2017Annual Results Announcement

Transcription

1 217Annual Results Announcement

2 Company Profile Company Highlights Business Review Strategic Planning & Future Prospects 2

3 Company Profile

4 Background Company Name:Youyuan International Holdings Limited. Stock Code:2268.HK Listing Time:May, 21 Geographic Position :Jinjiang&Zhangzhou, Fujian Province Main Production Plants :Youlanfa Factory Xiyuan Factory Huaxiang Factory Senry Factory Capacity :418tons of Wrapping Tissue Paper and other products and 27 rolls of wallpaper Core Products:Wrapping Tissue Paper, Wallpaper, Copy Paper, Wallpaper Backing Paper Major Honors:The company has been titled Top 3 Pulp and Paper-making Enterprise by the China paper industry association. 4

5 Production Plants & Capacity 1% 1% 1% 8% Youlanfa Factory Xiyuan Factory Huaxiang Factory Senry Factory Youlanfa Factory is located in Jinjiang, Quanzhou, Fujian Province, covering an area of 12 mu, and the starting time of production was in It mainly manufactures wrapping tissue paper, copy paper, and other products. The factory now has 9 production lines and the designed capacity is 99, Xiyuan Factory is located in Longhai, Zhangzhou, Fujian Province, covering an area of 85 mu and the starting time of production was in 26,. It mainly manufactures wrapping tissue paper, wall paper backing paper and copy paper. The factory now has 13 production lines and the designed capacity is 177, tons. Huaxiang Factory is located in Jinjiang, Quanzhou, Fujian Province. The starting time of production was in 26, covering an area of 61 mu. It mainly manufactures wrapping tissue paper and other products. The factory now has 15 production lines and the designed capacity is 142, tons. Senry Factory is located in Longhai, Zhangzhou, Fujian Province, covering an area of 83 mu, and the starting time of production was in 214. It mainly manufactures and distribute environmental-friendly wallpaper products, including non-woven wallpaper, PVC wallpaper, wall cloth, etc. The factory now has 14 production lines of wall paper and is cable of produce 27 million rolls of wallpaper. tons. 5

6 Product Overview Wrapping Tissue Paper Wall Paper Copy Paper Wall Paper Backing Paper Wrapping tissue paper with basis Non-woven Wallpaper Copy paper usually has a Mainly used for wall paper materials weight of 14 gram per meter Pvc wall paper basis weight of 7 g/m2 and square ( g/m2 ) to 17 g/m2 and Wall Cloth is used in photocopiers are commonly used in wrappings for food clothing, footwear etc Double-sided MF tissue paper Single-sided MF tissue paper Semi-transparent paper Food Wrapping Paper XiaoxiuCai Xiaoshentong Red OK Blue OK 6

7 Development History First production line designed for the production of copy paper and doublesided MF tissue paper was introduced. The Company acquired a number of provincial awards and recognitions such as High-Tech Enterprise Enterprise of Outstanding Creditworthiness for Industry and Commerce Famous Trademark of Fujian Province Provincial-level Enterprise Technology Centre of Fujian Province Famous Branded Products of Fujian Province etc. 214,produce wallpaper; 214,produce wallpaper backing paper 217,acquisition of 8% shares of Xin Wing Group / / / 218 Youlanfa Paper Co., Ltd. Fujian was incorporated and manufactured corrugated paper. Fujian Xiyuan Paper Co., Ltd. and Quanzhou Huaxiang Paper Industry Co., Ltd. were incorporated and engaged in the production of MF tissue paper. Our first de-inked facility was built and successfully used for recycled pulp in the production of wrapping tissue paper. Youyuan acquired Top 3 Pulp and Papermaking Enterprise in the PRC in 28 and was listed on the main board of the HK Stock Exchange in May, 21. During the period, the Company began to develop semi-transparent paper and more business lines. 7

8 Company Highlights

9 Strengths Scale Technology and R&D Cost Management The largest wrapping Strong R&D The use of recycled raw Experienced tissue paper manufacturer capabilities to materials conforms to the trend management and in China, taking the lead in ensure industry of green and environmental stable operation team. the industry. competitiveness. protection and leads to significant cost advantages. 9

