CIMC Vehicles announces 2020 Annual Results
HONG KONG, Mar 25, 2021 – (ACN Newswire via SEAPRWire.com) – The world’s leading high-end manufacturer of semi-trailers and specialty vehicles, CIMC Vehicles (Group) Co., Ltd. (“CIMC Vehicles”) or the “Group”, stock code: 1839.HK) is delighted to announce its annual results for the year ended 31 December 2020. (“Reporting Period”)
During the Reporting Period, the Group recorded a strong performance in each business segment driven by strong growth in the Chinese market. Annual revenue hit a record high, recording 13.0% growth from 2019 to RMB26,246 million; gross profit margins fell by 1.2pp to 11.7% from 2019 due to the impact of the Covid-19 pandemic; total assets and net assets rose to RMB19,825.2 million and RMB10,448.7 million respectively; net cash flow generated from operating activities significantly increased to RMB2,746.9 million; and return on equity (ROE) reached 12.3%.
The semi-trailer business in China recorded strong revenue growth of 45.8% and an increase of 1.9pp in gross profit margin
During the Reporting Period, the Chinese government promulgated a new development pattern that treats domestic circulation as the mainstay while allowing the dual circulation of domestic and foreign markets to boost each other, providing a broaden development space for China’s logistics industry. With the implementation of the new national standards for second-generation semi-trailers (GB7258-2017), the Group’s semi-trailer business in China recorded significant growth with revenue increasing by 45.8% to RMB7.4 billion from 2019 and gross profit margin up 1.9pp from 2019 to 13.6%.
By leveraging economies of scale from “Light Tower” plants, centralized procurement and supply chain management platforms, production costs were significantly reduced and gross margins have consistently increased: from 11.2% in 2018 to 11.7% in 2019 and further up to 13.6% in 2020.
Benefiting from the launch of the new “Pioneer Series” designed using digital modules and the “New Marketing and Retail” business model, total sales of van trailers in China increased 154.9% year-on-year (YoY) to 17,744 units compared with the same period last year. For tank trailers, the core lightweight technology was well accepted and appreciated by customers. Giving credit to the scale advantages of “Light Tower” plants, total sales of tank trailers distinctly increased by 32.8% to 21,125 units.
Profiting from being the market leader, sales of truck bodies for specialty vehicles in China grew by nearly 40%
During the Reporting Period, the Group benefited from successive policies introduced by the Chinese government to boost automobile consumption, tax and fee reductions, and increased investment in new infrastructure. Revenue from truck bodies for specialty vehicles in China reached RMB10.16 billion, representing a 37.8% increase YoY .
The Group established strategic partnerships with major domestic heavy truck enterprises to jointly develop and market truck bodies for specialty vehicles. It also upgraded its production lines to become a “Light tower” plant, thus enhancing product quality and delivery capabilities. Furthermore, the Group continued to strengthen its strategic position in high-end and green manufacturing with several of its key factories for truck bodies for specialty vehicles winning national and provincial “Green Factory” awards.
Given the trend toward smart environmental protection and lightweight construction, the delivery capability of our urban dump trucks was greatly improved, enhancing their market recognition. Intelligent cement mixer trucks launched by the Group also continue to lead the market, ranking first in terms of total sales volume for the fourth consecutive year in China.
Total sales of truck bodies for refrigerated trucks jumped 35.8%, with gross margin increasing by 7.9pp.
During 2020, China’s cold-chain market expanded rapidly. The “Stay-at-Home Economy” resulting from the pandemic has created huge demand in China for purchasing daily consumer goods and fresh food via e-commerce, stimulating demand for refrigerated trucks. At the same time, the Chinese government launched a series of regulations for the cold-chain logistics industry, further guiding development of this market throughout the country.
During the Reporting Period, the Group delivered a total of 6,049 units of various types of refrigerated truck bodies with total sales increasing 35.8% YoY and gross profit margin rising 7.9pp to 23.0% YoY.
The Group has adopted core technologies including rigid polyurethane foam and insulation plates for refrigeration purposes, high-pressure and high-density polyurethane foam, and more efficient rivet connections for body plates. It now leads the industry in terms of technology.
Consistently ranked first in the global semi-trailer industry, business in overseas markets rebounded rapidly in the second half of the year.
