2017 Interim Results Corporate Presentation. 25 August 2017

Transcription

1 2017 Interim Results Corporate Presentation 25 August

2 Disclaimer This document may contain forward-looking statements that reflect risks and uncertainties. These forward-looking statements are generally expressed in forward-looking expressions, such as expectations, estimation, planning, projections, goals, the possibilities, probabilities or so on to reflect the actions that the Company expects to or may take in future or the results from these actions. You should not rely excessively on these forward-looking statements, which are based on our own information and other sources of information that we consider reliable. Our actual results may differ from these forward-looking statements which may lead to fluctuation in our share price. The distribution of this document in other jurisdictions may be restricted by local laws where it locates, and persons into whose possession it comes informing themselves about, and observing, any such restrictions. The information contained in this document has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The purpose of this document is not for complete or full analysis made to the financial or trading position or prospect, and any person who will come in possession of this document shall be aware that no reliance should be placed on the contents contained herein. The information and opinions contained in this document are subject to change without notice. This presentation document is not intended to constitute an offer to, or a solicitation for offer to, sell, purchase, or subscribe for the securities of the Company. The Company or any of their respective affiliates, advisors or representatives shall not have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. 1

3 Agenda Interim Results Highlights 2 Operational Highlights 3 Development Strategies 2

4 2017 Interim Results Highlights 3

5 2017 Interim Results Highlights (RMB million) 1H H 2017 Change YoY Average Selling Price (RMB/Tonne) 20,869 25, % Sales volume to external customers (tonnes) 367, , % Revenue 7,675 7, % Gross profit 2,820 2, % EBITDA 2,544 2, % Net profit 1,370 1, % Earnings per share (RMB) % Dividend per share (RMB) No Change 1H H 2017 Change YoY Gross margin 36.7% 33.2% %pt EBITDA margin 33.1% 33.3% %pt Net profit margin 17.8% 17.2% %pt 4

6 Rewarding Shareholders Support Dividend Payments in the Past Five Years 45.5% 55.0% 34.0% 36.2% 35.4% Dividend per share (HKD) Payout ratio H 2017 Dividend payment for the year (HKD million) 910 1,130 1,200 1,

7 Revenue and Sales Analysis for 1H17 by Product by Geographical Region Revenue Sales Volume Revenue Sales Volume 3% 3% 4% 5% 6% 9% 44% 50% 52% 39% 94% 91% Aluminium Alloy Formworks Industrial Deep-processed Construction China Overseas Remarks: The figures in percentage show percentage of total revenue and sales volume respectively. 6

8 Product Mix Optimisation Led to ASP Increase Product ASP (RMB / Tonne) 1H H 2017 Change YoY Aluminium Alloy Formworks n/a 32,480 n/a Industrial 20,526 21, % Deep-processed 26,603 22, % Construction 14,693 16, % ASP 20,869 25, % 7

9 Analysis on Selling, Finance and Management Costs Selling Costs Finance Costs Management Expenses ((RMB million) (RMB million) (RMB million) 0.9% 1.3% 5.7% 6.8% 11.4% 11.0% H H H H H H 2017 Selling Costs % of Revenue Finance Costs % of Revenue Management Expenses % of Revenue 8

10 Sound Management and Solid Financial Position Turnover Days (Days) 1H H 2017 Trade receivable turnover days Trade payable turnover days Inventory turnover days Balance Sheet Summary (RMB million) As at 30 June 2016 AS at 31 December 2016 As at 30 June 2017 Total assets 79,914 79,038 90,271 Bank balances and cash 4 19,912 14,249 15,921 Net assets 5 27,088 28,016 28,564 Net asset value per share 5 (RMB) Gearing ratio % 57.0% 61.7% Remarks: 1. Trade receivable turnover days = (365)*((trade and bills receivables balance at the beginning of the period+ trade and bills receivables balance at the end of the period)/2) /sales for the period 2. Trade payable turnover days = (365)*((trade and bills payables balance at the beginning of the period + trade and bills payables balance at the end of the period) /2) /cost of sales for the period 3. Inventory turnover days = (365)*((inventory balance at the beginning of the period + inventory balance at the end of the period)/2) /cost of sales for the period 4. Bank balances and cash = cash and cash equivalents + short-term deposits + pledged bank deposits 5. Net assets as at 31 December 2016 and 30 June 2017 exclude the perpetual capital instrument of around RMB6 billion 6. Gearing ratio = (total liabilities / total assets)*100% 9

