- Profitability Increases Significantly
- Further Expands Business Coverage Through Mergers and Acquisitions and Operation Management
China Risun Group Limited (China Risun, or the Group, HKG:1907), the world’s largest independent producer and supplier of coke and a leading refined chemicals producer and supplier together with relevant operation management services provider in China, has announced its interim results for the six months ended 30 June 2021 (the Reporting Period). Profitability increased significantly with profit attributable to owners surging 381.7% to RMB1.69 billion, achieving an outstanding performance approaching the level of the full-year profit in 2020.
In 2021, the Group has remained on its track in growth and expansion from last year, through expansion of self-production, provision of operation management services together with the formation and acquisition of different entities. Revenue for the six months ended 30 June 2021 was RMB18 billion, representing an increase of 121% period-on-period and gross profit margin increased from 14% in 2020 to 18% in 2021. Net profit margin rose significantly to 9%. Basic earnings per share of the Group was RMB40.79 cents, representing an increase of approximately 375% as compared with the corresponding period in 2020. To share the fruit of its outstanding results performance in the first half of 2021 with shareholders, the Board determined to declare an interim dividend of RMB12.30 cents per share, with a total payout of RMB546 million.
Coking industry’s profitability continued to improve with greater economies of scale
Benefiting from the continuous increase in selling price, revenue from the coke and coking chemicals manufacturing business soared 92% to RMB7,706 million. Revenue from the refined chemical manufacturing business increased 88% to RMB5,507 million. In order to grasp the market opportunities, the Group will continue to upgrade its internal projects and enhance its competitiveness.
During the Reporting Period, the Group optimized the storage of coal, established an internal coal research institute and improved coal blending in terms of coke structure, blending accuracy, blending costs, etc. Recently, the Group customized coke production for large-scale blast furnaces and successfully produced high-quality coke “Risun No. 1” and sold to customers, which operated 2,000 cubic meter blast furnaces thereby extending the coke business to cover large-scale blast furnaces area.
The Group will also enhance the production capacity of refined chemicals facilities. Apart from the commencement of the annual production capacity of 300,000 tonnes of styrene project in October 2020, the Group is now expanding the production capacity of caprolactam in Hebei and Shandong Provinces in the PRC. At the same time, the Group is further enhancing and developing new refined materials such as nylon and polystyrene, which are expected to release its high value.
Further expand business coverage through mergers and acquisitions and operations management
The Group will strive to increase its market share in the independent coke market and specific refined chemicals markets by expanding operation management services together with mergers and acquisitions (including forming joint ventures). China Risun expanded its coke operation management services into Shanxi Province, China in March 2021, where it is responsible for purchasing relevant coke products from the partner at an agreed price and selling the coke products to downstream customers with sales service fees from the counterparty based on the sales volume. In addition, the Group entered into another operation management agreement for an annual production capacity of 1,200,000 tonnes of coke and coking chemicals with a third-party coke producer in Jilin Province in the PRC in May 2021.
As at June 30, 2021, China Risun operated and managed totally five projects. This has effectively improved the overall profitability of the Group and expanded the development space and brand influence of the operations management segment.
New hydrogen energy business has great future potential
Apart from Hebei Dingzhou, the Group plans to actively participate in the hydrogen industrialization plans of Hohhot, Inner Mongolia and Xingtai, Hebei, two hydrogen energy demonstration cities in the PRC. The Group aims at creating a clean low-carbon hydrogen energy supplier. Focusing on the rapid development of the hydrogen energy industry in the Beijing-Tianjin-Hebei area, the Group is committed to developing projects ranging from production, storage, transportation, hydrogenation to usage together with the radiation of intelligent supply of hydrogen to the whole country with advanced technology and wider customer-oriented services.
Actively expand its business to overseas
Since 2021, the Group has explored opportunities in different parts of Asia. The Group expanded its geographic layout from the PRC to Indonesia in June 2021 by establishing joint ventures with other large-scale enterprises. The Group has chosen Indonesia Morowali Industrial Park, one of the exemplary cooperation projects under the Belt and Road Initiative as another strategic move to expand its coke production capacity overseas. The project is in the early stage of construction, with a planned construction period of 13-18 months. It is expected to be put into full production beginning in the middle of 2023. Dozens of large-scale metal smelting enterprises have or are planning business establishments in the park and the demand for coke is expected to be enormous in the future.
Digital transformation empowers coke and the chemical industry [longitudinally/ vertically]
The Group was committed to lead the digitalization in the coke and chemical industry by continuous innovation throughout the whole process from procurement, manufacturing to sales of the products, aiming at realizing the development of “green, agglomeration, intelligence, and high-end” in the and chemical industry. “Risun Digital”, the subsidiary of the Group, introduced the “Risun Industrial Cloud”, which supported the Group’s own digital strategic needs and actively promoted the application to the other market participants in the coke industry. By building an open cooperation platform to empower the coke and chemical industry vertically, the Group aimed to assist the digital transformation not only to the coke and chemical industry but also the energy industry.
About China Risun Group Limited
China Risun Group Limited is the world’s largest independent producer and supplier of coke by volume in 2020, according to Frost & Sullivan. China Risun is an integrated coke, coking chemicals, refined chemicals and hydrogen energy products producer and supplier and relevant operation management services provider in China and occupies leading positions in a number of refined chemicals sectors both in China and globally. The vertically integrated business model together with more than 26 years of experience in the coal chemicals industry production chain has enabled China Risun to further tap the downstream refined chemicals markets and hence diversify its income sources and create greater value.
China Risun has been listed on the main board of the Hong Kong Stock Exchange since March 2019 and is now [included/a constituent of] in various index series, including the Hang Seng Composite Index, Hang Seng Stock Connect Hong Kong Index, Hang Seng Stock Connect Hong Kong MidCap & SmallCap Index, Hang Seng Stock Connect Hong Kong SmallCap Index, Hang Seng SCHK Mainland China Companies Index, and Hang Seng SCHK ex-AH Companies Index. For more details, please visit http://www.risun.com/En/