(MENAFNEditorial) D & G Technology announces 2017 Interim Results Revenue and net profit increased by 46.6% and 38.9% respectively
Highlights
- Total revenue increased approximately 46.6% y-o-y to approximately RMB
238.6 million
- Gross profit increased to approximately RMB95.7 million, representing a y-o-y increase of approximately 43.0%
- Profit attributable
to owners of the Company increased by approximately 38.9% to approximately
RMB14.1million
- The sales contracts of asphalt mixing plants completed by the Group increased
from 18 to 28 as compared with last corresponding period
- Continued
to expand business and entered into potential markets in the "One Belt One
Road" countries, apart from subsidiaries set up in Singapore and India in prior
years, a wholly-owned subsidiary in Pakistan was set up during the period, principally
engaged in leasing of asphalt mixing plants and provision of customized solutions
to the local markets in Pakistan.
Financial Highlights
Six months ended 30 June
RMB'000 2017
2016 Change
Revenue 238,563
162,767 +46.6%
Gross Profit 95,743
66,976 +43.0%
Profit for the period attributable to owners of the Company 14,125
10,170 +38.9%
Earnings per share attributable to owners of the Company during the period (RMB cents) 2.3
1.6 +43.8%
HONG KONG, CHINA --29 August
2017 - ("D & G Technology" or the "Group" ; HKSE:
1301), a leading medium-to-large scale asphalt mixing plant manufacturer and
service provider in China, announced its interim
results for the six month ended 30 June 2017. During the period, the Group recorded
a total revenue of approximately RMB238.6 million (2016 corresponding period:
approximately RMB162.8 million), representing an increase of approximately
46.6%. Profit attributable to owners of the Company was approximately RMB14.1
million (2016 corresponding period: approximately RMB10.2 million), representing
an increase of approximately 38.9%.
During the period, earnings per share were RMB2.3 cents (2016
corresponding period: RMB1.6 cents).
Business Review
During the period, the
Group continued to participate in top-tier highways construction and
maintenance projects in the PRC and overseas countries. There were 28 (2016:
18) sales contracts of asphalt mixing plants completed by the Group during the period
and the asphalt mixing plants were used in major highway construction and
maintenance projects such as Waiwu Expressway (威烏高速), Lungtsing
Expressway (龍青高速),
Waiyat Expressway ( 濰日高速) etc. Out of the 28 asphalt mixing plants
sold during the period, 1 asphalt mixing plant was sold to Hong Kong and 8 were
sold to overseas countries including 5 to Russia, 2 to Angola and 1 to Pakistan.
The increase in demand for asphalt mixing plants resulted in an increase of
approximately 58.3% of revenue from sales of asphalt mixing plants during the
period, whereas, the sales of asphalt mixing plants accounted for approximately
85.8% (2016: 79.4%) of the total revenue of the Group during the period.
The Group continued
to expand its business and entered into potential markets in the "One Belt One
Road" countries. During the period, the Group has signed a sale contract with a
customer in Malaysia and the contract is expected to be completed in the second
half of the year. Besides, a wholly-owned subsidiary was set up in Pakistan which
is principally engaged in leasing of asphalt mixing plants and provision of
customized solutions to the local markets in Pakistan. With the established
overseas network, the Group is prepared to participate in the upcoming road
construction projects along the "One Belt One Road" countries.
In order to provide
one-stop total solution to the customers, the Group has set up a wholly owned
subsidiary engaged in finance leasing in Shanghai Free-Trade Zone and commenced
its finance leasing business in late 2016. The capital contributed to the
finance leasing business amounted to RMB50 million as at 30 June 2017 and the
finance leasing business generated interest income of approximately RMB1.8
million during the six months ended 30 June 2017.
Sales
of asphalt mixing plants business
Revenue from the
sales of asphalt mixing plants increased as a result of the increase in number of
contracts as well as the increase in average contract value. The increase in
number of contracts was mainly due to increase in road construction projects in
China and overseas during the period. Overall Gross profit margin remained
stable at approximately 38% during the period. Revenue from the sales of
Recycling Plant increased by 137.6% which was mainly due to an increase in
number of contracts offset by the slightly decrease in average contract value
during the period.
