Operating Results Stabilised and Showed Improvement
Gradually Realising Transformation and Upgrading
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 interim results for the six months ended 30 June 2022 (the Period). During the Period, the international environment became more complex and severe, while the global epidemic remained severe. However, thanks to the growth of the terminal logistic business, the Group’s results during the Period remained promising.
In the first half of 2022, the continuous impact of the repeated COVID-19 epidemic and the sharp increase in oil prices led to significant pressure on the Group’s business operation. The fifth wave of the epidemic, which broke out in Hong Kong at the beginning of the year, had a certain impact on the local ferry and water cultural tourism businesses. The cross-border passenger transportation business operations of the Group were still in a trough due to the epidemic prevention policies. Nonetheless, in the face of the challenges in the external environment, the Group accelerated its business transformation and upgrading, endeavoured to create new drivers for growth and efficiency, and continued to optimise its operation and control model. Subsequently, most of the terminal logistic business was stabilised and showed improvement through active development. During the Period, the Group recorded consolidated revenue of HK$1,601.2 million (1H 2021: HK$1,142.7 million) , representing an increase of 40.1% over the same period last year. Profit for the Period amounted to HK$61.7 million (1H 2021: HK$39.7 million), representing an increase of 55.4% over the same period last year. Profit attributable to the equity holders of the Company amounted to HK$54.9 million (1H 2021: HK$26.1 million), representing an increase of 110.6% over the same period last year.
Precisely Grasping Market Opportunities and Continue to Build New Advantages in the Port Logistics Business
Regarding the freight business, leveraging its advantages of the terminal’s network, the Group seized the opportunity to assist Hong Kong’s anti-epidemic livelihood supplies transportation project and continued to provide new impetus to local businesses. It focused on improving the layout of the industrial chain and vigorously developed the terminal logistic business market while carrying out epidemic prevention and control.
During the Period, the break bulk cargoes transportation volume recorded 342,000 tons, representing a year-on-year increase of 4.9%. Under the influence of the epidemic, several domestic cities were locked down and the supply of container space and containers was insufficient, the container transportation volume was recorded 644,000 TEU. As for the cargo handling business, the container handling volume recorded 571,000 TEU, representing a year-on-year increase of 0.2%. The break bulk cargoes handling volume recorded 4,036,000 tons, representing a year-on-year increase of 6.6%, and the volume of container hauling and trucking recorded 98,000 TEU.
During the Period, the Group fully utilised its business advantage as a combination of “transit and port” in the Guangdong-Hong Kong-Macao Greater Bay Area; Chu Kong Transhipment & Logistics Co., Ltd. (CKTL), in conjunction with Qingyuan Port, Doumen Port, Zhongshan Port, Zhongshan Huangpu Port, Gaoming Port, Beicun Port, Sanbu Port and many other freight ports, has been successfully opening “Green Passages” and “Synergised Passages” to secure a full logistics chain, in order to realise a smooth integration of consignment consolidation, customs clearance, as well as consignment loading and unloading, which in turn has efficiently supplied medical materials and other resources for anti-epidemic measures, quarantine measures, as well as for daily necessity such as fresh food and grocery items. Being faced with the precarious situation of the fifth-wave epidemic in Hong Kong, the Group has also earnestly fulfilled its corporate social responsibility by making an outstanding contribution to the anti-epidemic work in Hong Kong, which has received extensive coverage by many mainstream media news.
Driven by the transportation business of anti-epidemic materials for Hong Kong during the Period, CKTL, Zhongshan Huangpu Port, Doumen Port and Qingyuan Port have significantly improved their operating efficiency. The new warehouse in Tuen Mun was successfully put into operation, and the integrated logistics business has developed rapidly. CKTL and a courier company have jointly operated the warehouse for Regulated Air Cargo Screening Facilities Scheme in Tuen Mun Godown Wharf, which has further enhanced the Group’s air freight business volume. CKTL has vigorously developed the business of local construction logistics in Hong Kong, transformed and upgraded the traditional container berth in Yau Ma Tei and built it into a professional engineering logistics loading, unloading and distribution base. The Group has successfully facilitated the logistic project of the inner wall bent plate of the tunnel for the Central Kowloon Route, as well as the logistic project of the transitional housing scheme in Kong Ha Wai Village, concentrating on securing the logistics for the Hong Kong Mobile Cabin Hospital and other construction projects supported by the central government concerning the anti-epidemic measures in Hong Kong. Gaoming Port has taken lead to develop a cross-border e-commerce business and started a trans-customs transportation business between Foshan Gaoming district and Guangzhou Baiyun International Airport; the express parcel processing facility in Gaoming Port has also successfully launched its cross-border e-commerce direct delivery business. Civet Port has seized the opportunity to successfully develop the operating business of the centralised Zhuhai cross-border freight transfer station, as well as the operating business of the Guangdong-Hong Kong-Macao Logistics Park cross-border freight transfer station. Doumen Port has continued to promote business diversification whilst continuing to develop a comprehensive logistics business and has successfully developed bulk building materials businesses such as remote loading of bridge components for Hong Kong and Macao, and berthing and loading of cement ships for Hong Kong. Doumen Port has also coordinated the existing warehouse resources, completed the qualification examination and acceptance process of supervised designated sites for imported fruits, and prepared to develop business for imported fruits.