11 Capital Expenditure Overview Overall Capex Capex of Tianjin Aluminium Flat Rolling Project (RMB 100 million) (RMB 100 million) H H H H 2017 Liaoyang Plant Tianjin Plant Yingkou Plant Others Machinery & Equipment Land & Plants 10

12 Operational Highlights 11

13 Three Core Businesses Aluminium Extrusion Aluminium Extrusion The core business in seasoned operation. High-end, large-section aluminium extrusion products, mainly used in transportation, machinery & equipment, and electric power engineering sectors. Deep Processing Flat Rolling Flat Rolling A newly-developed growth momentum for the long run. High quality flat rolled products, used in a wide range of industries including transportation, machinery & equipment, chemical containers and packaging. Deep Processing The developing profit growth driver. Processes such as cutting, welding, polishing, machining and surface treatment added value to fabricated aluminium products. 12

14 Review on Aluminium Extrusion and Deep Processing Businesses Optimize Product Mix Enhance added value of products through technological improvement and research in product function and performance. Improve product quality and performance consistency to balance the product mix. New products include aluminium alloy formworks, large-sized parts for vehicles, etc. Strengthen the Group s long-term profitability Adjust and Upgrade Production Capacity Trial production of one of the two ultra-large 225MN extrusion presses was underway, while the other press was being installed. The 99 extrusion presses ordered last year will be delivered for installation. Enhance the production capacity for high-end products In-depth Cooperation Cooperation with clients moved forward to the initial stage of product development. Provide technical support to a number of large-scale manufacturers of automobile and train in China: Exclusive supplier for the aluminium-intensive car body of Chery s pure electric car Little Ant (eq1); Supplier of aluminium extrusions of CH Auto s electric sports car model K50; Supplier of aluminium parts for the high-speed train Renaissance EMU. Enhance the Group s value as a supplier Transition Into an Integrated Light-weight Solutions Provider 13

15 Key Products Aluminium Alloy Formworks Used for large-scale residential and construction projects. The Group s unique alloy makes its aluminium alloy formworks stronger and more durable. The Group s leading surface treatment technique enhances its product quality. Strengths of aluminium alloy formworks: Light-weight; Enhance construction efficiency; Lower average construction cost; Reusable; Recyclable. The Chery Little Ant (eq1) Electric Car Currently, it s the only new energy car with aluminiumintensive body launched by a Chinese self-owned brand. Have received overwhelming response since its launch in March The Group is the exclusive supplier of its aluminiumintensive vehicle body. Parameters of eq1: Total weight: 855kg; Weights 40% less than traditional cars; Over 90% of its body frame consists of aluminium alloy. 14

16 Key Products (continued) Electric Bus Frame and Body The Group is the main supplier for BYD. The Group supplies large parts including the front panel, roof, and bodyside. For a 12-metre-long aluminium-intensive bus: Average usage of aluminium: 900 kg; Weights over 30% less than a traditional bus. Fabricated Parts for Rail Transit Standard multiple units trains of over 350km/hr in speed carries aluminium train body. The Group supplies fabricated large parts including side wall, floor, roof and girders. For the Renaissance EMU: Eight compartments; Each compartment requires 12 tonnes of aluminium extrusion products. 15

17 Flat Rolling Business Location Project Overview First Line Second Line Auto Parts Industrial Park in Wuqing District, Tianjin Authoritative Accreditations Obtained Recently Passed the accreditation from Det Norske Veritas (DNV), Nippon Kaiji Passed the International Railway Kyokai (NK), American Bureau of Shipping (ABS) and China Classification Industry Standard (IRIS) Society (CCS) Designed capacity Status 600,000 tonnes p.a Commenced production 1,200,000 tonnes p.a. Equipment Testing Main production processes Products Casting, Hot Rolling, Cold Rolling, Finishing Plates and sheets Sheets Jan Feb Mar May Jul Applications Transportation, machinery and equipment, chemical containers, tankers, packaging, industrial, durable consumer goods, etc. Passed the Nadcap certification for aviation industry Passed ISO/TS16949 accreditation for automotive industry Passed the accreditation from Lloyd s Register of Shipping (LR) 16

