【Immediate Release】                                        26 March 2021

 

XINGFA ALUMINIUM HOLDINGS LIMITED

（Stock Code：98.HK）

Announces 2020 Annual Results

Profit attributable to shareholders increased by 26.3% to RMB 765.4 million

Participated in multiple landmark construction projects including Beijing Winter Olympic Stadium, Hangzhou Asian Games Village and Canal Asian Games Park

 

Financial Highlights

RMB million	For the Year ended 31 December
	2020	2019	Change
Revenue	11,886.9	11,280.8	+5.4%
Construction aluminium profiles	9,261.7	8,733.5	+6.0%
Industrial aluminium profiles	2,320.3	2,210.7	+5.0%
All other segments	304.9	336.6	-9.4%
Gross profit	1,629.4	1,489.8	+9.4%
Profit attributable to shareholders	765.4	606.1	+26.3%
EPS (RMB)	1.83	1.45	+26.2%
Gross profit margin	13.7%	13.2%	+0.5 p.p.
Net profit margin	6.4%	5.4%	+1.0 p.p.

 

(26 March 2021 - Hong Kong) Xingfa Aluminium Holdings Limited ("Xingfa Aluminium" or the"Company", together with its subsidiaries the "Group"; Stock code: 98.HK), is pleased to announce its annual results for the year ended 31 December 2020 (the "Year").

 

 

During the Year, the Group's overall revenue increased by 5.4% year-on-year ("YoY") to RMB 11,886.9 million (2019: RMB 11,280.8 million). The sales volume rose by 6.5% YoY from approximately 612,000 tonnes to approximately 652,000 tonnes. Gross profit increased by 9.4% YoY to approximately RMB 1,629.4 million (2019: RMB 1,489.8 million). The gross profit margin was 13.7% (2019: 13.2%) and such an increase was mainly due to proper control over the price of materials with the Company's strict bidding procedures for the procurement of production materials, as well as refined production in the manufacturing process and lower cost per tonne by improving the process continuously. During the Year, the profit attributable to owners of the Company was approximately RMB 765.4million (2019: RMB 606.1 million, representing an increase of 26.3% year-on-year. Net profit margin increased to 6.4% (2019: 5.4%). Earnings per share was RMB 1.83 (2019: RMB 1.45).

 

As the domestic epidemic broke out earlier this year, the Group's domestic orders were postponed as a result of closure of real estate projects. After the resumption of production, the Group gave priority in processing overseas orders and was able to manage the sales decline in the first quarter under control. Since the second quarter, with the outbreak of COVID-19 in China under control within a short period of time, augmented by the rapid recovery of the China economy in the second half year, the domestic orders picked up again and recorded the best monthly sales figures ever. Although the sales price of aluminium profiles and product processing charges decreased slightly due to the impact of market environment, however, the Group's high quality products and quality service standards are widely favoured by customers and the successful growth in sales drove the Group's revenue keep on rising.

 

The Board of Directors recommended the payment of a final dividend of HKD0.36 per ordinary share for the Year (2019: HKD0.28).

 

Construction aluminium profiles - 77.9% of total revenue

 

During the Year, the revenue of construction aluminium profiles increased by 6.0% to approximately RMB 9,261.7 million (2019: RMB 8,733.5 million), and sales volume rose by 6.3% to 502,948 tonnes (2019: 473,305 tonnes). Segment gross profit margin increased by 0.8 p.p. YoY to 13.5% (2019: 12.7%).

 

Industrial aluminium profiles - 19.5% of total revenue

 

During the Year, the revenue of industrial aluminium profile increased by 5.0% to approximately RMB 2,320.3 million (2019: RMB 2,210.7 million), and sales volumes rose by 5.7% to 144,142 tonnes (2019: 136,395 tonnes). Segment gross profit margin increased by 0.1 p.p. YoY to 9.8% (2019: 9.7%).

