- Continued Expansion of Core Businesses
- Globalization Strategy is Gradually Being Implemented
China Risun Group Limited (China Risun, or the Group, HKG: 1907), a leading global integrated coke, coking chemicals and refined chemicals producer and supplier and relevant operation management services provider in China, has announced its annual results for the year ended 31 December 2021 (the reporting year). Profit attributable to owners up 58.1% to RMB2.61 billion, achieving a 3-year consecutive growth since its listing in 2019.
Revenue for the year ended 31 December 2021 was RMB38.4 billion, representing an increase of 94.2% year-on-year. The gross profit margin was 14.4% and the net profit margin was 6.8%. Basic earnings per share of the Group was RMB61 cents, representing an increase of approximately 52.5% as compared to the figure in 2020. To share the fruit of its outstanding results performance, the Board determined to declare an annual final dividend of RMB6.3 cents per share (equivalent to HK7.7 cents per share), representing no less than 30% of the net profit of the Group.
On 7 March, the Group officially switched from a small-cap stock in the Hang Seng Index to a mid-cap stock, and has been included in a number of sub-indexes such as the Hang Seng Large-Mid Cap (Investable) Index and the Shanghai-Hong Kong Stock Connect.
Continued expansion of core businesses in coke and refined chemicals industry
Globalization strategy is gradually being implemented
In 2021, the price of coke reached a record high in China, and the profitability of the industry continued to improve. As the core profit source of China Risun, the coke business performed very well. With its national market layout, advantage from large-scale operations and advanced coal blending technology, economies of scale continued to emerge. In 2021, the Group’s coke business volume reached 11.5 million tons. The total number of production bases increased to eight, and its core business continued to improve.
During the reporting year, the Group continued to expand its market share and gradually implemented its business globalization strategy. The Group’s joint venture in Hohhot, Inner Mongolia, is expanding its coke production facilities and is expected to complete in different phases and eventually, approximately 3 million tons of coke will commence in operation. Starting from 2021, the Group actively explored opportunities in different places of Asia, for example, Sulawesi province, Indonesia. This project is the first overseas coking project held by China Risun. The Group has also participated in two coking projects with an annual output of 4.7 million tons and 3.9 million tons, respectively, in the region. Other than Japan, the Group was considering setting up subsidiaries for the trading of raw materials of the coke and refined chemicals industry in Singapore and Indonesia, reflecting the progress its business globalization strategy has made.
China Risun has also been expanding its business through methods such as operations management. During the reporting year, China Risun completed the acquisition of two companies and have four operations management companies, expanding the development space and brand influence of its operations management segment, and further consolidating its leading position in the coke and refined chemicals industry.
Chemical business steadily expanding
Expansion of high value-added products extending industrial chain
The refined chemicals segment is another major growth path for China Risun. With the recovery of the global economy and financial easing, chemical products have shaken off the impact of pandemic, and the prices of most products have returned to pre-pandemic levels, which has significantly improved the profitability of the refined chemicals segment. Revenue of this segment is up 115.2% to RMB12.6 billion.
China Risun has continued to enlarge the capacity of its refined chemicals production facilities. In addition to the 300,000-ton/year styrene production line that was put into operation at the end of 2020, its two-phase caprolactam expansion project is also progressing steadily. In August 2021, the capacity expansion project at the Group’s Dongming production base, which comprised capacity expansion, quality improvement and consumption reduction, was successfully completed, expanding the caprolactam capacity from 200,000 tons to 300,000 tons a year, and increasing the Group’s existing caprolactam production capacity to 450,000 tons/year. In addition, the second phase of the 300,000 tons/year caprolactam project in the Group’s Cangzhou production base is under construction and is expected to commence production in mid-2022. By then, the Group’s caprolactam production capacity will reach 750,000 tons a year, which is expected to be the leading player in China.
Actively deployed new energy business to become a clean and low-carbon energy supplier
As a global leader in coke production, the Group commenced its entry into the hydrogen energy field in 2020, capitalizing on its advantages from the industrial chain of coke-oven-gas-based hydrogen. Entering 2021, the Group has further developed its hydrogen energy business by actively participating in the hydrogen industrialization plan in Hebei Dingzhou, Inner Mongolia Hohhot and Hebei Xingtai, China. Focusing on the rapid development of the hydrogen energy industry in Beijing-TianjinHebei area, the Group is committed to developing from production, storage, transportation, hydrogenation to usage together with the radiation of intelligent supply of hydrogen to the whole country with advanced technology and more customer-oriented services. In addition, with the popularity of fuel cell vehicles and the wide application of hydrogen energy in the industrial sector, the Group is expected to become a highly competitive hydrogen energy supplier in Northern China with its advantages in low-cost hydrogen production.
Looking forward, the Group will make use of different ways of operation management, merger and acquisition together with the setup of joint ventures with well-known geographical large enterprises to increase its market share by production/processing of coke and refined chemicals. The Group will also try to seize opportunities from the explosive growth of hydrogen energy against the backdrop of carbon peaking and carbon neutrality. It is expected to greatly promote the green and low-carbon development of the industry and contribute to the implementation of the national “3060” dual-carbon target strategy. The development plan of the Group’s hydrogen energy business has undoubtedly become a model for the transformation and upgrading of the traditional coking industry into a clean energy enterprise and has also made positive contributions to the Group’s high-quality development.
About China Risun Group Limited
China Risun Group Limited is the world’s largest independent producer and supplier of coke by volume in 2021, 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 27 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 in various index series, including the Hang Seng Composite Index, Hang Seng Composite Industry Index – Materials, Hang Seng Composite MidCap Index, Hang Seng Stock Connect Hong Kong Index, Hang Seng Stock Connect Hong Kong MidCap & SmallCap Index, Hang Seng SCHK Mainland China Companies Index, Hang Seng SCHK ex-AH Companies Index, Hang Seng Stock Connect Hong Kong Composite Index, Hang Seng Large-Mid Cap (Investable) Index, Hang Seng Large-Mid Cap Low Volatility Comprehensive Index, Hang Seng Large-Mid Cap Quality Comprehensive Index, Hang Seng Large-Mid Cap Low Size Comprehensive Index, Hang Seng Large-Mid Cap Dividend Yield Comprehensive Index, Hang Seng Large-Mid Cap Momentum Comprehensive Index, Hang Seng Large-Mid Cap Value Comprehensive Index, Hang Seng Large-Mid Cap Equal Weighted Factor Mix (QVLM) Index and Hang Seng Large-Mid Cap Risk Parity Factor Mix (QVLM) Index. China Risun is also included in FTSE GEIS: FTSE Global Small Cap Index, FTSE Global All-Cap Index (LMS) and FTSE Global Total-Cap Index (LMSu).
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