Stock Code: 600057 Stock Abbreviation: Xiamen Xiangyu
Record of Investor Relations Activities for Xiamen Xiangyu Co., Ltd.
Investor
□Specific Target Research Analyst Meeting □Media Interview
Relations
□Performance Briefing □Press Conference □Roadshow Event
Activity
□On-site Visit □Other
Categories
Time 20:30-21:30 on Friday, April 28th, 2023
11th floor, Building B, Xiangyu Group Tower, No. 85 Xiangyu Road,
Location Xiamen Area, China (Fujian) Pilot Free Trade Zone, Huli District,
Xiamen City, Fujian Province
Mode Telephone Conference
Mr. Cheng Yiliang, a Member of the Company's Party Committee and
Reception Deputy General Manager
Staff Ms. Lin Jing, Director of the Finance Center
Mr. Liao Jie, Secretary of the Board of Directors
The analyst conference was attended by a total of 85 representatives
from 66 institutions. Details of the institutions are as follows:
1. Securities Firms (25 firms participated)
Changjiang Securities Co., Ltd., Huachuang Securities Co., Ltd., Haitong
Personnel
Securities Co., Ltd., Industrial Securities Co.,Ltd., Soochow Securities
Involved in
Co.,Ltd., UBS Securities Co. Limited, Zheshang Securities Co., Ltd.,
Participating
Southwest Securities Co.,Ltd., Sinolink Securities Co., Ltd., Shenwan
in Investor
Hongyuan Securities Co., Ltd., Capital Securities Corporation Limited,
Relations
Tianfeng Securities Co.,Ltd., Huafu Securities Co., Ltd., Shanghai
Activities
Securities Co., Ltd., BOC International (China) Co., Ltd., Essence
Securities Co., Ltd., Ping An Securities Co., Ltd., Guotai Junan Securities
Co., Ltd., Western Securities Co., Ltd., Deppon Securities Co., Ltd.,
Orient Securities Company Limited, Northeast Securities Co., Ltd.,
Sealand Securities Co., Ltd., Guodu Securities Co., Ltd., Everbright
Securities Company Limited
2. Foreign Institutions（4 firms participated）
ICBC International Holdings Limited, KGI Securities (Asia) Limited,
Valliance Asset Management Limited, HD Capital Limited
3. Public Offering of Fund（10 firms participated）
Harvest Fund Management Co., Ltd., Southern Asset Management Co.,
Ltd., AEGON-INDUSTRIAL Fund Management Co., Ltd., Bosera Asset
Management Co., Ltd., ICBC Credit Suisse Asset Management Co., Ltd.,
Morgan Stanley Huaxin Fund Management Company Limited, Harfor
Fund Management Co., Ltd., Fortune&Royal Asset Management Co.,
Ltd., Gowin Asset Management Co., Ltd., Changxin Asset Management
Co., Ltd.
4. Privately Offered Fund（15 firms participated）
Shanghai Senjin Investment Management Co., Ltd., Shanghai Loyalty
Asset Management Co., Ltd., Shanghai Junhe Licheng Investment
Management Center (Limited Partnership), Shanghai Leaderway
Investment Management Co., Ltd., Shanghai Fangwu Private Equity
Fund Management Co., Ltd., The Maple Asset Management Co., Ltd..
Ningbo Shitong Yuntai Private Equity Fund Management Co., Ltd.,
Hongyun Private Equity Fund Management (Hainan) Co., Ltd., Fuzhou
Open Economic Zone Sanxin Asset Management Co., Ltd., Zhejiang
Baoji Equity Investment Management Co., Ltd., Suzhou Longyuan
Investment Management Co., Ltd., Suzhou Ruiyi Jiurun Venture Capital
Partnership (Limited Partnership), GM Investment Management
Co.,Ltd., Yuze (Wuhan) Private Equity Fund Co., Ltd., Guangzhou
Ruirong Private Equity Fund Management Co., Ltd.
