Ye's Chemical Announces Full Year 2019 Results

review year, the Group's core business performance improved significantly, with shareholders' net profit attributable to shareholders rising 47.7 per cent year-on-year to HK$273 millionThe Group's full-year sales and sales volume decreased by 15.5% and 1% year-on-year to HK$10.46 billion and 1.38 million tonnes, respectively, mainly due to the Group's commitment to high quality sales and the decline in the unit price of solvent sales in the yearThe Group has maintained prudent financial management, implemented stringent credit monitoring measures and continuously optimized the use of funds, and the overall borrowing ratio has fallen significantly from 13 percentage points to 33% year-on-yearThe Board recommended a final dividend of HK$13 per share (2018 period: HK$10 per share) and a total dividend of HK$20 per share for the full year, an increase of HK$4 over last year"The overall operating environment in 2019 remains challenging, with a resurgence of trade protectionism, a warming geopolitical shock and a depressed economic climate," said MrYip, Chairman of MrYe ChemicalChina's economy is affected by the friction between China and the United States, and downward pressure on economic growth has increasedNevertheless, the Group continued to consolidate its core business and made encouraging progress in cost control and customer quality, revitalising the Group's assets, resulting in a significant improvement in the performance of its core business, with all of its loss-making businesses turning a profitThe Group will continue to deepen its results in optimizing the quality of its business in 2019, to strengthen the foundation of its core business and to achieve greater market shareBusiness Review and Outlook Solvent Review annual sales of the solvent business reached 1.12 million tons, a slight decrease of 1% year-on-yearSales in the business fell 17 per cent to HK$7.4 billion as a result of a significant reduction in raw material prices, while operating profit fell 19.4 per cent to HK$278 million year-on-yearExport business momentum continued, the full year solvent exports are about the same as last yearIn order to meet more stringent environmental requirements, the Group's two plants in East and South China switched to the use of pipe network vapor steam in the chemical park and the use of natural gas furnaces, which increased the cost of producing steam as fuel in the year of review by about HK$50 millionThe new production line in Taixing, East China, was successfully put into operation in the third quarter of 2019, and the total production capacity of Taixing plant has reached nearly 1 million tons, making it the world's largest production plant of acetateFor the long-term development of solvent business in the South China market, the Group has implemented the site of the construction of a new production plant in Zhuhai Gaoban Port, the management aims to start construction this year, with the goal of starting production by the end of 2021Zhuhai Gaoban Port is one of the most mature chemical parks in The Hua-2-South District, with its facilities and facilities, and its proximity to large ports, which enjoy seilife and provide competitive steam costs When the new base is completed, it will strengthen the competitiveness of the Group's solvent sector The coatings and coatings business made a number of changes and achieved tangible results in the review year Although sales fell by 12% year-on-year to HK$1.61 billion due to a reduction in some of the low-efficiency sales, gross margin increased by 5 percentage points year-on-year due to cost management and effective reduction in raw material procurement costs At the same time, through the integration of the supply chain, the operating efficiency was more significant, resulting in a significant reduction in operating costs and a sharp increase in operating profit and loss to HK$56.6 million year-on-year The Group will continue to play its industrial coatings business in the technical and manufacturing core competencies to consolidate the profit margins of the line of business On the other hand, in order to enhance the brand influence of the architectural coatings business, the Group is repositioning its "Bauhinia" brand, and will invest resources to design products and marketing strategies to match the brand's new positioning and promote the development of the coatings business The ink ink business continued to implement a quality-seeking sales strategy in the review year, systematically optimizing customers and product lines, resulting in a 9% year-on-year decline in sales to HK$1.34 billion, while gross margin increased by 4 percentage points year-on-year Operating profit from the ink business increased significantly to HK$93.8 million, up nearly 1.4 times year-on-year, mainly due to the well-controlled operating costs, and the total cost reduction of about HK$26 million was reduced as a result of the well-controlled operating expenses, which were consolidated from three plants to two plants In terms of marketing, the Group will continue to expand its quality sales and continue to save on operating costs In order to expand the source of sales, ink business will increase the development of industrial inks for home furniture and home, seize market opportunities, expand business in the ink market share Lubricants Group continues to focus on the automotive lubricants business, through in-depth cooperation with existing channel dealers, to enhance the proportion of high-end products sales Sales in the lubricants business fell by 25% year-on-year to HK$204 million, albeit significantly higher than the business's aggressive reduction in procurement costs Combined with significant improvements in operating efficiency and cost structure, operating profit rose sharply to HK$6.4 million, reversing years of losses The Group will explore untapped markets, expand its network of automotive lubricant dealers, and further improve supply chain systems to continuously improve efficiency and reduce inventory, and expect the lubricant business to continue to grow steadily During the property review year, property classified turnover increased by 28% to HK$14 million, and operating profit increased by 1% year-on-year to HK$140 million, mainly due to the rental of the research and development centre building in Zhangjiang, Shanghai, and the increase in rental income from the former headquarters in Fanling, Hong Kong In addition, the sale of Qingpu properties in Shanghai recorded a pre-tax gain of HK$156 million, similar to the value added of the property and the proceeds from the sale of the Huizhou plant last year The Investment "Dai-Dai Car" Group continues to move towards "environmental protection", "terminalization" and "service" and actively explores business opportunities related to "home" and "car" on this basis Since the strategic investment in the car, the group and the founding team of Otsuka car production of good synergy, together in the development of the automobile market to capture the first opportunity In the first quarter of 2020, the Group has further increased its capital to increase its shareholding to 61% and become the largest single controlling shareholder of Otsuka In the past year, the number of car stores in Otsuka increased by 29, with a national network of 85, covering Shandong, Guangdong, Jiangsu, Hunan and Hebei, with nearly 200,000 service vehicles The Group is full of confidence in the founding team of Otsuka Car, will continue to strongly support the team to the chain model in the country to open up the network, is expected to reach more than 150 stores this year -3-Ye's Chief Executive Officer Mr Ye Xuan concluded: "After three years of business integration, the Group's performance achieved the desired integration results, the main business base is more healthy and stable." The Group will strive for the construction of a new plant in South China to consolidate the stable profits of the solvent business, increase marketing efforts, expand sales of the paint and ink business, while strictly controlling operating costs, and increase support for the opening of stores in Otsuka, accelerating the formation of the business scale effect The Group is firmly committed to the path to the "Hundred Years" and, on the basis of the consolidation of the base industry, we will invest more resources and capital to expand some new businesses related to the industry, with a total of a total of a diversity of the Group's business and a better return on capital for the Group and its shareholders The Group has been closely following the outbreak of the new coronavirus at the beginning of the year, and has taken a series of epidemic prevention and control and production protection measures The Group will continue to monitor the development of the outbreak, manage the risk well and make every effort to minimize the impact of the outbreak