 

Actively participated in landmark construction projects

 

the Group continued to seek participation in landmark projects and was approved as a lead supplier to provide aluminium profiles for Hangzhou Asian Games Village, Canal Asian Games Park, Beijing Winter Olympic Games arena, Historical Memorial Hall of the Communist Party of China, Sub-center of Beijing, Hangzhou Xiaoshan International Airport, Chengdu Tianfu International Airport, Xiong'an High-speed Railway Station and Shenzhen campus of Sun Yat-sen University, demonstrating that the quality of the Group's products have received high regard of the market.

 

Tapping the industrial aluminium profile market

 

In terms of research and development, the Group is committed to achieving its dual-engine development with construction aluminium profiles and industrial aluminium profiles as the direction based on its market and technological experiences in construction aluminium profile to tap the industrial aluminium profile market. The precision manufacturing base situated at Sanshui Industrial Park in Guangdong Province had already completed during the year, The first automatic backlog machine production line was in trial production on October 25, other production lines will be gradually installed in 2021, and it is expected to commence full production in May 2021. The Group also set up a separate R&D and sales department for industrial aluminium profile by the end of 2020. The Group will develop more industrial aluminium profile products and orders, and strengthen the technology of primary, fine and deep processing. It is expected that 2021 will witness the result of research and development for the first batch of industrial aluminium profile products and it will be expanded along the technology roadmap in the future.

 

Promote digital production upgrade

 

Xingfa is actively carrying out the plan of intelligent production base and digital production management upgrade, so as to improve the Group's production efficiency, risk resistance ability and flexibility in coping with uncertainty. The Group has set up the Project Management Department to undertake intelligent manufacturing functions and to make the production line and production management based on data and digitalisation. In future, we can collect big data to precisely manage and optimise production lines, significantly reduce scrap volume, improve production effectiveness and efficiency, and ensure product quality. Moreover, the Group is also synchronously improving our service, technology and process quality to enhance the overall long-term operating efficiency, increase product mix and improve quality from multiple perspectives in a bid to provide customers with top quality aluminum profiles.

 

Prospects

 

Looking forward to 2021, the PRC government continues to introduce more real estate policies, such as the new regulations of "Dual Concentration" to stabilize market growth. And the government will continue to shift towards stabilized leveraging on the basis of the results achieved in past three years in deleveraging to ensure the debt ratio of real estate enterprises is stable. As the market size of construction aluminium profile remains large, the future development of Xingfa's construction aluminium profile business will no longer be incremental. Instead, the Group will focus more on cost control, improve the management, technology, quality and service standards, and thereby moving towards the goal of pushing profit margin.

 

Mr. Liu Libin, the Chairman of Xingfa Aluminium, stated "We are happy to see the Group still maintained profit growth in this challenging business environment in 2020, which cannot go without the joint effort of all the employees of the Group and the continuous support of shareholders. Looking forward to 2021, the Group will continue working on the fully upgrading and optimization in terms of management, production, research and development and other aspects, with the long-term sustainable development as the goal. The Group will also synchronously improve the service, technology and process quality to enhance the overall long-term operating efficiency, increase product mix and improve quality from multiple perspectives. In addition, we will achieve our dual-engine development with construction aluminium profiles and industrial aluminium profiles, enhance R&D of industrial aluminium profiles and expand the orders. The Group will continue to develop under a balanced approach in both its external business expansion and internal operation efficiency enhancement, so as to bring greater returns to our shareholders and stakeholders."

 

- END -

 

About Xingfa Aluminium Holdings Limited

Xingfa Aluminium Holdings Limited ("Xingfa Aluminium" or the "Company', together with its subsidiaries the "Group") is one of the leading aluminium profiles manufacturers in the PRC, principally engages in the manufacturing and sales of construction and industrial aluminium profiles. In recent years, Xingfa participated various landmark projects, including Beijing Daxing International Airport, Khalifa Tower and Oriental Peral Tower. As the industrial aluminium profile market continues to develop with an expanding profitability, industrial aluminium profiles will be the focus of Xingfa's future development and will help enhance the profitability in the long run.

 

This press release is issued by DLK Advisory Limited on behalf of Xingfa Aluminium Holdings Limited.

 

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