18 First Overseas Acquisition Alunna Alunna: Small and Beautiful Acquisition Brings Synergies A Hundred-yearsold Enterprise A Leading Aluminium Tube Manufacturer Adequate resources to provide financial support Established in 1914 Located in Unna, Germany 100,000 sq m in area Over 200 employees 10,000 tonnes of annual sales volume Unified Production Line Reputation Seamless extruded tubes Porthole extruded tubes Drawn tubes Tubes for aerospace applications Excellent R&D and stable clientele Complementary Businesses Casting mill Extrusion mill Drawing mill Heat treatment Straightening mill Accelerates the Group s development in the areas of aerospace and automobile, enhances its overall capability 17

19 Development Strategies 18

20 High-end Applications of New Material has Become the Norm Supportive Policies Brings in Downstream Demand Development Plan for the Non-ferrous Metal Industry ( ) To develop high-end applications of aluminium Integrated Work Proposal for Energy Conservation and Emission Reduction for the 13th Five-Year Plan Period To accelerate development of strategic emerging industries Traffic infrastructure construction of major projects three years action plan ( ) To confirm the investment amount on rail transit and highways Fuel Consumption Limit Target in Various Countries (L/100km) Decrease CAGR EU % U.S.A % Japan % China % Source: China Passenger Vehicle Fuel Consumption Development Annual Report 2015 by The Innovation Center for Energy and Transportation. The above statistics were calculated based on NEDC (New European Driving Cycle), and are for reference only. Mid- to Long-term Railway Network Planning ( ) Planning of high speed railway network to 8 vertical and 8 horizontal tracks Fuel Consumption Limits for Passenger Cars To implement the fourth stage of the emission standards Roadmap for Energy Conservation and New Energy Automobiles Establishment of energy saving target and sales target of new energy cars Long-term Development Plan for the Automobile Industry In 2020, the fuel consumption level in China will be lower than that of developed countries. The decrease rate of fuel consumption limit in China is faster than developed countries. To promote key technical breakthroughs and green development 19

21 High-end Aluminium Applications in Various Countries Fabricated Aluminium Product Mix Comparison by Country (2016) Comparison of Industrial Aluminium Extrusion Product Applications by Country (2016) 12% 9% 7% 6% 33% 1% 4% 13% 37% 20% 4% 3% 14% 31% 16% 8% 13% 12% 19% 6% 7% 53% 11% 15% 21% 17% 23% 54% 58% 67% 52% 46% 51% 26% 31% China U.S.A. Japan Germany Aluminium plates and sheets Aluminium extrusion Aluminium foil Others China North America Europe Japan Transportation Machine & Equipment Electronics Consumer Products Others Source: Report on the market development of the aluminium fabrication industry issued by Antaike in January 2017 and the Research report on the aluminium extrusion market in China and elsewhere issued by Antaike in June

22 Growth Potential of High-end Aluminium Application in China Demand Forecast for Industrial Aluminium Extrusion Products in China Demand Forecast of Industrial Aluminium Extrusion Product Applications Demand Forecast for Aluminium Extrusion Products in China s Transportation Sector ( million tonnes) (million tonnes) % (million tonnes) % % 31% 11% 23% 30% 11% 23% 17E-21E CAGR Others 7% Consumer durables 7% % 2% 8% 25% 2% 7% 18% 67% Vessels 17E-21E CAGR Others 6% 5% 31% 32% Electric equipment Mechanical equipment 8% 7% 58% Rail vehicles Bicycles and Motorcycles 6% 1% Transport -ation 9% Cars 13% E 2018E 2019E 2020E 2021E 2017E 2021E 2017E 2021E Source: Research report on the aluminium extrusion market in China and elsewhere issued by Antaike in June

23 Impetus for Future Development Production Consolidation Optimisation R&D Commence production of the first aluminium flat rolling production line in Tianjin, providing steady impetus for the Group s long-term development. Continue to implement production capacity optimisation and expansion to consolidate overall profitability. Enrich high-end product portfolio and increase proportion of high value-added products. Enhance R&D and accelerate technological innovation to improve our comprehensive strengths. 22

24 A Leading Fabricated Aluminium Product Developer and Manufacturer in Asia For enquiries, please to: 23