5. Insurance Asset Management Company（2 firms participated）
Ping An Insurance (Group) Company of China, Ltd., China Life
Insurance Company Limited
6. Trust Company（2 firms participated）
AVIC Trust Co., Ltd., Huaneng Guicheng Trust Corporation Limited
7. Securities Asset Management（4 firms participated）
Everbright Securities Asset Management Co., Ltd., Zheshang Securities
Asset Management Co., Ltd., Orient Securities Asset Management Co.,
Ltd., CICC Asset Management
8.Other（4 firms participated）
Xiamen ITG Group Corp.,Ltd., Lionhead Technology Development Co.,
Ltd., Beijing Hyperchain Technology Co. Ltd., CHAIRFRM COMMITTEE
I. Ms. Lin Jing delivered a comprehensive presentation on the
financial indicators and main business operations of the Company for
the fiscal year 2022 and Q1 2023.
1. 2022 Primary Business Operations Overview
(1) Key Accounting Data and Financial Indicators
Investor
Relations In 2022, the Company maintained stable growth in revenue and net
Activities' profit, exhibiting a trend where net profit growth rate remained higher
Main than revenue growth rate, and demonstrating robust improvement in
Content operational efficiency.
During the reporting period, the Company achieved a revenue of CNY
538.1 billion, representing a YoY increase of 16.35%; net profit of CNY
3.778 billion, representing a YoY increase of 37.18%; net profit
attributable to the parent company of CNY 2.637 billion, representing
a YoY increase of 20.18%; earnings per share of CNY 1.1, representing
a YoY increase of CNY 0.17; return on equity of 18.06%, representing a
YoY increase of 0.92 pct; net profit margin of 7‰, representing a YoY
increase of 0.1 pct; operating cash flow amounted to a net inflow of
CNY 6.2 billion, representing a YoY increase of CNY 800 million. The
turnover days of the three main assets (accounts receivable, inventory,
and prepaid accounts) were 53.71 days, marking a YoY increase of 3.58
days. Despite being affected by issues such as logistics disruption and
slowdowns in production among some manufacturing enterprises, the
turnover speed of the three main assets slowed down in the first half
of the year, but showed a significant improvement in the second half
of the year.
(2) Primary Business Data
① The Company has signed a comprehensive agreement with
customers, providing them with supply chain integrated services
including procurement and distribution, logistics, supply chain finance,
information consulting, and processing, all of which are based on the
trading practices of bulk commodities. The service revenue and profits
are reflected in the operating results of the core commodities. During
the reporting period, the Company achieved a cumulative operating
volume of nearly 200 million tons of core commodities, an increase of
6.31 million tons YoY, with total operating income reaching CNY 520.7
billion. Considering the overall impact of futures hedging, the
comprehensive gross profit margin of the Company increased by 0.01
pct to 1.73%.
The metallic mineral sector achieved operating income of CNY 349.1
billion, an increase of CNY 25.9 billion or 8% YoY. Both the stainless
steel and aluminum supply chains witnessed growth, with the former
achieving operating income of CNY 112.2 billion, an increase of CNY
34.6 billion or 45% YoY, and the latter achieving operating income of
CNY 103.3 billion, an increase of CNY 4.8 billion or 5% YoY. The export
value of aluminum products surpassed USD 100 million for the first
time.
The new energy sector achieved operating income of CNY 25 billion,
an increase of CNY 16 billion or 176% YoY.
The agricultural product sector achieved operating income of CNY 52
billion, an increase of CNY 5.8 billion or 12% YoY. Among them, the
cereal and raw material supply chain had an operating volume of
14.46 million tons, an increase of 30% YoY, and operating income of
CNY 34 billion, an increase of 27% YoY.
The energy and chemical sector achieved an operating income of CNY
91.9 billion, a notable increase of CNY 23.8 billion or 35% YoY. The coal
supply chain also saw a growth of 11% in imported coal volume to
26.42 million tons, while domestic coal sales volume rose by a
significant 39% to 27.54 million tons.
