Summary of Shanghai Zhenhua Heavy Industries Co., Ltd. Annual Report 2015
Core Content
Shanghai Zhenhua Heavy Industries Co., Ltd. (ZPMC) is a well-known state-owned enterprise in the heavy equipment manufacturing industry, listed on the Shanghai Stock Exchange with both A-shares (600320) and B-shares (900947). The company is under the control of China Communications Construction Group, with China Communications Co., Ltd. as its controlling shareholder. The annual report for 2015 was audited by PrincewaterhouseCoopers Zhong Tian LLP, and the financial reports were declared true, accurate, and complete by the responsible persons.
Key Financial Indicators
Major Accounting Data (2015 vs. 2014 vs. 2013)
| Indicator |
2015 (After adjustment) |
2015 (Before adjustment) |
2014 (After adjustment) |
2014 (Before adjustment) |
2013 (After adjustment) |
2013 (Before adjustment) |
| Operating Income |
23,272,394,677 |
- |
25,477,011,081 |
25,069,421,487 |
23,453,747,413 |
23,201,555,800 |
| Net Profit |
212,411,967 |
- |
202,223,273 |
199,386,986 |
145,905,039 |
139,836,320 |
| Net Cash from Operating Activities |
-1,831,961,473 |
- |
-863,628,925 |
-873,383,052 |
1,064,167,754 |
965,483,749 |
| Net Assets |
14,869,572,883 |
- |
14,990,495,511 |
14,780,603,810 |
14,717,660,245 |
14,510,604,831 |
Major Financial Indicators
| Indicator |
2015 |
2014 |
2013 |
Growth (%) |
| Basic EPS |
0.05 |
0.05 |
0.05 |
0.00 |
| Diluted EPS |
0.05 |
0.05 |
0.05 |
0.00 |
| ROE |
1.41 |
1.36 |
1.36 |
+0.05% |
| Net Profit after non-recurring gains/losses |
-214,409,604 |
-79,581,135 |
-79,581,135 |
Not applicable |
| Net Cash from Operating Activities |
-1,831,961,473 |
-863,628,925 |
1,064,167,754 |
Not applicable |
| Net Cash from Investment Activities |
2,565,598,510 |
-1,856,470,193 |
- |
-238.20% |
| Net Cash from Financing Activities |
-318,811,177 |
1,144,491,991 |
- |
-127.86% |
| R&D Expenses |
717,412,492 |
- |
780,894,035 |
-8.13% |
| Operation Taxes and Surcharges |
24,550,179 |
- |
136,632,500 |
-82.03% |
| Changes in Fair Value Gains/Losses |
-21,225,034 |
- |
-123,542,084 |
-82.82% |
| Gain on Investment |
498,236,958 |
- |
370,922,986 |
+34.32% |
| Operating Profit |
206,687,965 |
- |
121,854,057 |
+69.62% |
| Total Profit |
271,735,564 |
- |
177,791,974 |
+52.84% |
| Income Tax Expense |
77,529,876 |
- |
21,205,926 |
+265.60% |
| Net Profit before Consolidation |
42,357,907 |
- |
8,537,647 |
+396.13% |
| Minority Interest |
-18,206,279 |
- |
-45,637,225 |
-60.11% |
| Net Comprehensive Income |
87,634,986 |
- |
227,188,161 |
-61.43% |
Main Business Overview
By Product
| Product |
Operating Revenue |
Operating Cost |
Gross Margin (%) |
Increase over prior year (%) |
| Container Cranes |
14,994,515,929 |
12,039,998,425 |
19.70 |
+21.96% |
| Heavy Equipment |
3,985,411,881 |
3,950,151,042 |
0.88 |
-20.04% |
| Bulk-Cargo Machinery Parts |
2,013,370,826 |
1,862,388,384 |
7.50 |
-44.03% |
| Construction-Transfer Project |
514,064,790 |
447,701,799 |
12.91 |
-82.18% |
| Steel Structures |
826,175,120 |
796,465,278 |
3.60 |
-21.98% |
| Vessel Shipping and Others |
680,776,778 |
376,525,357 |
44.69 |
+45.70% |
| Total |
23,014,315,324 |
19,473,230,285 |
15.39 |
-8.99% |
By Region
| Region |
Operating Revenue |
Operating Cost |
Gross Margin (%) |
Increase over prior year (%) |
| Mainland, China |
8,270,356,698 |
6,727,867,350 |
18.65 |
-14.44% |
| Asia (Excluding Mainland) |
5,854,518,426 |
4,778,826,831 |
18.37 |
-20.86% |
| America |
4,555,300,460 |
4,118,589,876 |
9.59 |
+33.45% |
| Europe |
2,264,289,477 |
2,203,795,267 |
2.67 |
-5.62% |
| Total |
23,014,315,324 |
19,473,230,285 |
15.39 |
-8.99% |
Key Financial Highlights
- Operating Income: Decreased by 8.65% to 23.27 billion RMB in 2015.
- Net Profit: Increased by 5.04% to 212 million RMB.
- Net Cash from Operating Activities: Negative, indicating cash outflows.
- Net Cash from Investment Activities: Positive, mainly due to financial product maturity.
- Net Cash from Financing Activities: Negative, due to increased loan repayments.
- R&D Expenses: Decreased by 8.13% to 717 million RMB.
- Operating Profit: Increased by 69.62% to 206 million RMB.
- Total Profit: Increased by 52.84% to 271 million RMB.
- Income Tax Expense: Increased by 265.60% to 77 million RMB.
- Net Profit before Consolidation: Increased by 396.13% to 42 million RMB.
- Minority Interest: Decreased by 60.11% to -18 million RMB.
- Net Comprehensive Income: Decreased by 61.43% to 87 million RMB.
Key Business Developments
- The company maintained its leadership in the global container crane market.
- It expanded into offshore heavy equipment and large steel structures.
- The company actively engaged in the automation of ports and international shipment.
- It made strategic acquisitions, including CCCC Tianhe, which was accounted for under the same control.
- The company's R&D efforts led to recognition in the national science and technology field.
Risk Factors
- The company has described risks in detail in the annual report.
- Investors are advised to refer to the related chapters in the directors' report for a comprehensive understanding of the risks involved.
Conclusion
The annual report for 2015 provides a detailed overview of ZPMC's financial performance and business operations. Despite a decrease in operating income, the company managed to increase net profit and operating profit, driven by strategic initiatives and the performance of its subsidiaries. The report highlights the company's focus on innovation, market expansion, and international business, while also addressing the challenges posed by the global economic environment.
