2nd Apr 2013 07:00
2 April 2013
China Chaintek United Co., Ltd
("ChainTek", "China Chaintek", the "Company" or the "Group")
Results Announcement for the Year Ended 31 December 2012
ChainTek (AIM: CTEK), the provider of logistics services to manufacturers of consumer goods in the People's Republic of China (the "PRC", or "China"), today announces its audited results for the year ended 31 December 2012.
RMB '000 | 2012 | 2011 | Change |
Revenue - Logistics Services | 293,758 | 238,736 | +23% |
Revenue - Inventory Solutions | 46,827 | 24,001 | +95% |
Revenue - Total | 340,585 | 262,737 | +30% |
Adjusted EBITDA (1) | 271,796 | 202,312 | +34% |
EBITDA | 257,882 | 202,312 | +27% |
Adjusted profit before tax (1) | 267,435 | 199,596 | +34% |
Profit before tax | 253,521 | 199,596 | +22% |
Adjusted profit after tax (1) | 200,496 | 149,018 | +35% |
Profit after tax | 186,582 | 149,018 | +25% |
Cash | 342,712 | 97,747 | +251% |
Exchange rate: RMB10 = approximately £1.00
(1)Adjusted to exclude share-based payment expenses and exceptional costs relating to the IPO.
Highlights
·; Revenue growth in the year across both the Logistics Services and Inventory Solutions divisions.
·; Diversification of customer base in the core Logistics Services Division, with 19% of total revenues coming from food and building materials, 71% from shoes and apparel, and a total of 289 customers at the year-end.
·; High revenue growth of 95% in the Inventory Solutions Division, with five customers at the year-end.
·; Construction of Inventory Solutions CDC in Jinjiang City of 24,200m2.
·; Strong and experienced Non-Executive Directors appointed with a focus on transparency and good governance.
·; Successful admission to the AIM market of the London Stock Exchange, raising gross proceeds of approximately £7.5 million.
·; The Group received a Government grant of RMB1.55 million, being RMB1.4 million relating to an award from the China Federation of Logistic & Purchasing and RMB0.15 million for the Group's investment in logistics software system, giving further validation of the Government's endorsement of both ChainTek and the wider logistics industry.
Post year-end
·; Acquisition of Land Use Right relating to a plot of land of 145,6000m2, with the intention of building a new logistics park in line with the Group's growth strategy.
·; Signed new debt facility of RMB50 million (approximately £5.0 million) with the Bank of China.
·; Addition of seven new customers in the Logistics Services business and one new customer in the Inventory Solutions business in 2013.
Shufang Zhuang, Executive Director and the Group's founder, commented:
"2012 was a transformational year for the Group and included the Company's shares being admitted to trading on the London Stock Exchange. Total revenues for the year grew 30% compared to 2011, with adjusted profit before tax increasing by 34% to RMB267 million. In our core Logistics Services Division we were pleased with the diversification of our customer base, building on our existing strength in sports shoes and apparel and moving into growing markets such as food and building materials. The Inventory Solutions business ended the year with five customers, and we are pleased with the demand we are seeing for this division.
"We enter 2013 with a RMB343 million cash position, healthy operational cashflows, and are well positioned to benefit from the Chinese economy's need for domestic logistics services as it switches to a model of increasing investment and internal consumption. Our core business is flourishing and we are looking forward with confidence to offering increased value and service to our varied customers."
For further information please visit www.chaintek-united.comor contact:
ChainTek | |
Derrick Wong (Finance Director)
Zhining Xu（Head of Investor Relations） | +86 159 8597 3034 or +65 9227 8485 +44 (0)7720 570 262 |
ZAI Corporate Finance | |
John Depasquale / Wei Wang | +44 (0) 20 7060 2220 |
Liberum Capital | |
Steve Pearce / Tom Fyson / Josh Hughes | +44 (0) 20 3100 2000 |
Cubitt Consulting | |
Simon Brocklebank-Fowler / Gareth David / Cebuan Bliss | +44 (0) 20 7367 5100 |
Chairman's Statement |
Dear Shareholder
It is with pleasure that I present to you the results of China Chaintek United Co., Limited for the year ended 31 December 2012, the first since China Chaintek was admitted to trading on the AIM market of the London Stock Exchange in August 2012.
