Passenger Transportation Business Develops Steadily
Embracing Innovative Business Development Model to Explore New Frontiers in Modern Logistics
Chu Kong Shipping Enterprises (Group) Company Limited (Chu Kong Shipping, or the Company, together with its subsidiaries, the Group; HKG: 560) is pleased to announce its annual results for the year ended 31 December 2023 (the Year).
During the Year, the Group’s terminal navigation logistics business progressed well, with continuous improvement in the cargoes transportation volume. Following the normalisation of traveller clearance resumption after the COVID-19 epidemic, routes resumed in an orderly manner; the cross-border waterway passenger transportation business has been greatly improved with a great rebound in the number of passengers. The Group maintained a steady and robust development in its overall business operations. The Group recorded consolidated revenue of HK$2,553.8 million (2022: HK$2,899.5 million). Profit for the Year increased by 13.5% year-on-year to HK$122.6 million (2022: HK$108.0 million), while profit attributable to equity holders of the Company amounted to HK$114.1 million (2022: HK$93.5 million), representing an increase of 22.0% as compared to the same period last year. The board of directors of the Company resolve to propose a final dividend of HK5 cents per ordinary share (2022: a final dividend of HK4 cents per ordinary share and a special dividend of HK2 cents per ordinary share).
Innovating Logistics Business Model to Propel Comprehensive Upgrade of Terminal Navigation Logistics Business
By extending the business chain and exploring market opportunities, the Group has vigorously developed its modern logistics industries including terminal logistics, warehousing logistics, integrated logistics, cross-border e-commerce and air freight logistics. Regarding cargo transportation business, the Group managed to maintain a stable foundation in inland container transportation and achieved breakthroughs in construction logistics and integrated logistics by strengthening cooperation with terminals and successfully venturing into e-commerce local delivery services during the Year. The container transportation volume for the Year amounted to 1,321,000 TEU, representing a year-on-year increase of 2.8%. The volume of container hauling and trucking on land amounted to 184,000 TEU. The volume of break bulk cargoes transportation for the Year was 1,143,000 tons, representing a year-on-year significant increase of 68.6%. Regarding cargo handling and storage business, the container handling volume was 1,095,000 TEU, while the break bulk cargoes handling volume was 8,966,000 tons.
Through actively responding to market changes, Chu Kong Transhipment & Logistics Company Limited (“CKTL”) promptly adjusted its business strategy and began vigorously transitioning towards becoming an integrated logistics operator, firmly seizing the potential of the Modular Integrated Construction (“MIC”) transportation and construction logistics market. CKTL capitalised on the emerging trend of MIC to win several small-medium transitional housing projects. CKTL has also successfully won the bid for a sand supply for certain phases of the Hong Kong International Airport construction project. In terms of e-commerce business, CKTL has strengthened the integrated business model of “barges + terminals and warehouse services + local delivery” and continues to explore the potential of e-commerce logistics business. During the Year, CKTL smoothly developed the cross-border railway transportation business, successfully undertook the freight cargo businesses of drones from well-known technology companies, and actively prepared for the construction of a logistics network in Vietnam.
During the Year, subsidiaries continued to optimise their business models and implemented various measures to strengthen cost control, resulting in a stable enhancement in the operational efficiency of most regions. By seizing the opportunity from Hong Kong’s international airline hub, CKTL transformed and upgraded its freight cargo business to provide destination customs clearance and delivery services, consistently expanded the customer base for its freight cargo warehouse, resulting in a 31% year-over-year increase in air freight handling volume. By expanding the climate-controlled and bonded storage area at Tuen Mun warehouses and successfully putting them into operation to store high-value items such as perfumes, cosmetics, as well as duty-free alcohol, the climate-controlled warehouse is currently at full capacity. High-rise shelving has been added to certain areas of the warehouses to expand its storage capacity and efforts to actively seek new sources of goods led to the successful introduction of projects involving internationally renowned apparel brands.
