SOURCE: Huazhong In-Vehicle Holdings Company Limited

Huazhong In-Vehicle Holdings Company Limited

March 31, 2017 00:30 ET

Huazhong In-Vehicle Announces 2016 Annual Results

Profit Attributable to the Owners of the Parent Increased 51%

HONG KONG, CHINA--(Marketwired - Mar 31, 2017) - Huazhong In-Vehicle Holdings Company Limited ("Huazhong In-Vehicle" or the "Company") (HKSE: 6830)

Financial Highlights
For the year ended 31
December
  2016
RMB
  2015
RMB
  Change
Revenue   1,740,000,000   1,640,000,000   +6.3%
Gross profit margin   27.5%   24.2%   +3.3%
Profit attributable to owners of
the parent
  104,900,000   69,400,000   +51.2%
Basic earnings per share   0.0654   0.0433   +51%

Huazhong In-Vehicle Holdings Company Limited ("Huazhong In-Vehicle" or the "Company") (HKSE: 6830) and its subsidiaries (collectively, the "Group") announced its audited consolidated financial results for the year ended 31 December 2016.

For the Year, the Group's revenue was approximately RMB1.74 billion, representing an increase of approximately 6.3% as compared to approximately RMB1.64 billion in 2015. Profit attributable to the owners of the parent for the Year was approximately RMB104.9 million, representing an increase of approximately 51.2% as compared to approximately RMB69.4 million in 2015. The satisfactory results achieved were mainly attributable to booming automotive sales market, new car models launched, vigorous implementation of stringent cost controls and the increase in share of profit from the joint ventures.

Mr. Zhou Minfeng, Chairman of Huazhong In-Vehicle Holdings Company Limited, said, "The automobile industry has recorded another year of stable growth in 2016. In terms of sales and manufacturing volumes, China has again ranked number one in the world. During the reporting period, Huazhong In-Vehicle rigorously responded to continuously increasing production costs. We strive for excellence, capture growing market trend, fortify the long-term cooperation with customers, develop new market opportunities, consolidate the Group's resources and improve market competitiveness. These actions successfully helped the Group in achieving encouraging results."

Business Performance
For the Year, the total revenue generated from automotive interior and exterior structural and decorative parts was approximately RMB1,233,256,000 (2015: RMB1,179,085,000), accounting for 70.9% of the Group's total revenue for the Year (2015: 72.1%). The increase was primarily because of the expansion of new markets and new customers during the Year. Gross profit margin increased from approximately 28.4% in 2015 to approximately 30.6% in 2016, primarily due to improved operating efficiency and implementation of stringent cost control. Revenue from moulds and tooling was approximately RMB180,763,000 (2015: RMB136,920,000), accounting for approximately 10.4% of the Group's total revenue for the Year (2015: 8.4%). A gross profit margin of approximately 21.5% was recorded in the Year mainly due to reducing high cost outsourcing processes during the Year. Revenue from casings and liquid tanks of air conditioners and heaters was approximately RMB185,425,000 (2015: RMB191,007,000), accounting for approximately 10.7% of the Group's total revenue for the Year (2015: 11.7%). Gross profit margin increased from approximately 19.3% in 2015 to approximately 23.4% in the Year.

The Group provides one-stop product development and manufacturing solutions to customers. This vertically integrated service has enabled the Group to improve production efficiency, shorten the roll-out time for new products, stringently control production cost and quality throughout the whole production process. With strong R&D capability, advanced technologies and production equipment, stringent quality monitoring and deep knowledge and understanding of the industry, the Group has capacity to develop new products with customers simultaneously. The Group established production bases that are located close to the production bases of most of the key automakers in China. The geographic proximity advantage enables the Group to provide services to its customers in a timely manner, strengthen its relationships with these customers and reduce transportation costs, and thereby further enhancing its competitiveness.

As a tier-one supplier with scalable production capacity and strong research and development ("R&D") capability, the Group has established business relationships with six out of the top 10 automobile manufacturers in China, namely SAIC Motor, FAW Volkswagen, Chang'an Automobile, BAIC Motor, GAC Group and Chery. The solid partnership with industry leaders has provided a strong foothold for the Group to capture the growth of the automobile industry.

Prospect
Going forward into 2017, China's general macro-economic conditions and the operating environment will continue to remain challenging. However, it is expected that the automotive market is able to maintain its stable growth momentum.

The Group proactively formulates a prospective development strategy, taking the lead to expand into the field of automotive lightweight products. With years of experience in the automotive parts industry, we believe that the approach of "replacing steel with plastics" will continue to be developed in the industry. In addition, the Group was able to improve operating efficiency and resulted in improved margin. In order to stay competitive, the Group will continue to control costs and improve efficiency. The Group will continue to implement its development strategy of "committing to product research and development and engineering and implementing strategic investments," and become a leading automobile body parts manufacturer in China in terms of reputation and market share.

Chairman Mr. Zhou Minfeng concluded, "Going forward, we will work closely with our clients and develop products which meet our clients' needs by leveraging our unique strengths, in order to expand our market share, broaden our source of income, and maximize shareholder value, whilst adhering to the highest standards of corporate governance."

About Huazhong In-Vehicle Holdings Company Limited
Huazhong In-Vehicle Holdings Company Limited is one of the leading auto body parts manufacturers in China, specialized in auto body parts, automotive electronics technology, energy saving, etc.. The Group has established a broad client base which includes major Chinese automakers, the Chinese joint ventures of internationally renowned brands and overseas clients such as FAW-Volkswagen, SAIC-GM, Changan Ford, Beijing Benz, Chery Jaguar Land Rover, etc., and has built long term relationships with these clients. Huazhong In-Vehicle offers a one-stop solution to its customers, from the design and manufacture of moulds and tooling for mass production of specific products to the development and manufacture of new products which meet its customers' functional requirements and specifications. Huazhong In-Vehicle's products include internal and external structural and decorative parts (such as front/rear bumper, front-end carrier, dashboard, ABCD-pillars, air inlet grille and rocker panel), air conditioning unit casings, liquid tanks, headliners for automobiles, top cowl covers for engines of motorboats and office chair parts.

For further information, please visit the Company's website at: www.cn-huazhong.com.

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