Performance
Despite a general slow-down in growth in the PRC during 2012, the Group, whose business is to provide domestic logistics services to Chinese manufacturers of light goods, achieved robust growth with revenues and profit before tax exceeding the Board's expectations. Group revenues during the year increased by 30% to RMB340.6 million (2011: RMB262.7 million) and profit before tax was up by 27% to RMB253.5 million over the same period from RMB199.6 million. The Group's well-established Logistics Services Division contributed an increase of approximately RMB54.0 million to Group profit before tax year-on-year, and the more recently established Inventory Solutions Division, now into its second full year, almost doubled its revenue from RMB24.0 million in 2011 to RMB46.8 million in 2012.
Headquartered in Jinjiang City, the PRC's light manufacturing heartland in Fujian Province, and one of the fastest growing metropolises in the PRC, the Group's core Logistics Services Division is successfully diversifying from a heavy dependence on a customer base of shoe and apparel manufacturers (79% in 2011 and 71% in 2012) into the food and building materials industries, for which Fujian is also renowned. These latter industries now comprise 19% of Group revenues. The growth of the Inventory Solutions business has also been an encouraging development in the drive by the Company for greater diversification. Together with growth in Group revenues, there has been a strong growth in the Group's cash position, which reached RMB342.7 million as at 31 December 2012 (2011: RMB97.7 million).
The Group stated at the time of IPO that it intended to seek debt financing to complete the funding of a new logistics park, and investment in developing the Group's IT systems. Following the IPO, the Group has sought further funding from a number of banking institutions in the PRC and, in March 2013, the Group arranged a bank loan facility of RMB50 million. The coupon payable on the facility will be determined at the time of drawdown (but would be about 6.8%, based upon current rates) and is repayable one year after the drawdown. It has been provided by Bank of China and will be used to provide addition working capital for the Group. |
Admission to Trading on AIM
China Chaintek was admitted to trading on AIM on 20 August 2012, raising £7.5 million gross upon admission through the placing of approximately 4.7 million new Ordinary Shares at a price of 160p per share. China Chaintek's management retained a majority shareholding after the placing and they have agreed to a 12 month lock-in. At close of business on 27 March 2012, being the last practicable date prior to this publication, China Chaintek's shares traded at a price of 236.50p, a premium of 48% to the IPO placing price. |
Dividend Policy
As stated in the Group's Admission Document at the time of IPO, the Directors do not intend to pay a dividend for the financial year ended in 2012, as retained earnings are to be deployed in growing the Group's businesses through the construction of new facilities. However, the Board does intend that the Group shall pay cash dividends to Shareholders in the future when it is able and appropriate to do so. |
Board Governance
On admission to AIM, the Group set out to achieve a careful balance on the Board between the Executive Management and the independent Non-Executive Directors tasked with assisting the Group to maintain standards of transparency and good governance for the benefit of all its Shareholders. The Board is working well in accordance with these ideals; regular contact is maintained, and a schedule of regular Board meetings has been established. An AIM Committee of the independent Directors has been inaugurated to monitor the Company's compliance performance; regular liaison is maintained between the Audit Committee and the Group's auditors and the Nomination and Remuneration Committees will review annually the scope, cost and quality of services being provided by the various service providers to the Group. |
Outlook
There is mounting evidence that the PRC is moving from the bottom of a U-shaped business cycle and manufacturing activity is increasing in line with a rebalancing of the economy from investment to consumption; thereby providing a sustainable model for growth. China Chaintek is expected to benefit from this trend, diversifying its customer base at a time when experienced logistics providers and inventory managers are increasingly required by suppliers of light manufactured goods. The market is currently fragmented, with no dominant parties, but this is likely to evolve and your Group is gearing itself to meet the challenges of this trend. We look forward to a further year of sustainable growth.
I would like to thank all management and staff for their continuing diligent and energetic hard work. Thank you all. |
William Knight Chairman |
28 March 2013 |
Chief Executive's Review |
I am pleased to report that China Chaintek has made significant operational and financial progress during the past financial year. We have achieved the goals we set for ourselves at the beginning of last year, including the admission to trading on AIM, and have delivered another year of sound organic growth by providing first class services in both logistics and inventory solutions to our customers. Group revenues of RMB340.6 million and profit before tax of RMB253.5 million, both of which have grown consistently year on year, are testaments to the strength of the Group. The Group continues to be highly cash-generative, resulting in a cash position at year end of RMB342.7 million (2011: RMB 97.7 million).