Strategically Utilising Advantages of Resources for Highly Efficient Optimisation of Passenger Transportation Business Development
The Group’s cross-border waterway passenger transportation has resumed since 8 January 2023. Following a series of preparations for the resumption of ferry routes, normal operation for 6 urban routes and 5 airport routes has been achieved, among which the “Zhongshan-Hong Kong” line operated by Zhongshan-Hong Kong Passenger Shipping Co-op Co., Ltd. has restored profitability. During the Year, Chu Kong Passenger Transport Company Limited (“CKPT”) recorded a 1,062.2% and 650.4% increase in the total number of passengers for agency services and the number of passengers for terminal services to 1,476,000 and 953,000, respectively. The passenger transportation agency services business in Hong Kong also achieved a turnaround.
During the Year, CKPT has launched three new routes, including “Shenzhen Airport Ferry Terminal-China Ferry Terminal”, “Guangzhou Pazhou-China Ferry Terminal” and “Guangzhou Pazhou-Hong Kong International Airport”. CKPT has coordinated and optimised the operating management of an integrated platform of cross-border passenger transportation and continued to deepen cooperation with airlines and travel agency industries, as well as enhanced the marketing functions on new media platforms including “Tongcheng” and “Tiktok” to achieve favourable situation. The passenger volume has steadily increased and operational effectiveness has been improved progressively. By innovating marketing models and collaborating with other business divisions within the Group, CKPT has launched the ticket package “Cross-border Passenger Transportation +”, creating synergy and aiding the development of convenient travel within the transportation industry and the Guangdong-Hong Kong-Macao Greater Bay Area (the “Greater Bay Area”).
Furthermore, CKPT has placed great emphasis on airport core projects and strengthened its competitive advantage by continuously expanding its project layout and business outreach around the Hong Kong International Airport. The operation scale of self-service baggage drop project at the Hong Kong International Airport has been restored to pre-epidemic levels and continues to expand. The Group is currently preparing for the next phase of the tender process. Through actively developing long-term customers and serving a number of ad-hoc customers, the apron vehicle sharing service maintained stable operation.
Maximising Synergistic Effects while Cultivating Local Ferry and Water Cultural Tourism Businesses
Regarding local ferry services, the Group has seized the development opportunity brought by the resumption of normal traveller clearance and witnessed a rebound in the number of passengers, recording 12,269,000 in the number of passengers, representing a year-on-year increase of 8.2%. Sun Ferry Services Company Limited (“Sun Ferry”) was committed to enhancing its full-cycle service capabilities, optimising pier facilities, improving the passenger ferry ride experience, the non-farebox revenue was increased through the promotion of outlying island tourism and terminal improvement projects. Regarding water cultural tourism business, Oriental Pearl Cruise Company Limited operated a total of over 1,000 trips with 55,000 passengers and recorded a profit for the first time. During the Year, the “Oriental Pearl” cruise achieved regular berthing operations at the Central Pier, and its high-end business charter and sightseeing services attracted numerous high-end clients, gaining multiple media coverages.
As for the fuel supply business, Sun Kong Petroleum Company Limited achieved growth in sales volume of both diesel and engine oil, turning a loss into a profit, while at the same time successfully renewing the China Hong Kong City Oil Supply Project, winning the bid for the HKSAR Government’s marine oil bunkering project and reaching a cooperation project as the lubricating oil supply agency.
During the Year, pursuant to the outstanding performance in Environmental, Social and Governance (ESG) management, the Group was successfully included in the “ESG Pioneer 100 Index for Listed Stated-Owned Enterprise (2023)” list.
