SHENZHEN CHIWAN WHARF HOLDINGS LIMITED ABSTRACT OF THE 2013 ANNUAL REPORT

Transcription

1 Stock code: / Stock abbreviation: Chiwan Wharf A / Chiwan Wharf B Announcement No.: SHENZHEN CHIWAN WHARF HOLDINGS LIMITED ABSTRACT OF THE 2013 ANNUAL REPORT 1. Important reminders This abstract is based on the full text of the annual report. For more details, investors are suggested to read the full text disclosed at the same time with this abstract on the website of Shenzhen Stock Exchange or any other website designated by China Securities Regulatory Commission. The Annual Report is written in both English and Chinese. In case of any discrepancy between the two versions, Chinese version prevails. According to certain regulations issued by China Securities Regulatory Commission, the Company needn't to prepare Financial Statements under International Financial Reporting Standards, and thus all the financial data disclosed in this report were prepared under Chinese Accounting Standards. Company profile: Stock abbreviation Chiwan Wharf A, Chiwan Wharf B Stock code , Stock exchange listed with Shenzhen Stock Exchange For contact Company Secretary Securities Affairs Representative Name Ms. Bu Dan Ms. Hu Jingjing Tel Fax cwh@cndi.com cwh@cndi.com 2. Financial highlights and change of shareholders (1)Financial highlights Increase or decrease of this year over last year Unit: RMB Total operating income 1,780,774, ,783,846, % 1,708,136, Net profit attributable to shareholders of the parent Net profit attributable to shareholders of the parent after extraordinary gains and losses ,894, ,103, % 505,645, ,469, ,592, % 505,629, Net cash flows from operating activities 897,178, ,472, % 746,190, Basic EPS (RMB Yuan/share) % Diluted EPS (RMB Yuan/share) % ROE (%) 13.26% 13.15% 0.11% 15.19% As at 31 Dec As at 31 Dec Increase or decrease of this year-end than last year-end As at 31 Dec Total assets 7,346,529, ,781,130, % 6,540,228, Tatal shareholder s equity attributable to equity holders of the parent 3,947,846, ,678,032, % 3,467,796,

2 (2) Shareholdings of the top 10 shareholders Abstract of the 2013 Annual Report of Shenzhen Chiwan Wharf Holdings Limited Total number of shareholders at the end of the reporting period 37,120 shareholders, with 29,087 being A-share holders, and 8,033 being B-share holders Total number of shareholders at the end of the fifth trading day before the disclosure date of the annual report Shareholdings of top ten shareholders (all being shareholders holding shares not subject to trading moratorium) Name of shareholder (full name) CHINA NANSHAN DEVELOPMENT (GROUP) INC. Nature of shareholder Percentage of shareholding (%) Shares not subject to trading moratorium (share) 35,762 shareholders, with 27,490 being A-share holders, and 8,272 being B-share holders Shares pledged or frozen (share) Type of shares (A, B, H or other) 32.52% 209,687,067 0 A share SHENZHEN MALAI STORAGE CO., LTD. 25% 161,190,933 0 A share KEEN FIELD ENTERPRISES LIMITED Foreign-funded 8.58% 55,314,208 Unknown B share CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI 5496 GOVERNMENT OF SINGAPORE INV. CORP.- A/C "C" Foreign-funded 7.43% 47,914,954 Unknown B share Foreign-funded 0.66% 4,275,390 Unknown B share BAYVK A2-FONDS Foreign-funded 0.58% 3,732,089 Unknown B share EMPLOYEES PROVIDENT FUND Foreign-funded 0.56% 3,586,266 Unknown B share TEMPLETON ASIAN GROWTH FUND Foreign-funded 0.41% 2,657,852 Unknown B share BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND Foreign-funded 0.4% 2,595,918 Unknown B share CMBNA/STICHTING PENS FND ABP Foreign-funded 0.39% 2,504,856 Unknown B share Explanation on associated relationship or/and persons acting in concert among the above-mentioned shareholders: China Merchants Holdings (International) Co., Ltd. ( CMHI ) was a shareholder of China Nanshan Development (Group) Inc. ( CND Group ), Shenzhen Malai Storage Co., Ltd. (Malai Storage) was a wholly-funded subsidiary of CMHI, and Keen Field Enterprises Limited (KFEL ) was also a wholly-funded subsidiary of CMHI. Other than that, the Company does not know whether the other non-restricted shareholders are related parties or not. (3)Relation between the Company and its actual controller in the form of diagram State-Owned Assets Supervision and Administration Commission of the State Council 100% China Merchants Group 55.10% China Merchants Holdings (International) Company Limited entrusted to manage 32.52% of the Company's shares held by CND 100% Shenzhen Malai Storage Co., Ltd. 25% 100% Keen Field Enterprises Limited 8.58% 37.02% China Nanshan Development (Group) Incorporation 32.52% Shenzhen Chiwan Wharf Holdings Limited 2