The strong performance of the Group has been delivered by focusing on its strengths and pursuing its strategy for organic growth for its core business in logistics services. This has been achieved by targeting new customers and also continuing to develop its existing large-scale, long-term relationships by providing a full range of high quality service offerings. In addition, the launch in 2010 of our Inventory Solutions Division has enabled our customers to reduce their overall logistics and warehousing costs and, importantly, assist in retaining and strengthening the Group's relationships with customers.
Logistics Services Division
This division achieved full year revenues of RMB293.8 million, an increase of 23% over the previous year. Significant progress has been made in diversifying the customer base into new sectors, such as food and building materials. The new sectors accounted for 19% of the division's revenues. The net margin has been increased from 89% to 90% in 2012. The Group has identified other sectors into which to expand and also expects to benefit from increasing revenues from existing sectors.
Overall Chinese Logistics Market The PRC is the second largest economy in the world with a GDP in 2012 of approximately RMB51.9 trillion. It is expected that the PRC will remain as the world's second largest economy for the near future, with some commentators expecting that the PRC could overtake the USA as the world's largest economy by 2020.
The PRC is also undergoing a structural economic shift from an economy fuelled by exports to one of investment and internal consumption. The rapid growth of domestic income in the PRC is driving consumption, especially in respect of food, consumer goods and health care. Such economic adjustments continue to increase demand for logistics services in the PRC. Logistics costs are relatively high in the PRC where they were estimated to represent approximately 18% of GDP in 2010, compared to less than 10% of GDP in Europe and the USA in the same year.
The logistics market can be broadly divided into three categories, namely first party logistics, second party logistics and third party logistics (1PL, 2PL and 3PL). 1PL means logistic functions are carried out internally by a Group, and 2PL is the actual carrier and operator of a particular logistics service, for example DHL. 3PL describes logistics businesses like Chaintek, which provide freight forwarding services and which offer integrated solutions as well as subcontracted logistics and transportation services.
The size of the Chinese domestic logistics market as a whole is expected to double during the period of the PRC's "twelfth five-year plan", which ends in 2015. The continuing development of the PRC's logistics sector and the increase in operational efficiency is likely to further support and expedite the PRC's economic development. The logistics industry has become a growth driver for national economic development and is supported at Government level.
In a Chinese Government White Paper Plan of Adjustment and Revitalization of the Chinese Logistic Industry, published in 2009, the logistics industry was the only service industry listed in Government supported projects. Further, in August 2011, the State Council, or the PRC's cabinet, issued new guidelines to promote the development of the country's logistics industry. These guidelines include reduced taxation and land policies geared towards logistics enterprises.
Jinjiang City Logistics Market Low market concentration is a key characteristic of the Chinese logistics market. There are more than 700,000 logistics companies in the PRC and none has a market share over 2% of the total Chinese logistics market. This is in contrast, for example, to the USA, where the top eleven logistics companies accounted for approximately 66% of the USA logistics market.
Number of Customers The fall in customer numbers in 2012 to 289, from 309 in 2011, was due to China Chaintek having fewer smaller individual customers. However, there was a significant increase in the sales of bigger customers in 2012.
Since the beginning of 2013, China Chaintek has continued to win new business in both the logistics service and inventory solutions segments. To date, a total of eight new customers have been added, with seven in the logistics service business in Jinjiang City, covering the sectors of food, building material and automobile parts, and one in the inventory solutions business in the shoes sector in a regional distribution centre ("RDC") in Guangzhou.
Breakdown of Customers / Customer Concentration The Group has continued to diversify its customer base, particularly into the food and building materials industries which now comprise 19% of total revenue (11% in 2011). The division continues to reduce its reliance on shoes and apparel, which comprised 72% of revenue in 2012 (79% in 2011). The rest of the customers (i.e. bathroom products (bathtubs, basins and toilets), toys, outdoor recreational equipment and metal hardware) are relatively insignificant (about 10%).
Inventory Solutions Division
This division is focused on providing outsourced inventory storage and management services including sorting, packing, labelling and short term storage. The division achieved revenues of RMB46.8 million, an increase of 95% over the previous year. The division now accounts for 14% of Group revenues and, since its establishment in 2010, continues to grow in line with our strategy and expectations. Net margins have been increased from 27% to 47% in 2012.