10 Strengths The Company maintains the leading wrapping tissue paper manufacturer in China since 28 and owns the biggest production base of wrapping tissue paper. The sales volume of the of wrapping tissue paper of 217 reached 22 thousands tons. According to China Paper Industry Association, the sales volume of the product ranks the first nationwide. As the industry navigator, the Company has the pricing power for occupying 2-25% market share in 216. The Company is the setter of the standard requirements of China's wrapping tissue paper industry with advanced technology and R&D capabilities of the paper industry nationwide. 1

11 Technology Strength Technology Strength Youyuan is the industry leader utilizing de-inked pulp to produce transparent wrapping paper in China. The Company has 3 production lines of de-inked pulp, with an annual designed capacity of 176, tons. R&D Strength Limited Resources Limitless Cycles Youyuan has been committed to the research and development of technological improvements. The Company maintains long-term cooperation with many research and educational institutions to produce more environment friendly packaging materials. Among them, Youlanfa, Xiyuan and Senry obtained High- Tech Enterprise Certificate and enjoyed preferential tax rates. 11

12 R&D Strength Future R&D Direction Medical paper & Food wrapping paper, etc R&D Purpose Concentrate on developing paper products and improving production process to improve efficiency and reduce costs. R&D Achievements Papermaking and waste water recycling technology surrounding self-developed wastewater processing plant New classic machine-finished(mf) tissue paper production technology Technology of de-inked pulp production tissue paper technology The ultra-thin single-sided MF tissue paper was recognized by Quanzhou Science and Technology Bureau as an advanced technology product. R&D Investment The company spends substantially on R&D every year with a total investment of 12 million RMB in the last three years, taking the lead in the industry. 12

13 Cost Advantage Waste Paper Youyuan is one of the few companies that has the ability to manufacture productive recycled raw materials(de-ink pulp mainly). The use of the de-inked pulp increases by year, enabling the company to maintain stable income under wood pulp price fluctuation. The company is equipped with 3 sets of 176, tons of de-inked facility, which can remove ink and color from waste paper and convert it into pulp, thereby reducing the amount of wood pulp, so that the production cost is reduced significantly. Recycling Materials Usage Paper Products , ton The use of recycled raw materials conforms to green and environmental protection trend and leads to significant cost advantages , ton 13

14 Management Strength Ke Wentuo Ke Jixiong Wong Yat Sum Cao Xu Zhang Guoduan Huang Baojiao Chairman, Founder Chief Executive Officer CFO Company Secretary Youlanfa Deputy GM Xiyuan Deputy GM Senry Deputy GM Responsible for the Responsible for supervising Responsible for company Responsible for the Responsible for managing the Responsible for sales overall strategic the production and sales of budget and financial management of the production procedures of xiyuan management and daily planning and business the company and daily management and production procedures of the factory, participating in the operation management of development of the operation management supervision. company, participated in the company's r&d project Fujian Senry Factory company Over 15 years of paper FCPA,FCCA company's research and mechanical engineer, and environmental protection Over 25 years of paper industry experience. development project having over 29 years of paper Wallpaper Co., Ltd. More industry experience. Mechanical engineers and industry experience. than 8 years wallpaper registered senior managers, manufacturing management with over 15 years of paper experience. industry experience. The management has solid industry knowledge and rich business experience, with an average of over 25 years paper industry experience. 14

15 3 Business Review

16 Financial Highlights (RMB million) Revenue (RMB million) Gross Profit 46. 6% 2, % 891 2, 1, , ( 元 RMB million) Profit and Total Income 29.7% 99.% 618 * 962 3, 15, (Tons) 288,9 Sales Volume 15.1% (Million rolls) 332, For the year ended 31 December * Core profit, profits from disposal of deem associated companies were deducted 16