3 Note 1: On 17 Sept. 2012, CMHI and CND Group signed the Agreement of China Merchants Holdings (International) Co., Ltd. and China Nanshan Development (Group) Inc. Concerning Custody of Shares of Shenzhen Chiwan Wharf Holdings Limited. According to the Agreement, CND Group would entrust CMHI as a custodian with its 370,878,000 A-shares in the Company (representing a shareholding percentage of 57.52%). The custody announcement (No ) was released on 20 Sept on Securities Times, Ta Kung Pao (HK) and Meanwhile, CMHI indirectly holds 55,314,200 B-shares of the Company (representing a shareholding percentage of 8.58%) via its wholly-funded subsidiary KFEL. As such, CMHI controls 66.10% equity interests of the Company. On 1 Nov. 2012, China Securities Regulatory Commission issued the ZJXK [2012] No Document Reply on Approving China Merchants Holdings (International) Company Limited to Disclose the Acquisition Report on Shenzhen Chiwan Wharf Holdings Limited and Exempting It from the Tender Offer Duty, exempting its tender offer duty due to being the custodian of 370,878,000 shares of the Company, which made it the controller of the Company s 426,192,200 shares in all, accounting for 66.10% of the Company s total shares. The actual controller of the Company remained China Merchants Group after the entrustment. Note 2: On 27 Dec. 2012, CND Group and Malai Storage signed the Agreement between China Nanshan Development (Group) Inc. and Shenzhen Malai Storage Co., Ltd. Concerning Transferring Shares of Shenzhen Chiwan Wharf Holdings Limited. According to the Agreement, CND Group transferred a number of 161,190,933 RMB ordinary shares of the Company (representing a shareholding percentage of 25%) to Malai Storage. The said transaction was approved by SASAC of the State Council and the transfer registration formalities were finished, with the relevant announcements (No and No ) disclosed Securities Times, Ta Kung Pao (HK) and dated 12 Mar and 27 Apr respectively. After the equity transfer, CMHI indirectly held 161,190,933 A-shares of the Company (a stake of 25%) via its wholly-funded subsidiary Malai Storage, and held 55,314,208 B-shares of the Company (a stake of 8.58%) via its wholly-funded subsidiary KFEL, representing a combined stake of 33.58% in the Company. Meanwhile, CMHI was entrusted to manage the 209,687,067 A-shares of the Company (a stake of 32.52%) held by CND Group, which meant that CMHI controlled a stake of 66.10% in the Company. The actual controller of the Company remained China Merchants Group. 3. Discussion and analysis by the management (1) Review of operation in the reporting period The Company is principally engaged in the handling, warehousing and transportation of containers and bulk cargoes, as well as the provision of related services. The global economy saw a gradual and non equilibrium recovery in Stimulated by quite a few rounds of quantitative easing and the re-industrialization progress, the U.S. economy kept recovering. Euro-zone economies bottomed out and showed a slight growth. Japan saw a strong rebound upon a series of economic stimulus policies, with the deflation situation improved. Emerging economies commenced re-structuring and slowed down in the overall growth. And China s economy was stable and recorded a GDP growth of 7.7% for 2013, with foreign trade showing a growth of 7.6% from last year. Meanwhile, International Monetary Fund (IMF) estimated a growth of 3.0% and 2.7% in 2013 for the global economy and trade respectively. Overcapacity still existed in the container shipping market and liner companies generally suffered from gloomy earnings. Due to a weak foreign demand and increasing competition among wharfs, the container business of the Company was under a lot of pressure. However, the Company still managed to maintain relative stability of its container throughput and market share through proactively expanding local import and export cargo resources, near-sea shipping routes, liner branch routes and emerging business. As for the bulk cargo business, in view of a sluggish demand in foreign trade, the Company adapted itself to the said market change and proactively sought for more needs in inner trade, which offset the drop in the cargo volume caused by the declining foreign trade. In addition, the operation rates for main cargos were effectively increased. For the reporting year, the Company achieved a container throughput of 5,346 thousand TEU, representing a small YoY increase of 0.7%, slightly lower than the 1.7% growth of the average container throughput of all Shenzhen wharfs. The container throughput of the Company represented a 23% market share of Shenzhen wharfs, almost the same as last year. Chiwan port achieved a throughput of 3,990 thousand TEU, a 1.1% increase over last year. Throughout the year, the bulk cargo throughput achieved by the Company was 13,311 thousand tons, up 24.4% over last year. To be specific, Chiwan Port optimized its business structure and achieved a throughput growth of 10.6% over last year despite limited resources. And Machong Port saw the gradual release of new resource 3