The number of customers of the division remained unchanged (at five) in 2012, but the Group sees significant scope for growing the revenues of this division, which is explained under the Overall Group Strategy below.
Overall Group Strategy
In addition to a robust operational and financial performance, the Group also completed a significant corporate milestone by successfully listing on the AIM market of the London Stock Exchange in August 2012.
China Chaintek plans to build a new logistics park, including a larger CDC, open more RDCs in more regions and to continue developing its IT systems to strengthen its leading position in both logistics services and inventory solutions markets. China Chaintek is continuing to explore a number of strategies in order to seek avenues of financing available to complete the Group's capital project, but the Group is confident that the business can continue to grow with its existing facilities.
In March 2013 the Group arranged a bank loan facility of RMB50 million. The coupon payable on the facility will be determined at the time of drawdown (but would be about 6.8%, based upon current rates) and is repayable one year after the drawdown. It has been provided by Bank of China and will be used to provide additional working capital for the Group.
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Our management team has worked incredibly hard and performed exceptionally well to achieve this growth during the year and I would like to thank them for their commitment and efforts, without which we would not have been able to deliver such high quality, value added services for our customers. |
Meijin Xu Chief Executive Officer 28 March 2013 |
Consolidated statement of financial position as at 31 December 2012
| ||
31 December 2012 | 31 December 2011 | |
RMB | RMB | |
Assets | ||
Non-Current | ||
Land use right prepayments (note 2) | 30,106,119 | 30,776,029 |
Property, plant and equipment | 75,793,727 | 72,486,395 |
105,899,846 | 103,262,424 | |
Current | ||
Land use right prepayments (note 2) | 669,911 | 669,911 |
Trade and other receivables (note 3) | 144,460,690 | 118,219,965 |
Cash and cash equivalents | 342,712,249 | 97,746,651 |
487,842,850 | 216,636,527 | |
Total assets | 593,742,696 | 319,898,951 |
Equity and Liabilities | ||
Capital and reserves | ||
Share capital | 67,195,625 | 327,439 |
Merger reserve | (204,100) | (204,100) |
Statutory common reserve | 5,000,000 | 5,000,000 |
Capital reserve | 9,821,903 | - |
Warrant reserve | 13,184,433 | - |
Retained earnings | 465,794,574 | 279,212,825 |
560,792,435 | 284,336,164 | |
Liabilities | ||
Current | ||
Trade and other payables (note 4) | 18,663,909 | 22,948,587 |
Current tax payable | 14,286,352 | 12,614,200 |
Total liabilities | 32,950,261 | 35,562,787 |
Total equity and liabilities | 593,742,696 | 319,898,951 |
Consolidated statement of comprehensive income for the financial year ended 31 December 2012
| ||
Year ended | Year ended | |
31 December 2012 | 31 December 2011 | |
RMB | RMB | |
Revenue (note 5) | 340,585,459 | 262,736,832 |
Cost of sales | (57,026,047) | (44,985,958) |
Gross profit | 283,559,412 | 217,750,874 |
Other income | 3,230,675 | 643,827 |
Distribution expenses | (736,408) | (1,225,047) |
Administrative expenses | (32,532,210) | (17,573,673) |
Profit before taxation (note 6) | 253,521,469 | 199,595,981 |
Income tax expense (note 7) | (66,939,720) | (50,578,254) |
Profit for the year | 186,581,749 | 149,017,727 |
Other comprehensive income: | ||
Other comprehensive income (at nil tax) | - | - |
Total comprehensive income for the year | 186,581,749 | 149,017,727 |
Earnings per share (RMB) | ||
- Basic (note 9) | 3.61 | 2.98 |
- Diluted (note 9) | 3.56 | 2.98 |
Consolidated statement of changes in equity for the financial year ended 31 December 2012
| ||||||||
Statutory | ||||||||
Share | Merger | common | Capital | Warrant | Retained |
| ||
capital | reserve | reserve | reserve | reserve | earnings | Total |
| |
RMB | RMB | RMB | RMB | RMB | RMB | RMB |
| |
| ||||||||
Balance as at 1 January 2011 | 10,000,000 | - | 5,000,000 | - | - | 130,195,098 | 145,195,098 |
|
| ||||||||
Total comprehensive income for the year |
| |||||||
- Profit for the year | - | - | - | - | - | 149,017,727 | 149,017,727 |
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Total comprehensive income for the year | - | - | - | - | - | 149,017,727 | 149,017,727 |
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| ||||||||
Transactions with owners recognised directly in equity |
| |||||||
Contributions by and distributions to owners |
| |||||||
- Restructuring Exercise | (10,000,000) | (204,100) | - | - | - | - | (10,204,100) |
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- Issue of share upon incorporation | 6 | - | - | - | - | - | 6 |
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- Issue of shares | 327,433 | - | - | - | - | - | 327,433 |
|
Total transactions with owners | 327,439 | (204,100) | - | - | - | - | (9,876,661) |
