Chairman’s Statement

Dear Shareholders,

The year 2018 is the 40th anniversary of China’s reform and opening up, and also a year to move forward and achieve leapfrog development for CIMC. Despite the severe economic situations at home and abroad, all major business segments of the Group strived to capture the opportunities brought by market changes by means of vigorously advancing strategic upgrade and business transformation, adjustment to the production capacity allocation, innovation in technologies and business models and management of operational compliance risk, so as to achieve a quality growth.

RESULTS AND PERFORMANCES

In 2018, the Group’s revenue amounted to RMB93.498 billion (2017: RMB76.300 billion), representing a year-on-year increase of 22.54%; the net profit attributable to Shareholders and other equity holders of the Company amounted to RMB3.380 billion (2017: RMB2.509 billion), representing a year-on-year increase of 34.72%; and the basic earnings per share amounted to RMB1.11 (2017: RMB0.81), representing a year-on-year increase of 37.04%.

Based on the Group’s 2018 operating results and taking into full account the Group’s overall financial position, the Board recommended a final dividend of RMB5.5 per 10 shares (including applicable taxes) for the year of 2018, no bonus shares will be issued, and additional 2 new shares will be issued to all Shareholders for every 10 shares being held by way of conversion of capital surplus. The proposed dividend is expected to be payable on or around 30 June 2019.

Container Manufacturing Business:

In 2018, benefiting from the effect of the container sales cycle, container transportation volume increased steadily, customers maintained strong procurement demand for new containers, and the orders reached a historical record. However, due to various factors such as increase in material prices and decrease in container prices caused by intensified competition, the overall profit margin was significantly reduced year-on-year. Nevertheless, benefited from the substantial investment in technological research and development., the intelligent manufacturing and upgrading project for the container segment named after the “Longteng Plan” has achieved initial success. Through intelligence technology, information technology and upgrade and modification of manufacturing process, we will lay a solid foundation for the next leap-forward development of the container industry. In 2018, the independent heat storage and temperature control containers with the characteristics of zero energy consumption and zero pollution began to be used in large scale in Sino-European freight trains, making it the world’s first “black technology”, and has promoted the normalization of winter transportation of Sino-European freight trains.

Road Transportation Vehicle Business:

In 2018, the road transportation vehicle business of the Group continued to carry out the upgrading projects of its intelligent manufacturing in the “demonstrative plants” which was oriented by intelligent manufacturing, and further strengthened its global operation. Benefit from the digitization of factory production processes and the continuous development and improvement of new products and product features, the road transportation vehicle business continued to achieve overall growth. Meanwhile, in order to further expand its business scale, develop its operation and enhance its industrial capability, the road transportation vehicle business of the Group formally submitted the listing application on the Main Board of the Hong Kong Stock Exchange on 27 December 2018. On 14 March 2019, CIMC Vehicles received the Approval on the Issuance of Overseas Listed Foreign Invested Shares of CIMC Vehicles (Group) Co., Ltd. (Zheng Jian Xu Ke [2019] No. 356) from the CSRC, approving the issuance of overseas listed foreign invested shares by CIMC Vehicles, thus making continuous efforts to become the fourth independent listed company following CIMC, CIMC Enric and CIMC TianDa.

Energy, Chemical and Liquid Food Equipment Business:

In 2018, CIMC Enric proactively explored guaranteed supply of natural gas. It realized China’s first south gas to north and river-ocean transport with LNG tank containers through cooperation with CNOOC Gas and Power Group Co., Ltd. (“CNOOC”) and China LGN Group (“China LGN”). The intelligent equipment provides whole-process real-time monitoring services to ensure safety of the first flight. Nantong CIMC Pacific Ocean Engineering Co., Ltd. (南通中集太平洋海洋工程有限公司) has been reorganized smoothly, contributing sales income in 2018, and has recently won the world’s largest LNG refueling vessel order with promising prospect. The “CIMC Tank Container” product of the chemical segment has maintained its number one market position around the world for 15 consecutive years. While further expanding the beer business, the liquid food segment has also successfully developed the equipment market in the industries of craft beer, spirits, juice and pharmaceuticals, achieving diversified sales growth.

Offshore Engineering Business:

In 2018, despite the improvement in the global offshore engineering equipment market, the Group’s offshore engineering business was still in a relatively low stage. However, CIMC Raffles firmly seized the major opportunities of new and old driving factors, achieved breakthroughs in production equipment, and took the leading position in marine fishery and breeding equipment. Its marine amusement business continued to exert its strength, and established a multi-point layout and diversified development path in addition to the traditional oil and gas business. At the summit of the Shanghai Cooperation Organisation (SCO) in Qingdao, the “sea kitchen platform” of the Group was unveiled with a stunning debut. The “Blue Whale No. 1” built by CIMC Raffles won the “5th China Industrial Award”, which is the highest award in the industrial field of China approved by the State Council, representing the highest level of industrial development in China. On 13 June 2018, Chinese President Xi Jinping visited the Yantai base of CIMC Raffles Offshore Limited and learned about CIMC Offshore Engineering’s pursuit of independent innovation development as well as the progress of establishing capabilities in independent design, R&D and manufacture of high-end offshore engineering equipment, and held high expectations for CIMC Offshore Engineering.

Chairman’s Statement (PDF)