Outlook
In 2024, with the national avocation for the evolution of new quality productive forces to achieve high-quality development in the real economy, the Group has been provided an important support in creating new engines of development and constructing new competitive advantages. Along with full utilisation of the comparative advantages of the Greater Bay Area cities, continuous optimisation of the functional layout of the regions, continuous improvement of talent exchange channels, and gradual appearance of the effects of integration and development, the Group will obtain a bigger scope and a better platform in its future development process. The Group will firmly grasp the strategic opportunities brought by the national policies to construct a development platform to expand new horizons for business growth, enhance the momentum of development to cultivate new competitive edges in project development, and drive the high-quality advancement of the enterprise in the following areas:
Firstly, the Group will build the terminal development platform and realise joint coordination development among the terminal cluster. The Group will strive to strengthen the integration of terminal logistics resources and actively build a modern terminal logistics industry system, to form a new landscape of terminal logistics characterised by reasonable allocation and coordinated development. With the goal of establishing scalable terminal platforms, the Group will plan its layout comprehensively and adjust its strategies dynamically with flexibility. It will precisely allocate incremental terminal resources, and proactively develop core terminals that have the capability to lead and provide supportive capacity. Through the dislocation development of regional terminals, driven by core terminals and coordinated with other regional terminals, a regional terminal consortium will be formed to enhance the overall strength and market competitiveness of the Group’s terminal cluster.
Secondly, the Group will build the integrated logistics development platform to promote industry chain towards high-end level. By establishing a new pattern of synergistic development among terminal nodes in Mainland China, with CKTL serving as the link, the Group will construct an integrated logistics platform with formidable overall strength and competitive prowess. With a focus on building warehousing logistics centres with high self-operation proportion and outstanding efficiency, the Group will actively expand value-added businesses, strive to achieve new breakthroughs in the high-end logistics industry chain in order to become a leading regional supply chain service provider. In addition, focusing on the vast infrastructure logistics market in Hong Kong and Macao and closely monitoring potential construction projects in Hong Kong, the Group will strive to establish a dominant market position in the field of infrastructure logistics.
Thirdly, the Group will build the development platform for waterway passenger transportation to promote synergistic effects of new business models. The Group will optimise and adjust the resources of waterway passenger transportation in the Greater Bay Area, with an emphasis on developing core cross-border routes from Guangzhou Pazhou to Hong Kong’s urban area and airport, thereby enhancing the operational efficiency of these routes. The Group will also strive to participate in the development of Hong Kong into “Airport City”, and actively bid for the Hong Kong International Airport’s strategic high-quality projects. The Group will strengthen the local ferry business by better utilising the business platform of Sun Ferry. In addition, by better developing the water-based tourism market and utilising resources as well as the brand of “Oriental Pearl”, the Group will further deepen the multi-level and diversified water-based market. Furthermore, the Group will endeavour to carry out the oil supply in marine work projects of HKSAR Government, expand the fleet for lubricant vessels, expand oils and its related business, and establish the new “one-stop” and “end-to-end” oil supply chain business model.
Fourthly, the Group will strengthen the development momentum of the “Belt and Road” initiative and provide new avenues for business expansion. The Group will continue to promote the implementation of its “Going Out” strategy, and strive to accomplish a series of projects with promising prospects and strategic complementarity. To better exert the market “outpost” effect of overseas business nodes and networks, the Group will seek more business collaborations and foreign investment opportunities in ASEAN markets, including Singapore, Malaysia, Thailand and Vietnam.
About Chu Kong Shipping Enterprises (Group) Company Limited
Chu Kong Shipping is a listed company incorporated in Hong Kong held by Chu Kong Shipping Enterprises (Holdings) Company Limited and subject to Guangdong Provincial Port & Shipping Group Company Limited. Chu Kong Shipping operates and manages the largest high-speed passenger fleet and network of waterway passenger transport in Guangdong, Hong Kong and Macau which is based in Hong Kong and covers cities in the Greater Bay Area namely Guangzhou, Shenzhen, Shunde, Zhongshan, Dongguan, Macau and so on. CKSG operates the local ferry services in Hong Kong since its acquisition of Sun Ferry in May 2020, providing services on five main inner harbour and outlying island ferry routes, and developing the Victoria Harbour water cultural tourism projects simultaneously. Chu Kong Shipping is also one of the largest operators of inland terminal and logistics service in the PRD. Based in Hong Kong, Chu Kong Shipping builds up a network covering multiple cities in the PRD, including Zhaoqing, Qingyuan, Foshan, Guangzhou and Jiangmen etc., providing the operation of inland cargo terminals, integrated logistics, international forwarding and solutions to logistic supply chain and so on.
For more information, please visit: https://www.cksd.com/