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| ||||||||
Balance as at 31 December 2011 | 327,439 | (204,100) | 5,000,000 | - | - | 279,212,825 | 284,336,164 |
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| ||||||||
Total comprehensive income for the year |
| |||||||
- Profit for the year | - | - | - | - | - | 186,581,749 | 186,581,749 |
|
Total comprehensive income for the year | - | - | - | - | - | 186,581,749 | 186,581,749 |
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Transactions with owners recognised directly in equity |
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Contributions by and distributions to owners |
| |||||||
- Advance from a Shareholder waived | - | - | - | 9,821,903 | - | - | 9,821,903 |
|
- Issue of shares upon Initial Public Offering | 66,868,186 | - | - | - | - | - | 66,868,186 |
|
- Issue of Warrants | - | - | - | - | 13,184,433 | - | 13,184,433 |
|
Total transactions with owners | 66,868,186 | - | - | 9,821,903 | 13,184,433 | - | 89,874,522 |
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| ||||||||
Balance as at 31 December 2012 | 67,195,625 | (204,100) | 5,000,000 | 9,821,903 | 13,184,433 | 465,794,574 | 560,792,435 |
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Consolidated statement of cash flows for the financial year ended 31 December 2012
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Year ended | Year ended |
| |
31 December 2012 | 31 December 2011 |
| |
RMB | RMB |
| |
| |||
Cash Flows from Operating Activities |
| ||
Profit before taxation | 253,521,469 | 199,595,981 |
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Adjustments for: |
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Amortisation of land use rights prepayments | 669,910 | 445,576 |
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Equity-settled share-based payment expense | 4,977,160 | - |
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Depreciation of property, plant and equipment | 3,691,087 | 2,270,119 |
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Loss on disposal of property, plant and equipment | 61,125 | 71,516 |
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Interest income | (617,125) | (257,419) |
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Operating profit before working capital changes | 262,303,626 | 202,125,773 |
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Changes in trade and other receivables | (26,240,725) | (43,244,151) |
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Changes in in trade and other payables | 888,946 | 3,974,057 |
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Cash generated from operations | 236,951,847 | 162,855,679 |
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Income tax paid | (65,267,568) | (46,580,203) |
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Net cash generated from operating activities | 171,684,279 | 116,275,476 |
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Cash Flows from Investing Activities |
| ||
Acquisition of land use rights | - | (22,433,400) |
|
Acquisition of property, plant and equipment | (7,091,920) | (49,566,883) |
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Proceeds from disposal of property, plant |
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and equipment | 32,376 | 719,320 |
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Interest received | 617,125 | 257,419 |
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Net cash used in investing activities | (6,442,419) | (71,023,544) |
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| |||
Cash Flows from Financing Activities |
| ||
Advance from a Shareholder | 4,648,279 | 2,264,023 |
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Net proceeds from issue of shares upon Initial Public Offering | 75,075,459 | - |
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Net cash generated from financing activities | 79,723,738 | 2,264,023 |
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| |||
Net increase in cash and cash equivalents | 244,965,598 | 47,515,955 |
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Cash and cash equivalents at beginning of year | 97,746,651 | 50,230,696 |
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Cash and cash equivalents at end of year | 342,712,249 | 97,746,651 |
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Notes to the Results for the financial year ended 31 December 2012
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1 General information China Chaintek was incorporated as an exempted limited liability in Cayman Islands on 13 April 2011 as a result of a group restructuring (the "Restructuring Exercise") in preparation for the proposed listing of the Company's shares on the AIM market of the London Stock Exchange. The Company's registered office is at P.O. Box 1034, Grand Cayman KY1-1102, Cayman Islands. The Company's shares were admitted to trading on the AIM market of the London Stock Exchange on 20 August 2012.