Steadily Promoting Airport Strategy and Actively Cultivating New Businesses in Passenger Transportation Segment
Regarding the passenger transportation business, the Group actively cultivates new businesses surrounding Hong Kong International Airport, and achieved another key breakthrough in its airport strategy. Hong Kong International Airport Ferry Terminal Services Limited, a member of the Group, has won the project of passenger and baggage service in the transit terminal of Hong Kong International Airport, which has, in turn, expanded the Group’s cross-border airport passenger service from “sea-air transport” to “sea-land-air transport”. The businesses previously developed by Chu Kong Passenger Transport Co., Ltd. related to Hong Kong International Airport have maintained normal operation under the impact of the epidemic, among which, the car-sharing business on the apron of Hong Kong International Airport has maintained steady growth.
In the second half of the year, the COVID-19 epidemic will continue to exert pressure on the Group’s cross-border passenger transportation and its related auxiliary businesses. The Group will actively integrate into the national and regional development landscape, optimise the strategic layout as a breakthrough, accelerate the construction of new development pattern, and plan the strategic layout in the operating segments such as cargo transportation, cargo handling and storage, passenger transportation business, fuel supply, etc. The Group will persistently accelerate its business transformation, upgrade and innovation by broadening its vision of operation and development, adjusting the layout of industrial structure, and integrating advantageous resources to break through development bottlenecks as well as to form development synergies.
Firstly, the Group will make every effort to transform and upgrade its logistics business. The Group will actively capture the opportunities in the Hong Kong infrastructure market, and fully utilise the professional engineering logistics loading, unloading and distribution base operated by the Group in Hong Kong, in order to further develop our engineering materials logistics business; the Group will leverage the geographic advantage of the Tuen Mun Godown Wharf to focus on developing the e-commerce logistics, air cargo logistics and duty-free warehousing businesses; the Group will focus on nurturing the e-commerce logistics business at Gaoming Port, improve the capacity of the supporting logistics service, and build a quality cross-border e-commerce custom clearance centre in the Greater Bay Area; the Group will also strengthen the development of the business in Civet Port’s centralised cross-border trucking terminal, and promote maintenance and upgrade for its quays and berths to enhance cargo handling capacity.
Secondly, the Group will continue to develop new advantages in the passenger transport business. The Group will promote operation integration of its cross-border passenger business, focus on developing potential routes and cancelling routes that have become less competitive in an orderly manner; the Group will continue to actively participate in bidding for strategic and quality projects of Hong Kong International Airport, and strive to become an integrated service provider for Hong Kong International Airport; the Group will enhance the management quality and service capability of its local ferry business, and strengthen the local transportation and public industry in Hong Kong; the Group will prepare to launch the passenger route between Guangzhou Huangpu and urban Hong Kong, as well as the routes between Guangzhou Pazhou, Shunde and Hong Kong International Airport, and actively prepare for the resumption of cross-border passenger routes.
Thirdly, the Group will actively develop the water cultural tourism industry. The Group will focus on the project of the “Oriental Pearl” Victoria Harbour tour and will promote the brand building and raise awareness of “Oriental Pearl” to create a platform for water cultural tourism and commercial events in Hong Kong. In the second half of the year, “Oriental Pearl” will realise berth-and-operate in Central Ferry Pier No.8, strengthen exploration of the market potential in urban Hong Kong Island, strengthen the promotion of both online and offline agents, and actively plan for festival-theme events as well as commercial boat charter events.
Fourthly, the Group will fully explore the potential of the fuel supply business. The Group will take advantage of Hong Kong scarce local refueling buoy facilities, strengthen cooperation with oil companies, and actively bid for over-the-water fuel supply projects in Hong Kong.
Fifthly, the Group will accelerate the implementation of investment projects in countries along the “Belt and Road” initiatives. The Group will accelerate the establishment of logistics business outlets in the ASEAN region, acquisition of investment projects with synergistic value, establish overseas bases, and actively develop markets along the “Belt and Road” initiatives.
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 Macau which is based in Hong Kong and covered the Pearl River Delta (PRD) and Macau including more than 10 cities such as Guangzhou, Shenzhen, Shunde, Zhongshan, Zhuhai, Dongguan, Jiangmen, Macau and so on. Since the acquisition of Sun Ferry Services Company Limited in May 2020, CKSG has entered the local ferry market in Hong Kong, providing services on five main inner harbour and outlying island ferry routes. 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 more than 20 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/