② In addition to meeting the internal supply chain needs, the
Company's logistics system also provides market-oriented services to
outside customers. This segment's operating results are independently
accounted for, achieving an operating income of CNY 7.7 billion, an
increase of CNY 0.3 billion or 5% year on year, with a gross profit
margin of 11.81%, up by 1.12 percentage points. Comprehensive
logistics accounted for CNY 6.4 billion of the revenue, a notable
increase of CNY 0.6 billion or 10% YoY, with a gross profit margin of
9.97%, up by 0.98 percentage points. Agricultural logistics achieved an
operating income of CNY 0.3 billion, a decrease of CNY 0.06 billion or
16% YoY, due to a decrease in revenue from agricultural products.
However, the gross profit margin for agricultural logistics reached
60.76%, up by 9.73 percentage points, thanks to the growth of
high-margin provincial grain storage and futures delivery warehouse
business. Railway logistics achieved an operating income of CNY 0.98
billion, a decrease of CNY 0.18 billion or 15% YoY. Nonetheless, the
gross profit margin for railway logistics was 8.31%, up by 1.95
percentage points, benefiting from the improvement in marginal
contribution and an increased proportion of high-price business.
(2) First Quarter 2023 Primary Business Operations Overview
In Q1 2023, the Company achieved operating revenue of CNY 129.2
billion, a YoY increase of 13.43%. Net profit was CNY 758 million, a YoY
increase of 7.09%, while net profit attributable to shareholders was
CNY 546 million, a YoY increase of 14.52%. Earnings per share were
CNY 0.23, up CNY 0.03 YoY. The annualized return on net assets was
3.43%, up 0.2 percentage points YoY. The net profit margin on sales
was 0.59%, a decrease of 0.03 percentage points YoY. The days of
turnover for three main assets increased slightly to 65.1 days, and the
cash flow was negative due to the Company's efforts to expand its
market and increase procurement expenses, in line with the pace of
the business and previous years' performance.
In Q1 2023, the Company's equity investment in Harbin Rural
Commercial Bank had to provision against non-performing loans. As a
result, the Company recognized an investment loss of CNY 148 million
based on its shareholding percentage. After reversing the investment
loss, the net profit was CNY 907 million, a YoY growth of 28%, and net
profit attributable to shareholders was CNY 694 million, a YoY growth
of 46%.
In Q1 2023, the Company's non-recurring gains and losses increased by
CNY 722 million YoY, primarily due to the use of futures tools and
currency contracts to hedge against fluctuations in commodity prices
and exchange rates in the context of price volatility and exchange rate
fluctuations of bulk commodities, resulting in corresponding changes
in fair value gains or losses and disposal gains or losses, which are
closely related to the operating gains or losses of the Company's core
business.
II. The Interactive Communication Session
Question 1: What are the Company's future dividend plans and
financing arrangements?
Answer: The Company has always adhered to the philosophy of
sharing the growth dividends with long-term investors, with a dividend
payout ratio of over 55% for 4 consecutive years. Based on confidence
in future cash flows and responsible attitude towards investors, the
Company will continue to uphold its consistent dividend policy.
Considering the capital support required for achieving the Company's
strategic vision, the Company started a non-public offering of shares
project to specific objects in 2022. In the future, the Company will
consider various ways to increase its capital and owner's equity to
become the "leading company in the bulk supply chain industry and a
world-class supply chain service enterprise" as soon as possible.
Question 2: How to understand the changes in the fair value gain and
loss and asset impairment loss accounts of the Company and what
kind of operational status do these changes reflect?
Answer: The Company utilizes futures tools and foreign currency
contracts to hedge against fluctuations in commodity prices and
exchange rates to support its core spot trading business. As a result,
fair value gains and losses and disposal gains and losses are generated,
which are closely related to the operating profit and loss of the core
business. It is recommended that investors analyze these gains and
losses comprehensively when reviewing the Company's financial
statements. From the Company's perspective, net profit attributable
to shareholders is a more effective indicator for analyzing internal
performance quality.
The Company experienced significant changes in non-recurring gains
and losses during the first quarter of 2023, primarily due to the impact
of currency hedging tools on exchange rate fluctuations and the use of
futures instruments to hedge against fluctuations in various
commodity prices. Additionally, the Company's grain business entails
multiple stages and seasonal characteristics in the cultivation,
harvesting, storage, transportation, and sales of grain, and the spot
business was not fully reflected in the first quarter. These gains and
losses are closely related to the operating profits and losses of the
Company's main business.