Sales
of spare parts and components and provision of equipment modification services
business
Revenue from sales of
spare parts and components and provision of equipment modification services
increased by approximately 6.2% during the period. Gross profit margin
increased by 18.2 percentage points during the period which was mainly due to
improvement in gross profit margin of both sales of spare parts and components
and modification services.
Operating lease
income of asphalt mixing plants
Revenue from
operating lease of asphalt mixing plants slightly decreased by 8.3% primarily because
the total volume of productions during the period were lower compared with the
last period even though the number of operating agreement increased from 9 to
10 during the period.
Development of
Upstream and Downstream Asphalt Related Business
During the six months
ended 30 June 2017, the Group continued to conduct research on the combustion
technology in order to develop the business of manufacturing and sale of burner
combustion equipment and the provision of related technical support services.
The burner combustion equipment can be applied in a wide spectrum including
asphalt mixing plants, furnace, heating system, etc. As at 30 June 2017, the
combustion technology is still in research phase and the Group is preparing to
patent the combustion technology once developed.
Research & Development
During the period, the
Group had 51 (31 December 2016: 49) registered patents in the PRC (of which 4
were invention patents) and 24 (31 December 2016: 22) software copyrights. In
addition, 5 patents were pending registration as at 30 June 2017. The Group
continued to cooperate with the Research Institute of Highway, Ministry of Transport
( 交通運輸部公路科學研究院)
and Institute of Tsinghua University, Hebei (河北清華發展研究院) in a number of
national technical support projects focusing on energy saving, emission
reduction, environmental protection and recycling aspects of resources
recycling. The current research and development projects include "Asphalt
Pavement Recycling Technology Equipment and Demonstration", which is a project
subsidised by the PRC government and expected to be completed in late 2017.
Future Prospects
Looking forward, the
Group expects the PRC government to continue adopting policies to stimulate the
economy and maintain currency stability. In light of growing awareness on
environmental protection issues during the asphalt mixture production among the
road construction and maintenance companies and the PRC government's emphasis
on reducing pollution from industrial sector, the Group believes there is a
growing demand for our recycling and environmentally-friendly products. The
Group expects the demand for recycling asphalt plants as well as the modification
services of adding recycling and environmental protection functions to existing
plants to increase. The Group will further promote green technology innovation
and continue to improve its competitive advantage so as to reinforce its leading
position in the market.
"One Belt One Road"
is a core development strategy in the PRC covering a broad spectrum of
economic, political and social aspects of Mainland China and abroad. Investment
in infrastructure overseas is a way of building up strategic partnerships with
countries in the "One Belt One Road" region. Recently, the Group has
participated in numerous "One Belt One Road" construction projects led by China
state-owned enterprises, including major expressway construction project of the
"China-Pakistan Economic Corridor", and the project of "Central Asia Economic
Corridor". The Group is honored to participate in the major infrastructure construction
projects along the "One Belt One Road" countries, and is prepared for more projects
in the future.
Ms.
Glendy CHOI, Executive Director and Chief Executive Officer of D & G
Technology, said, "We expect the demand for asphalt mixing plants in the
second half of 2017 shall remain strong and more projects along the 'One Belt
One Road' regions . The Group shall take the momentum forward and develop its
business in the industry."
About D & G Technology Holding Company
Limited
D & G Technology is a leading
medium-to-large scale asphalt mixing plant manufacturer and service provider in
China. The Group's core products include conventional hot-mix asphalt mixing
plants and hot-mix asphalt mixing recycling plants. Asphalt mixtures produced
by these plants are used in construction and maintenance of all grades of roads
and highways. The Group also offers asphalt mixing plant customer services
including sales of spare parts and components and provision of equipment
modification services and leasing of asphalt mixing plants through operating
leases. With headquarters in Hong Kong and a production base in Langfang,
Hebei, D & G Technology is certified as a high-technology enterprise in Hebei
and enjoys a preferential enterprise income tax rate of 15%. Its products are
sold to most provinces, municipalities and autonomous regions in China. The
Group has asphalt mixing plants projects in a total of 23 countries, including
Australia, Russia, India, Thailand and Brunei, etc. For more details, please
refer to: .
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