DJ CN Logistics (2130.HK) Announces 2022 Annual Results: Revenue Increased by 4.3% to HKUSD2,788.0 million
EQS Newswire / 31/03/2023 / 00:51 UTC+8
?For immediate release?
30 March 2023
CN Logistics International Holdings Limited
(Incorporated in the Cayman Islands with limited liability)
(Stock code:2130.HK)
Announces 2022 Annual Results
Revenue Increased by 4.3% to HKUSD2,788.0 million
Net Profit attributable to equity shareholders Increased by 3.9% to HKUSD86.6 million
Proposed Final Dividend of HKUSD0.1, with Payout Ratio Reaching 71.4%
Financial Highlights
HKUSD '000 For the year ended 31
December
2021 2022 Change
Revenue 2,673,424 2,787,972 +4.3%
Gross Profit 502,728 516,845 +2.8%
Profit attributable to equity shareholders of the Company 83,413 86,632 +3.9%
Declared interim dividend per share (HK Cents) 9 13 +44.4%
Proposed final dividend per share 12 10 -16.7%
(HK Cents)
Proposed special dividend per share 9 Nil N/A
(HK Cents)
Dividend payout ratio 91.2% 71.4% -19.8p.p.
(30 March 2023 - Hong Kong) CN Logistics International Holdings Limited ("CN Logistics", and together with its subsidiaries, the "Group;" stock code: 2130) is pleased to announce its audited consolidated results for the year ended 31 December 2022 (the "Year").
Looking at 2022, COVID-19 pandemics continue to affect our lives, especially the emergence of highly transmissible Omicron variant has been driving an unprecedented surge of infections globally at the beginning of the year. Besides, the outbreak of Russian-Ukrainian war and the sharp increase in crude oil prices also impact the global economy and different industries. Despite a challenging macroeconomic environment, the Group successfully maintained stable business growth during 2022.
On one hand, the Group's operations in Hong Kong and the PRC were severely disrupted by the city lockdowns and strict epidemic control measures, hindering the local logistics and transportation, and affecting the Group's service in these regions. On the other hand, despite the ongoing conflicts between Russia and Ukraine, the Group continued to consolidate and expand its business footprint in oversea markets, especially in Italy and through Allport Cruise. The newly acquired Allport Cruise enabled the Group to capture the emerging opportunities in the post-pandemic era, offsetting the negative impacts brought by lockdowns in Asia.
Overall, the Group has recorded a revenue of HKUSD2,788.0 million (2021: HKUSD2,673.4 million), representing a year-on-year growth of 4.3%. Gross profit increased by 2.8% to HKUSD516.8 million (2021: HKUSD502.7 million).
Regional Analysis - Greater China
The Group has always been one of the leaders in the international logistics industry over years, apart from the service capabilities, another critical factor would be the strong development and support from mainland China. In particular, Shanghai, which is our key focus in the PRC, is not only a major commercial and financial centre in Asia, but also a prominent sales market for high-end fashion and luxury goods.
During the first half of 2022, the lockdown in Shanghai affected the exports and imports of goods, and imposed operational risks and challenges to the Group's business operations. Yet, the Group leveraged its extensive network resources across the PRC to set up alternative sites in different regions, helping clients to redistribute their warehouse resources countrywide, reducing the impact on their delivery plans and production line.
During the Year, the revenue contributed by the PRC office dropped by 33.4% to HKUSD643.4 million (2021: HKUSD966.0 million).
At the same time, the Group observed that internationally renowned fashion and luxury brands remained optimistic towards the Chinese market, following the positive stimulus of border reopening. Therefore, to better prepare for the returning demand, the Group expanded its flagship warehouse and bonded warehouse in Shanghai, levelled up the automated facilities during the Year to support its long-standing clients' strategy to capture the upcoming opportunities in the post-pandemic era.
Regional Analysis - Europe
The European subsidiaries achieved faster-than-expected growth during the Year, serving as a safety net for the Group's overall financial performance.
Despite there is negative economic outlook for European countries due to the geopolitical conflict between Russia and Ukraine and high inflation rate, the logistics demand from high-end fashion and luxury customers remained high. Leveraging the Group's long-standing relationship with high-value brand customers and service capabilities in high-end verticals, the Group is well-positioned to withstand the storm and capture the business opportunities in the post-pandemic era.
The Italian regional office has served as the Group's business hub to complete the consolidation of logistics facilities and network capabilities in the region, enhanced customer satisfaction by offering a wider range of logistics services, earned trust and support from customers and expanded the client base. For example, the Group received more orders from luxury brands to ship their raw materials from Asia to Italy and other European countries, showcasing the closer relationships between the Group and its valuable customers.
During the Year, the revenue contributed by the regional office in Italy surged by 26.1% to HKUSD949.6 million (2021: HKUSD753.0 million).
New Market Opportunities - Asia
Apart from the Group's existing core countries of operations, during the Year, the Group was able to seize the emerging opportunities in several regions including Japan and South Korea. Rising demand for high fashion and luxury products in Japan and South Korea has been observed, given the raise of high fashion and luxury goods market among local young consumers. In view of the business potential similar to the Italian market, the Group actively expanded its local presence in both the growing countries and extended the collaborations with several brand customers in them.
During the Year, the revenue contributed by the regional office in Japan and Korea surged by 54.7% to HKUSD115.4 million and surged by 12.8% to HKUSD57.3 million, respectively. (2021: HKUSD74.6 million; HKUSD50.8 million respectively).