4 capacity, which resulted in a considerable throughput growth of 46.2% over last year. For the year 2013, the Company achieved a total throughput of million tons, representing an increase of 7.1% over 2012, of which Chiwan Port achieved million tons, up 4.2% over 2012, accounting for 25.6% of the overall throughput at Shenzhen ports, up by 40 basic points as compared with Business highlights of the Company for the past three years are set out as follows: Business highlight Total throughput (thousand tons) 65,894 61,533 63,840 Among which: Container throughput (thousand TEU) 5,346 5,311 5,793 Chiwan Port 3,990 3,946 4,122 Mawan Port 1,356 1,365 1,671 Throughput of bulk cargos (thousand tons) 13,311 10,699 9,251 Chiwan Port 7,223 6,534 6,532 Machong Port 6,088 4,165 2,719 Hours charged for tow trucks (thousand hours) 1,230 1,179 1,231 Hours charged for tugboats (hour) 30,247 31,707 32,121 In 2013, the Company attached importance to and continued improving customer service to stabilize core customers. Meanwhile, it proactively sought for new customers and adopted more flexible business strategies to enhance customers reliance on it and its routes. It also enhanced exchange and cooperation with other wharfs in the region to maintain a good order in market competition. The Company pushed forward R&D innovation and lean management; increased operation efficiency and resource utilization efficiency through operation process improvement, work flow optimization and technical innovation; and eased the pressure brought by limited resources and rising labor cost. In 2013, the Company accelerated the transition from technical innovation achievements to actual productivity, which produced an excellent result. It also vigorously carried forward innovation in organization, management and mechanism. Through a series of lean management measures such as optimization of the organizational structure, IT application in management and cost control, the Company successfully reduced costs, increased efficiency and greatly improved the overall management capability. (2) Outlook of the Company s future development 1) Development trends and competition status of the industry in which the Company is engaged In 2014, the global economy will keep the moderate recovery trend with the overall situation expected to be better than However, there will still be challenges such as withdrawal of American QE, the weak European economy and re-structuring of emerging markets. It will be difficult to see a fundamental improvement of the supply and demand imbalance in the shipping market, and the freight rates may fluctuate more frequently. Allied container shipping of liner companies will keep upgrading and the global map of liner routes may be re-drawn. New opportunities and challenges are ahead for container wharfs. Thanks to more and more in-transit containers, the container throughput of Shenzhen surpassed Hong Kong and became No. 3 in the world in But in the long run, the declining foreign demand and the ongoing industry relocation from the Pearl River Delta will lead to a limited growth of containerizable goods in the hinterland, and the container throughput of Shenzhen wharfs will enter a period of steady growth at a low speed. In terms of its container business in the long run, the Company will devote itself to maintaining stable core clients and main shipping routes through increasing the wharf operation efficiency and carrying out a quality service strategy. Meanwhile, along with the upgrading of the berths, there will still be some room for the throughput to grow. As for the bulk cargo business, the overall resource capability of the Company improves significantly as the wharf of Machong Phase II is put into use. The Company becomes a stronger competitor in the traditional cargo market and there is room for it to expand the emerging cargo market. In the future, the bulk cargo business of the Company will keep growing steadily. 4