During the Reporting Period, the operational performance of our global semi-trailer business recorded stable growth due to our solid “Intercontinental Operation” developed over the years and “Local Manufacturing” by the Group’s subsidiaries.
According to Global Trailer’s 2020 top OEM worldwide rankings for semi-trailer manufacturing, the Group is the world’s No. 1 semi-trailer manufacturer in terms of production volume.
In 2020, the Group’s overseas semi-trailer business suffered because of Covid-19. However, by exercising the “Intercontinental Operation and Local Manufacturing” operational practice developed over the years, it fully utilized the production, assembly, global supply chain management and global distribution logistics management capabilities of its 22 manufacturing and 10 assembly plants.
LAG Trailers N.V., a wholly-owned subsidiary of the Group, has gradually returned to normal levels of production efficiency and order delivery following the resumption of work and production since the second quarter of 2020. In 2020, LAG Trailers N.V. further consolidated its leadership position in Europe’s tanker market.
In the second half of 2020, products in other markets introduced advanced technologies developed in mature markets to win customers in Southeast Asia by offering products with high cost performance ratio.
Building a comprehensive ” Sophisticated Manufacturing System ” and reach new heights in Intercontinental Operation
Looking ahead, the Group will seize opportunities to upgrade and replace semi-trailers in China and actively utilize new marketing campaigns and new retail channels to increase both sales of second-generation semi-trailers and market share. The Group will also improve product quality through introducing digital product module and innovative R&D technologies, build core light tower plants and expand the production capacity of the second-generation semi-trailers. The Group will also take the opportunity to nurture the design, assembling and services capabilities of part of the core components as to offer customers better overall value. It will also build and develop a new retail system and intelligent sales distribution system for the “Pioneer Series” of semi-trailers and upgrade its intelligent distribution system, for enhancing customer service, and strengthening after-sales service and extended-warranties for these products.
In terms of truck bodies for specialty vehicles, the Group will continue to expand the leading advantages of truck bodies for specialty vehicles, work closely with tractor unit manufacturers on joint designs to increase economic efficiency in production and procurement, optimizing the total cost of ownership of products, and offering user a better purchasing experience.
In regard to truck bodies for refrigerated trucks, CMIC Vehicles will spare no effort to expand its manufacturing presence, bring newly developed “Light Tower” plants into operation, apply R&D to next-generation product modules and production technologies to seize new business opportunities and achieve organic growth.
In terms of semi-trailers for overseas market, the Group will build on the growth and recovery of demand in the North America semi-trailer market as well as the recovery in European market. It will implement a comprehensive enhancement plan based on the ” sophisticated manufacturing system”, forming a strong team to enhance business operations and capture greater market share.
Finally, the Group will build a comprehensive sophisticated manufacturing system to achieve its unparalleled industry position under the “dual circulation” economy at home and abroad, pushing its intercontinental operations to new heights.
About CIMC Vehicles (Group) Co., Ltd
CIMC Vehicles (Group) Co., Ltd. (“CIMC Vechicles”, Stock code: 1839.HK) is the world’s No.1 semi-trailer manufacturer in terms of production volume according to the Global Trailer. In addition to the production and sales of seven major types of semi-trailers in global major markets, the Group is also actively engaged in the production of semi-trailers and truck bodies for specialty vehicles and the sales of fully-assembled specialty vehicles in China. Meanwhile, the Group is also a leading manufacturer of refrigerated truck bodies in China. Semi-trailer products including container chassis trailers, flatbed trailers, curtain-side trailers, van trailers, refrigerated trailers, tank trailers and other special types of trailers; truck bodies for specialty vehicles including urban dump trucks and cement mixers. Products sold in China under the “Tonghua”, “Huajun”, “SCVC SAILING”, “Ruijiang Vehicles”, “Lingyu Vehicles” and “Liangshan Dongyue” brands, in North America under the “Vanguard” and “CIE” brands, and in Europe under the “SDC” and “LAG” brands which are well-known brands with long history. The Group owns “Light Tower” Plants that represent the strength of China’s sophisticated manufacturing capabilities. The plants are focused on product standardization, digitization and modular design and production, and serves to actively promote the compliance of domestic trailers and quality industrial upgrade.
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