Tat Hong Equipment Service Co., Ltd. Announces First Annual Results after Listing

Jun 28, 2021 09:00 JST

Source: Tat Hong Equipment Service Co., Ltd

Net Profit Rose by 32% to RMB101.2 million in FY2021

HONG KONG, Jun 28, 2021 - (ACN Newswire) - Tat Hong Equipment Service Co., Ltd. ("Tat Hong" or the "Company", together with its subsidiaries, the "Group") (Stock Code: 2153), the first foreign-owned tower crane service provider established in the PRC, has announced its annual results for the year ended 31 March 2021 ("FY2021" or the "Year").

Results Highlights:
-- Total revenue increased by 6.4% to RMB793.0 million
-- Gross profit margin improved to 34.5%
-- Net profit rose by 32% to RMB101.2 million with net profit margin increased to 12.8%
-- EBITDA increased 4.6% to RMB394.7 million attaining EBITDA margin of 49.8%
-- Recommended a final dividend of HK3 cents per share
-- High earnings visibility: outstanding contracts value amounted to RMB751.5 million
- Work in progress: 258 projects with contract value of RMB587.2 million;
- On hand but not yet commenced: 60 projects with expected contract value of RMB164.3 million

In FY2021, the Group recorded revenue amounting to RMB793.0 million, representing a 6.4% increase from that for the year ended 31 March 2020, mainly attributable to the increase in the number of both self-owned and rented tower cranes, the majority of which had been working on-site and generating revenue. The Group's average annual total Tonne Metres in use increased from approximately 2,284,596 in FY2020 to 2,491,629 in FY2021.

Gross profit increased by approximately 7.9% to approximately RMB273.3 million, with improved gross profit margin of 34.5%. Profit for the year increased from approximately RMB76.5 million for the year ended 31 March 2020 to approximately RMB101.2 million for the year ended 31 March 2021, representing an increase of approximately 32.4%. To share the positive results of the Group with shareholders after listing, the Board of Directors recommended the payment of a final dividend of HK3 cents per share.

As at 31 March 2021, the Group had 258 projects in progress with a total outstanding contract value of approximately RMB587.2 million and 60 projects on hand with a total expected contract value of approximately RMB164.3 million. Of these projects, the Group expects to complete contract work of approximately RMB578.9 million by the year ending 31 March 2022, demonstrating high and solid earnings visibility in the forthcoming year.

Mr. Sean Yau, CEO of Tat Hong Equipment Service Co., Ltd. said, "FY2021 marks a fruitful year for Tat Hong as we have reached a major milestone with a successful listing on the Stock Exchange of Hong Kong and delivered promising results. Despite the outbreak of COVID-19 becoming pandemic in March 2020, inevitably affecting some business operations during the year, we are delighted to have delivered satisfactory results attributable to our leading position and track record in tower crane service industry in the PRC as well as our strong relationship with Chinese Special-tier and Tier-1 EPC contractors. We stay committed to providing one-stop tower crane solution services from consultation, technical design, commissioning, construction to after-sales services primarily to our customers and seize numerous business opportunities arising from strong asset investment and urbanisation in the country."

Business Review

As at 31 March 2021, the Group managed 1090 tower cranes, which are all equipped to flexibly engage in our customers' specialised range of EPC projects throughout the PRC.

As a well-recognised foreign-owned tower crane service provider in the PRC, the Group has also built a strong reputation in our awareness to workers' safety, service quality and technical strength. The Group possesses Class A Certificate for Erection, Modification and Maintenance of Special Type Equipment granted by the Jiangsu Quality and Technology Supervisory Bureau and Construction Enterprise Qualification Certificate and grade of Class One Lifting Equipment Erection and Project Outsourcing issued by the Jiangsu Housing and Urban Rural Construction Department for conducting tower crane service business in the PRC. In FY2021, the Group has been granted 10 additional registered patents, bringing total registered patents to 44 for utility models and inventions and designs relating to tower cranes, with 23 patent filings in progress.

During the Year, revenue from Commercial Projects, primarily referring to the EPC projects for commercial buildings, industrial parks and shopping malls, grew 22.3% to RMB403.4 million, accounted for 50.9% of the Group's total revenue. On the other hand, Infrastructure Projects, mainly referring to the EPC projects for airports, railway stations and bridges and Residential Projects, referring to the EPC projects for residential properties and affordable housing, contributed revenue of RMB130.5 million and RMB200.9 million respectively, accounting for 16.5% and 25.3% of the Group's total revenue. Energy Projects, referring to the EPC projects for hydropower stations, nuclear power plants and LNG terminals, are seen to be one of the growth drivers of the Group's business. Revenue from this segment increased by 50.5% to RMB58.1million, accounted for 7.3% of the Group's total revenue.

Outlook

Along with the foreseeable stable growth of the construction industry, continuous urbanisation process and massive government promotion of prefabricated buildings, the tower crane service market in the PRC is anticipated to grow further in the following years.

In order to capture future growth opportunities, the Group plans to continue to focus on fleet expansion on medium-to-large sized tower cranes and maintain a mix fleet of self-owned and rented tower cranes to enhance the utilisation of its tower cranes. The Group is also expanding its Yangzhou Refurbishment Centre with an aim to extend the scope of services to its customers as well as industrial peers, so as to maintain and strengthen the strong-ties with its long-term and reputable customers. Looking ahead, the Group also targets to gradually expand its market presence in Indonesia under China's Belt and Road Initiative and expand its business operations through investment.

Mr. Roland Ng, Chairman of Tat Hong Equipment Service Co., Ltd. concluded, "With the successful listing of Tat Hong in January this year, followed by many accomplishments thereafter, we are set to seize numerous business opportunities in the PRC as well as in the region with our enhanced capital foundation. Leveraging our leading market position, nationwide business coverage, stable and solid customer base and large-scale tower crane fleet, we are confident to deliver satisfactory performance in the forthcoming year. We are optimistic on the long-term development prospects of the Group particularly in infrastructure and energy sectors, and we look forward to continuing to deliver sustainable growth and results for our shareholders, investors and business partners".

About Tat Hong Equipment Service Co., Ltd. (Stock Code: 2153)
Tat Hong Equipment Service Co., Ltd. is the first foreign-owned tower crane service provider established in the PRC. Since 2007, the Group has established as a tower crane service provider for one-stop tower crane solution services from consultation, technical design, commissioning, construction to after-sales services primarily to Chinese Special-tier and Tier-1 EPC contractors. Guided by its core values, "Virtue, Safety and Excellence", the Group has successfully established its market position and maintained stable, reputable and loyal customer base in the construction industry in the PRC.

Media Enquiries
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Source: Tat Hong Equipment Service Co., Ltd
Sectors: Daily Finance, Construct, Engineering