5 2) Business plan for 2014 The Company will pay close attention to developments in the macro-economy and social changes, proactively study the industry situation and market changes, and adjust operating strategies based on its actual situation so as to maximize operating earnings. In terms of the container business, the Company will proactively deal with more and more larger ships and allied liner companies, as well as push forward the upgrading of berths. It will take the initiative to seize market opportunities and expand local cargo sources and near-sea shipping routes. And it will also continue to optimize the port environment and increase the customs clearance efficiency. As for the bulk cargo business, the Company will put the wharf of Machong Port Phase II into use as scheduled, input great efforts in business expansion, and accelerate market cultivation. It will also carry forward the relocation of the fertilizer business to Machong Port step by step as planned. At the same time, it will try to achieve the optimal resource allocation and a coordinative development between Chiwan Port and Machong Port. The Company will continue to provide quality and efficient comprehensive port services for clients, and maintain a steady growth of the overall business scale. Meanwhile, it will seek for cooperation with other wharfs in the region to keep competition in a healthy state. It will also deepen R&D innovation and lean management; improve resource utilization efficiency and the overall management capability; and carry on with its various tasks such as reducing costs and increasing efficiency, saving energy and reducing emission, and building green wharfs. 3) Capital needs and expenditure plan for 2014 To implement our future development strategies and achieve business goals we have set, a capital expenditure of RMB million is planned for 2014, of which RMB million will be invested in wharf warehouses, RMB million in equipments and ships, RMB million in IT and RMB million in administration and offices. The above capital expenditures will be mainly funded by cash inflows from operating activities of the Company and bank borrowings. (3) No significant change occurred to the structures of main business lines and profit during the reporting period, and operating revenue was almost the same as that of last year. Main financial indicators are as follows: Item /- Total operating income 1,780,774, ,783,846, % Operating profit 759,282, ,084, % Net profits attributable to shareholders of the parent 502,894, ,103, % Operating profit went up by 3.01% mainly because 1 business tax and surtaxes recorded a considerable drop of 89% when VAT replaced business tax; 2 RMB appreciation generated exchange earnings; and 3 jointly-run and associated companies recorded YoY growth in profit due to the macro market environment, bringing up the relevant investment earnings by 22% on the year-on-year basis. Net profit attributable to shareholders of the Company (without subsidiaries) recorded a growth of 7.66% mainly because 1 the extension of Berth 13# was put into use in Aug. 2012, which enabled the Company to enjoy a preferential treatment of relevant income tax reduction or exemption; and 2 interest expenses decreased, RMB appreciated and financial expenses decreased. 4. Matters in relation to financial reporting (1) Explain any change of the accounting policies, accounting estimates or accounting methods as compared with the financial reporting of last year According to Motion to change the provision method and proportion of accounts receivables considered and approved on the 4th Special Session of the 7th Board of Directors for 2013 on 8 Mar The announcement on the said change of accounting estimates (announcement No.: ) was released on Securities Times, Ta Kung Pao (HK) and dated 12 Mar The changes in accounting estimates reduced the consolidated net profit for the year 2013 by RMB 295,850.01, of which RMB 216, attributable to shareholders of the parent company's net profit. 5

6 (2) Explain any retrospective restatement due to correction of any significant accounting error in the reporting period N/A (3) Explain change of the consolidation scope as compared with the financial reporting of last year Unchanged (4) Explanation of the Board of Directors and the Supervisory Committee concerning the non-standard audit report issued by the CPAs firm for the reporting period N/A For and on behalf of the Board Zheng Shaoping Chairman Shenzhen Chiwan Wharf Holdings Limited Dated 29 March