The principal activities of the Company are those related to investment holding. The principal activities of the subsidiaries are logistics services and inventory solutions.
Full notes to the financial information are disclosed in the Group's Report and Consolidated Financial Statements, which the Board expects to release by 10 April 2012. | |||
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2 Land use rights prepayments | |||
31 December 2012 | 31 December 2011 |
| |
RMB | RMB |
| |
Cost |
| ||
At 1 January | 33,495,525 | 11,062,125 |
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Additions | - | 22,433,400 |
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At 31 December | 33,495,525 | 33,495,525 |
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Accumulated amortisation |
| ||
At 1 January | 2,049,585 | 1,604,009 |
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Amortisation for the year | 669,910 | 445,576 |
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At 31 December | 2,719,495 | 2,049,585 |
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| |||
Carrying amount at 31 December | 30,776,030 | 31,445,940 |
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Presented as: |
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Current assets | 669,911 | 669,911 |
|
Non-current assets | 30,106,119 | 30,776,029 |
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30,776,030 | 31,445,940 |
| |
3 Trade and other receivables | ||
31 December 2012 | 31 December 2011 | |
RMB | RMB | |
Trade receivables | 79,573,035 | 52,432,277 |
Non-trade amounts due from Shareholders | - | 327,439 |
Rental deposits | 9,128,460 | 13,021,860 |
Deposit for acquisition of land use rights | 52,000,000 | 52,000,000 |
Advance payment to information technology vendor | 3,250,000 | - |
Insurance prepayments | 509,195 | 405,473 |
Others | - | 32,916 |
64,887,655 | 65,787,688 | |
Total | 144,460,690 | 118,219,965 |
4 Trade and other payables | |||
31 December 2012 | 31 December 2011 | ||
RMB | RMB | ||
Trade payables | 4,560,104 | 3,582,527 | |
Other payables | |||
Deposits from transportation agents | 4,000,000 | 4,000,000 | |
Advance from a Shareholder* | 6,975,275 | 12,140,684 | |
Accrued payroll costs | 729,790 | 778,917 | |
Accrued professional fees | 1,106,700 | 1,709,918 | |
Accrued social insurance | 209,593 | 163,484 | |
Other tax payables | 840,554 | 505,113 | |
Amounts owing to Shareholders** | - | 8,215 | |
Others | 241,893 | 59,729 | |
14,103,805 | 19,366,060 | ||
18,663,909 | 22,948,587 | ||
* | At 31 December 2011 and 2012, the advance from a Shareholder related to an advance from Mrs Xu to provide working capital for Chaintek United. The advance from a Shareholder was unsecured, interest-free and repayable in cash on demand. Pursuant to an agreement entered into with Mrs Xu, the Shareholder waived a portion of the advance amounting to RMB9,813,688 during the financial year ended 31 December 2012. The advance amount waived was considered as a capital contribution from the Shareholder and recognised directly in equity under capital reserve.
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** | On 27 June 2011, in connection with the restructuring exercise, the Company acquired 100% of the equity interest of Chaintek United for a purchase consideration of HK$10,000 (RMB8,215) based on the nominal issued share capital of Chaintek United. The purchase consideration was outstanding at 31 December 2011. During the financial year ended 31 December 2012, the former Shareholders of Chaintek United, Mr Zhuang and Mrs Xu, waived the amount which was unsecured and interest free. Mr Zhuang and Mrs Xu are Shareholders of the Company after the restructuring exercise. The amount waived was considered as capital contributions from the Shareholders and recognised directly in equity under capital reserve. | ||
5 Revenue | ||
Year ended 31 December 2012 | Year ended 31 December 2011 | |
RMB | RMB | |
Logistics services | 293,758,400 | 238,735,518 |
Inventory solutions | 46,827,059 | 24,001,314 |
340,585,459 | 262,736,832 |
6 Profit before taxation | ||
The following items have been included in arriving at profit before taxation:
| ||
Year ended 31 December 2012 | Year ended 31 December 2011 | |
RMB | RMB | |
Amortisation of land use rights | 669,910 | 445,576 |
Equity-settled share-based payment expense | 4,977,160 | - |
Loss on disposal of property, plant and equipment | 61,125 | 71,516 |
Depreciation of property, plant and equipment | 3,691,087 | 2,270,119 |
Operating lease expense | 7,609,484 | 7,281,203 |
Exchange gain | 1,063,550 | 386,408 |
Staff costs | ||
