group's brand and international sales of its products in order to expand its market share in overseas markets. In addition, the Group's titanium alloy business achieved significant results during the Year. In 2015, the Group completed a series of key projects, which further elevated the Group's position in the industry, and laid a foundation for the Group's overseas expansion and entry into the field of accurate and high-end HSS and die steel and titanium products. The Group continued its global marketing strategy and established Tiangong Middle East Special Steel Limited in Istanbul, Turkey, signifying the Group's expansion into the Eurasian market and increasing the Group's overseas sales offices to 8. The Group's sales office in Canada has already started operation. The Group will also plan to establish new offices in Mexico, Thailand, and Vietnam to expand the Group's sales base. Also, the Group actively developed new products to meet market's demand and fill the gaps in the domestic market. Being the largest private enterprise in China's titanium industry, Jiangsu Tiangong Technology Company Limited Limited ("Tiangong Technology"; Stock Code: 834549) was successfully listed on the National Equities Exchange and Quotations ("NEEQ"). It is believed that this will help release the Group's corporate value, and provide financing platform for business development."
Among the Group's core business segments, the HSS and die steel operations were the largest contributors to Group revenue during the Year, accounting for 29.7% and 19.8% of total revenue, respectively. Revenue generated from die steel decreased by 38.7% to RMB1,018 million, of which 32.8% stemmed from the domestic market, with export sales accounting for the remaining 67.2%, and export revenue rose 0.9% y-o-y. The decrease of the revenue for die steel segment was mainly due to the decline in domestic revenue. The decrease in domestic revenue was mainly because of the decline in demand and decrease in average selling price in domestic market. Also, the increase in the Group's export sales volume was partially offset by the depreciation in Euro.
In HSS business, as a result of the decline in demand and average selling price in domestic market, revenue decreased by 37.2% to RMB679 million. During the Year, the decline in demand and average selling price in the domestic market caused domestic revenue to decrease by 45.9% to RMB471 million. On the overseas markets, the Group achieved 15% increase in export volume. However, the weakening Euro and the decrease in global average selling price offset the effect on the increased sales volume, resulting in a net decrease in export revenue by 1.1% to RMB207 million.
During the Year, revenue generated from HSS cutting tools dropped 6.5% to RMB514 million. Although the revenue of HSS cutting tools generated from domestic market was affected by the significant decrease in the average selling price, resulting in a decrease in domestic revenue by 11.2% y-o-y to RMB186 million, the average selling price of HSS cutting tools in overseas markets remained relatively stable. The export revenue recorded a slight decrease of 3.6% to RMB328 million.
Titanium alloy segment has been a rapidly developing segment among the Group's products. During the Year, titanium alloy revenue recorded a remarkable increase of 30.6% to RMB173 million. The increase was mainly attributable to the Group's effort in market development by offering a broad range of products in titanium and titanium alloys. The Group will continue to offer a broader range of products with higher grades and specifications to meet demands from various industries.
Looking ahead, Mr. Zhu Xiaokun, concluded, "The Group will continue to implement its strategies set in 2015, and catch up with China's national supply side reform policy, to accelerate the construction of several large-scale facility projects and further strengthen its sales and marketing efforts. The Group will continue to streamline its operation and develop higher end products in order to get prepared for the rebound after rebalancing of the industry. Concurrently, the Group will still continue to extend its overseas sales network in markets such as Canada, Mexico, Thailand and Vietnam, by finding the appropriate trading partners. Also, the Group will seek for appropriate cooperation opportunities to expand the production capacity as well as the upstream and downstream product extension of the Group's star business, titanium alloy segment while focusing on the research and development to advance the production process of titanium alloy pipes, flat sheets, plate and wire. In 2016, Tiangong International will continue to adhere to the highest standards of corporate governance, continue to enhance its brand marketing, R&D, facilities and its expansion in new markets in order to boost the Group's profitability and bring higher returns to its shareholders."
About Tiangong International Company Limited
Tiangong International, (the "Group"; Stock Code: 826.HK), headquartered in Danyang City, Jiangsu Province, is China's largest manufacturer of high-speed steel (HSS) and the leading manufacturer of HSS cutting tools and die steel. It is also engaged in the production of titanium alloy. HSS and die steel belong to the special steel category. Due to its diversity and specialized nature, it is widely used in various industries domestically and overseas, including machinery and equipment manufacturing, vehicle production, railway and the petrochemicals industry. Meanwhile, high-speed steel cutting tools and titanium alloy have wide applications in different sectors, including aerospace, automotive, machinery, electronics, petrochemical processing and other areas such as construction, decoration, agriculture and domestic use.