Furthermore, following the implementation of the Regional Comprehensive Economic Partnership, the Group is confident in the potential and new opportunities in the region. Thus, the Group began to place resources and put efforts into these regions for business development. On top of the existing office in Malaysia and Thailand, the Group further expanded its footprint in Southeast Asia by establishing a regional office in Vietnam during the year. Leveraging its strategic position in the global supply chain landscape, Vietnam's logistics industry has been rapidly growing with its soaring fast fashion and electronic sectors. The Group successfully acquired several key customers from the furniture industry in Vietnam, demonstrating its efforts in diversifying the customer portfolio. The Group targets to establish new offices in Indonesia and Bangladesh in the year to extend its penetration in Southeast Asia region and grasp the booming business potential.
New Verticals - Cruise Logistics
With the pandemic easing up, the global tourism industry is showing great signs of recovery in which cruise travel has become a major trend in the tourism industry. During the year, the Group tapped into the niche market of cruise logistics through the acquisition of Allport Cruise, expanding its international logistics network as well as diversifying the revenue stream, in response to the significant economic rebound and surging service demand in post-COVID-19 era as projected. This strategic move was a great success and reflected in the financial contribution of Allport Cruise to the Group. While countries relaxed their travel restrictions and supported the cruise industry to drive greater momentum to the tourism industry, cruise lines are optimistic about the market situation and are then actively developing business. As a result, Allport Cruise was awarded more tenders of shipments for drydock project and cruise replenishment. The revenue of Allport Cruise for the Year increased by 43.1% to USUSD43.8 million.
Apart from making a direct contribution to the Group's revenue, Allport Cruise also formed business synergies with existing overseas offices by winning replenishment projects for vessels' port calls, providing a truly one-stop logistics solution to cruise lines. To further develop the cruise business, the Group target to establish its first office in the Netherlands, which has a well-developed economy and an extensive infrastructure network, for catering to the surging service demand from cruise lines in the European market.
eCommerce Business
Riding on the booming opportunities in the eCommerce sector and enabling the existing retail clients with Online-to-Offline (O2O) logistics solutions, the Group continued to expand its footprint in eCommerce logistics including enhancing its two self-developed eCommerce platforms, namely PJF Wines and CNShip4Shop. Since its launch in 2021, PJF Wines experienced rapid month-on-month growth before the lockdown in Shanghai in the first half of 2022. As the pandemic gradually alleviated and the borders were fully reopened, there was a strong rebound in the number of orders in the second half of 2022.
The Group's other eCommerce platform, CNShip4Shop, which aims to gather overseas niche brands and offer one-stop international shipping solutions to customers in 12 Asian regions, received overwhelming support from the market since its launch in early 2022. Despite the previous outbreak of pandemic in PRC having slightly affected its performance, the platform still achieved faster-than-expected growth in Taiwan and other overseas markets, recorded multifold growth in active users.
With the aim to create new revenue stream, the Group will continue to promote the platforms by improving the user experience through system upgrades, launching marketing campaigns, and strengthening the partnerships with wine merchants, overseas wineries and oversea niche brands, helping them to enter China and other Asian regions through online channels with lower set-up costs and tax rates. Executive Director and Chief Executive Officer of CN Logistics, Mr. Ngan Tim Wing said, "As one of the pioneers in global logistics industry, we remain cautiously optimistic towards the year 2023 as the international supply chain gradually recovers to the pre-pandemic level, with various business sectors such as tourism, luxury and high-end fashion and retail are back on a growth trend. In addition, the Regional Comprehensive Economic Partnership is effective and the Belt and Road Initiative comes into place, there is huge potential for economic growth in the Southeast Asia countries as well as their logistics industry. We will accelerate the business development in Southeast Asia region, particularly in Vietnam and Thailand, which enjoy a large and young demographic portfolio with supportive economic incentives. Leveraged our existing business presence in Europe and the United States, we actively explore their potentials and expansion to new markets for commercial opportunities and better service capabilities."
Commenting on the future development of CN Logistics, Mr. Ngan added, "Besides, we will continue to incubate the cruise business and tap into new markets to serve the increasing service demands. The cruise business not only diversifies our service portfolio, but also provides extra business opportunities for our network offices to serve niche and valuable cruise customers. Meanwhile, we will continue to look for strategic partnerships that strengthen our comparative advantages, diversify the operational risk, as well as inject growth momentum into the business. While we are pursuing business expansion and development opportunities, we will continue to monitor all expenses and follow a strict budget to enhance cost-effectiveness and improve profit margins, providing a greater buffer to sail through the potential downturns."
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About CN Logistics International Holdings Limited
Established in 1991, CN Logistics is a well-established international logistics solutions provider with core business of providing air freight forwarding services and distribution and logistics services in relation to fashion products and fine wine, primarily focusing on high-end fashion (including luxury and affordable luxury) products. According to the CIC Report, the Company ranked first in the distribution and logistics market for high-end fashion products in both the PRC and Hong Kong in 2019. For more details, please visit the Company's website: https:// www.cnlogistics.com.hk File: CN Logistics (2130.HK) Announces 2022 Annual Results: Revenue Increased by 4.3% to HKUSD2,788.0 million
31/03/2023 Dissemination of a Financial Press Release, transmitted by EQS News. The issuer is solely responsible for the content of this announcement. Media archive at www.todayir.com
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March 30, 2023 12:51 ET (16:51 GMT)