17 主要运营数据 Year Projects Gross Profit Margin (%) 33.8% 3.8% Net Profit Margin (%) 36.5%, 23.4% 17.3% * 7% 9% 9% 216 年 75% 收益细分 Wrapping tissue paper Wallpaper and wallpaper backing paper Copy paper Other products 2% 8% 8% 217 年 64% Inventory Turnover Cycle Accounts Receivable Turndays Accounts Payable Turndays % Gross Profit Margin Overview 46.8% 33.% 32.6% 31.9% 29.4% 26.9% Cash Conversion Cyle (days) % 14.3% 13.6% Basic Earnings Per Share/ Diluted Earnings Per Share (RMB) For the year ended 31 December.799 / /.262 * Core profit, profits from disposal of deem associated companies were deducted.% Wrapping tissue Copy paper Wallpaper and wallpaper backing paper Other products 17

18 Performance of Wrapping tissue paper For the year ended 31 December (RMB million) 1,2 1,347 Revenue 收益细分 (RMB million) 25.% 1, % Gross Profit (Tons) 22, Sales Volume Average Selling Price (RMB/Tons) 224,6 11.1% 12.5% 7,2 7,5 2, 22, 6,7 6,7 18, ,

19 Performance of Copy Paper For the year ended 31 December (RMB million) Revenue (RMB million) 收益细分 Gross Profit 3.9% % (Tons) 3, 28,7 Sales Volume 21.7% 35, (RMB/Tons) Average Selling Price 7.5% 6,2 6, 2, 5,8 1, 5, ,

20 Performance Of Wallpaper (The Whole Year) For the year ended 31 December 1, (RMB million) 8 Revenue 25.7% 1,6 (RMB million) 收益细分 458 Gross Profit 27.8% (RMB million) 247 Net Profit 26.1% 312 (Million rolls) Sales Volume 19.5%

21 Performance Of Wallpaper (consolidated data after acquisition attributable ) From 1 September 217 to 31 December 217 (RMB million) Revenue 375 (RMB million) 收益细分 Net Profit Sales Analysis Average Selling Price (Million rolls) N paper 等外品 4 (RMB /rolls) Non-woven 无纺 Type two Non-woven N paper 二型 Type two 39 21

22 Raw Materials For the year ended 31 December Raw Materials By Quantity (Kilotons) De-inked Pulp Usage % % 44% 216 Productivity Output % 56% (RMB/ton) Average Cost In % 4 Wood Pulp De-inked Pulp Other 2 29 Inner Circle:216 Outer Circle:217 Wood Pulp De-inked Pulp 22

23 Balance Sheet Overview Projects Year Total Assets 7,38,311 4,694,861 Bank Balances And Cash 846, ,179 Non-current Assets 4,577,14 2,779,719 Investment On An Associate - 627, Inventory 117,274 74,662 Non-current Bank Loans 789,79 1,161,467 Current Bank Loans 66,14 519,631 Notes And Convertible Bonds 695,77 - Total Liabilities 3,135,138 1,973,458 Minority stockholder's interest 38,981 - Equity 3,792,192 2,721,43 Total bank borrowings,notes and CB/ Total Assets 29.4% 35.8% Net bank borrowings,notes and CB / Equity 34.3% 44.7% 23

24 Acquisition of Xin Wing to engage in the wall paper industry Xin Wing s Senry Factory owns two well-known brands Senry" and I m free ", awarded The National Top Ten Wallpaper", The Most Influential Brand", Top 1 Enterprise of Independent Innovation etc.; And won The National Technological Innovation Gold Award for three consecutive years from 214 to 216. Fujian Senry Environmental Wallpaper Co., Ltd is a relatively largest -scale enterprise specialized in R&D and design, production, sales of environment -friendly wallpaper in the world. The first term covers an area of 83 mu, and the total investment of the project exceeds RMB 2 billion, possessing the world's most advanced production equipment including STORK, Emerson & Renwick, etc. Youyuan will be able to achieve vertical business integration with the wallpaper product department to better control the cost and distribution of the wallpaper backing paper business, thereby the company enters into the downstream sector and transforms from a wrapping paper manufacturer to a wallpaper manufacturer under self-owned brand. Senry factory is located in Longhai, Zhangzhou, Fujian Province. The production time of the factory was in 214 and it covers an area of 83 mu, mainly produces and distributes eco-friendly wallpaper products including non-woven wallpaper, PVC wallpaper. Currently, there is a total of 14 wallpaper production lines which can produce 27 million rolls of 1-meter-long wallpaper, providing a series of 47 mid-to-high end wallpaper types and more than 5, product designs. In 217, the sales volume of the wall paper recorded 2,82 thousand rolls. 24