Key management personnel: | ||
- Directors | ||
- Directors' remuneration | 1,578,767 | 755,400 |
- Contributions to defined contribution plans | 2,508 | 6,129 |
- Other than Directors | ||
- Salaries, wages and other related costs | 1,215,719 | 870,200 |
- Contributions to defined contribution plans | 5,705 | 8,540 |
Other than key management personnel: | ||
- Salaries, wages and other related costs | 21,500,116 | 17,045,624 |
- Contributions to defined contribution plans | 2,294,869 | 1,223,500 |
26,597,684 | 19,909,393 | |
7 Income tax expense |
| ||
Year ended 31 December 2012 | Year ended 31 December 2011 | ||
RMB | RMB | ||
Current taxation | 66,939,720 | 50,578,254 | |
Reconciliation of effective tax rate | |||
Profit before taxation | 253,521,469 | 199,595,981 | |
Tax at the PRC statutory rate of 25% (2011 - 25%) | 63,380,367 | 49,898,995 | |
Differences in foreign tax rate | 2,613,403 | 185,828 | |
Tax exempt income | (387,500) | - | |
Non-deductible expenses | 149,513 | 132,706 | |
Deferred tax assets on losses not recognised | 1,183,937 | 360,725 | |
66,939,720 | 50,578,254 | ||
No deferred tax asset or liability is recognised, principally as a result of the Group's taxable profit equating to its accounting profit, and there being no differences between the tax basis of assets and liabilities and the carrying values in the statement of financial position.
At the reporting date, the Group has unabsorbed tax losses of approximately RMB9,356,000 (2011: RMB2,186,000) attributable to a subsidiary.
The Group has not recognised a deferred tax asset in respect of the tax because management believes that it is not probable that these tax losses would be allowed by the tax authorities. |
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8 Operating segments For management reporting purposes, the Group is organised into the following reportable operating segments:
(a) Logistics services - includes the provision of land transportation services.
(b) Inventory solutions - includes the provision of warehousing services.
(c) Corporate - includes investment holdings and Corporate Office which incurs general corporate expenses.
Intra- and inter-segment transactions were carried out at terms agreed between the parties during the financial year. Intra- and inter-segment transactions were eliminated in preparing the consolidated financial statements.
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Geographical information The Group's operations are located in the PRC and all of the Group's revenue is derived from services provided to customers in the PRC. Hence, no analysis by geographical area of operations is provided.
Major customer Five of the customers accounted for more than 10% of the Group's total revenues for the years ended 31 December 2011 and 2012. |
9 Earnings per share | ||
Year ended 31 December 2012 | Year ended 31 December 2011 | |
RMB | RMB | |
Net profit after taxation (RMB) | 186,581,749 | 149,017,727 |
Weighted average number of Ordinary Shares used in calculation of basic earnings per share | 51,724,332 | 50,000,000 |
Effective of dilutive potential Ordinary Shares weighted average number of Warrants | 618,181 | - |
Weighted average number of Ordinary Shares used in calculation of diluted earnings per share | 52,342,513 | 50,000,000 |
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Earnings per share - | ||
Basic (RMB) | 3.61 | 2.98 |
Diluted (RMB) | 3.56 | 2.98 |
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10 Subsequent Events (a) Acquisition of land use right On 18 June 2010, Fujian Xingtai entered into a letter of intent with the People's Government of Cizao Town, Jinjiang City, Fujian Province, the PRC, to acquire a land use right for construction of central distribution facilities. As of 31 December 2012, Fujian Xingtai had paid a deposit of RMB52 million (Note 7).
In March 2013, Fujian Xingtai was granted a land use right certificate by the local authority for a land area of approximately 145,600 square meters at a fee of RMB273 million. Subsequently, Fujian Xingtai has made a payment to the local authority amounting to RMB81.9 million. Payment of the remaining balance of RMB133.9 million is due in September 2013.
(b) Loan facility In March 2013 the Group arranged a bank loan facility of RMB50 million. The coupon payable on the facility will be determined at the time of drawdown (but would be about 6.8%, based upon current rates) and is repayable one year after the drawdown. It has been provided by Bank of China and will be used to provide addition working capital for the Group. | ||
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