In accordance with accounting standards, the Company recognizes
inventory impairment at the end of each quarter, but it does not mean
that a loss has actually occurred or has been reflected on the balance
sheet. It is only asset impairment recognition under the prudence
principle.
Question 3: What is the progress of the Company's private placement
of A-share stocks?
Answer: In accordance with the requirements of the securities
issuance registration system, the materials previously submitted by
the Company to the China Securities Regulatory Commission need to
be transferred to the exchange. Currently, the Company's non-public
stock issuance has been accepted by the exchange and is one of the
projects being reviewed earlier in the sequence. If there is any
progress on the matter, the Company will make a timely
announcement.
Question 4: How does the Company perceive the impact of the
digitalization and artificial intelligence trend on the future
development of the bulk supply chain, as it is currently attracting
widespread attention in the market?
Answer: As part of its exploration into integrated supply chain
services, the Company has built the "Yu Lian Tong" Digital Supply Chain
Service Platform through digital transformation of its logistics system,
using blockchain, big data, and intelligent monitoring to address pain
points faced by banks in areas such as commodity price monitoring,
ownership management, and pledged goods disposal when connecting
banks with small and medium-sized customers' funding needs. The "Yu
Lian Tong" platform does not assume any guarantee responsibility, but
by providing technical services, it can collect a stable platform service
fee.
By the end of 2022, the "Yu Lian Tong" service platform has obtained
special credits for customers totaling almost 9 billion yuan, with
customers' accumulated credit usage exceeding 1.1 billion yuan. In
2023, the Company plans to establish a dedicated technology
company to develop this business. With the rapid development of the
"Yu Lian Tong" service platform, the Company's asset-liability structure
and overall income level are expected to continue to improve, and the
ecological environment of the supply chain finance industry is
expected to be reshaped.
Question 5: What is the Company's expected market share in the
future for the new energy supply chain?
Answer: The Company currently has a relatively low market share in
the field of new energy supply chain. In the future, it will focus on
leveraging its logistics advantage and overall industry layout advantage
to expand its core customers, enlarge core products, and increase
market share. The Company is not pursuing a monopoly position in the
industry competition and hopes to maintain a reasonable market
share level.
Question 6: What are the Company's plans and arrangements for
internationalization?
Answer: The Company's internationalization plan mainly focuses on
countries and regions along the Belt and Road, and expands through
core projects and customers. In Southeast Asia, the Company takes the
opportunity of the Xiangyu Group's integrated 2.5 million-ton stainless
steel smelting project in Indonesia to develop long-term ore sources
and deepen its channel capabilities. Based on this, it seizes the
opportunity of Chinese-funded enterprises' layout in Southeast Asia,
expands and meets their supply chain service needs. In regions such as
Africa and South America, the Company obtains local mining resources
based on domestic outsourcing of semi-finished products and
long-term supply agreements with downstream customers, and builds
a new energy industry chain operation path. The Company will
announce the investment situation of specific projects at the
appropriate time.
Question 7: What are the reasons for the Company's stable growth in
operating performance in 2022?
Answer: The Company's core strategy is centered around its
ownership of rail and warehousing resources, which the Company
combine with integrated water and road transportation resources to
create an agile, networked logistics service system. The Company
leverage its powerful global channel system to optimize procurement
and sales structures, service schedules, and achieve peak-to-valley
pricing that lowers overall customer costs, increases customer
stickiness, and enables the Company to expand its business volume
and service offerings.
Additionally, the Company places great emphasis on meeting the full
range of user service needs, providing tailored supply chain services to
clients in different fields. The Company's business model is relatively
stable, with low sensitivity to price changes in its profit structure. By
consistently focusing on customer core demands in recent years,
iteratively refining business and profit models, and enriching and
optimizing product portfolios, the Company's revenue growth, net
profit growth, and management efficiency levels have been
consistently higher than industry averages.