25 4 Strategic Planning & Future Prospects

26 Industry Adjustment And Integration Ensures Stable And Healthy Development For Paper Industry In China The market demand of paper continued booming Prices and sales of paper products on the rise The price of wood pulp appeared to rise due to the tight supply. The price of wood pulp will remain high while the demand from the downstream sector continues to be robust in the future. The steady growth of the consumer goods market has provided strong support for the sales of paper-making and paper products, among which the growth of e-commerce and express industry has led to the increasing demand for packaging paper. The price of paper remains high nationwide bringing golden growth opportunities of the domestic paper industry. As further implementation of the reform of the supply side, the government has strengthened the environmental supervision and rectification of the paper industry. It will be a long-term trend to eliminate outdated production capacity with high energy consumption and non-environmentalfriendly regulations. Barriers to entry into the papermaking industry will be higher and higher under the strict policy. Policy and regulations are tightening The industry faces new structure The Ministry of Environmental Protection has strengthened administration on approval of imported waste paper since May, 217. The amount of imported waste is running out and the price of waste has hit a record high. Increases in cost provide support for the rise in paper prices. Although there is a seasonal pullback in future prices, it may still maintain a high level. The production capacity of small and medium sized paper enterprises will continue to clear, and the leading enterprises will further expand production to increase market share. The industry concentration will be therefore enhanced. 26

27 The wallpaper industry sees growth opportunity Expected to bring new profit growth stream According to Forward Industrial institute, the utilization rate of wallpaper in Europe and America is more than 5%, while that in Japan and South Korea are above 98%. The coverage of wallpaper in the domestic market is only close to 15%, indicating a large room for growth. From 211 to 217, the overall output of wallpaper in China was on the rise. By 223, the market size of wallpaper industry is expected to reach 62.7 billion approximately. In February 217, the government enacted and issued relevant standards for the wallpaper industry, which triggered increasing attention on the industry. In the future, as the polic y inclines towards the regulated wallpaper industry, the product quality is expected to improve steadily, and the prices is expected to return to norm al levels, enabling f avorable developm ent of the indus try. The new acquisition of the wallpaper business is of higher valueadded and that it is expected to become the new revenue and profit growth stream for the Group, which will provide important support for the Group's profit growth. 27

28 Development Strategy Maintain leadership in the wrapping tissue paper market Acquisition of Xin Wing to further enrich product range and realize synergy effect Enhance the brand awareness of our wrapping tissue paper products marketed under the "Youlanfa" trademark Reinforce supporting facilities to support future production expansion Through steady expansion of capacity to maintain leadership and growth in market share, and continually focused on highend products such as wallpaper backing paper and f ood wrapping paper. Leveraging on the vigorous development of e-commerce to consolidate our position in the traditional field of wrapping tis s ue paper. Through the acquisition of XinW ing s wallpaper business to enrich product structure and increase profit margin so that improve the Company s overall performance and the market position in the paper manufacturing value c hain. Taking an advantage of the ongoing recovery of residential property market in China, the Company aims at the sustained demand of high -end home decoration products, and will penetrate into the new wallpaper backing paper and the wallpaper areas. In 211, the Company successfully applied for the registration of YouLanFa" trademark as "China W ell- Known Brand", and will further enhance the brand awareness. W ith the development of local economy in the northwest, southwest and north China, the demand for packaging materials is increasing, and the Company is expected to seize the opportunity in such areas. To use newly added de-ink pulp capacity to meet the increasing demand of production capacity. The use of de-ink pulp to replace wood pulp will further reduce production cost. Propose to build a thermoelectric unit at the XiYuan Factory, and it will significantly reduce the reliance on local utilities for electricity supply. The product portfolio will be expanded from existing industrial products to consumer-end products while improving the bargaining power of purchasing to create synergy effect

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30 THANK YOU!