Question8: What are the competitive barriers for the Company in the
new energy supply chain？
Answer: The Company possesses certain first-mover advantages in the
new energy industry, including advantages in information channels,
resource integration, and international logistics. As a leading domestic
supply chain enterprise, the Company is able to leverage its
advantages in international logistics systems to provide customers
with global resource allocation and distribution services. The Company
has established professional ground teams for business expansion in
Africa, South America, Australia, Southeast Asia, and other regions,
providing supply chain services to core enterprises in the new energy
industry.
Question9: What is the business plan for the agricultural sector of
the Company?？
Answer: In terms of cultivation, the Company has established
partnerships with numerous supply and marketing cooperatives to
enrich the supply and sales channels for products such as pesticides,
fertilizers, and seeds, in order to better serve the needs of farmers. In
terms of regional and variety expansion, building on the existing
advantage in maize varieties, the Company plans to cautiously expand
into other varieties (such as soybean and wheat), covering areas such
as Heilongjiang, Henan, Liaoning, Jilin, and Shandong, and
consolidating the leading position among peers with the help of digital
technology. Additionally, the Company plans to expand its oil
production and processing bases in Liaoning, Guangxi, and Xinjiang to
practice the industrial chain operation mode of "supply chain services
plus production manufacturing". As for internationalization, in
addition to the established New Zealand market, the Company is also
considering expanding into markets such as the United States and
Canada.
III. Mr. Cheng Yiliang's Outlook for the Company's 2023 Overall
Strategy
In 2023, the Company will be focusing on "Platformization,
Internationalization, and Digitalization" while also focusing on
"Organizational Optimization and Capability Enhancement". Efforts will
be made to expand the Company's customer base, geographical reach,
optimize the Company's services, and diversify the Company's r
product offerings, all in pursuit of achieving the Company's budget
objectives.
In terms of digital transformation, the Company will establish a
technology subsidiary responsible for the research and operation of
the "Yulian Tong" Digital Supply Chain Service Platform. The Company
will set up a professional sales team and vigorously expand customer
and financial institutions, seeking to achieve exponential growth in
customer loan volume. Drawing from experience in operating
Industry-level Agricultural Internet Platforms, the Company will
accelerate the construction of an industrial alliance ecosystem on the
basis of a stable profit model. the Company will make the food
planting and warehouse alliance a reality in Suihua, the surrounding
areas of Yian and Fujin, and promote the landing of the grain
circulation alliance platform.
With respect to international expansion, on the one hand, the
Company will closely focus on policies and situations related to the
"Belt and Road," "BRICS," and "RCEP" initiatives to expand overseas
channels and the scale of international business. On the other hand,
the Company will deepen the full supply chain service of the "Xiangyu
Group's Indonesia 2.5 million-ton stainless steel smelting-integrated
project." The Company will upstream build stable overseas
procurement channels for nickel, chromium, and coal, and
downstream further expand overseas incremental customers. In
addition, the Company will enhance international logistics channel
construction and promote overseas warehouse layout expansion,
thereby enhancing comprehensive service capabilities.
With regards to capital operations, the Company aim to strengthen its
reserves by conducting a private placement of A-share stocks, while
enhancing the contribution of its net profit attributable to
shareholders to the Company‘s overall net profit figures.
In order to elevate its abilities, the Company intend to refine its
systems for cultivating project-based businesses, driving productivity
gains and value optimization. Furthermore, the Company plan to
develop specialized, all-in-one supply chain logistics platforms,
drawing upon both domestic and international logistics resources. In
this vein, the Company will also shore up its risk management
capabilities by advancing its digital risk control apparatus, embedding
procedures for risk control, and establishing automated risk alerts.
Last but not least, the Company would like to extend our heartfelt
thanks to all of the Company’s shareholders and partners for their
unwavering support. As the Company move forward, we remain
committed to delivering outstanding business results that will justify
the trust and confidence that has been placed in us.
Please note that the Company strictly abides by the relevant regulations on
information disclosure and communicates with investors. However, if there are any
discussions on the Company's strategic plans or intentions, it cannot be considered
as a guarantee or commitment by the Company or management towards the
Company's performance. Therefore, the Company sincerely advise investors to pay
attention to investment risks.
