Tuesday, April 13, 2021
 
Columnist
Martin Hennecke
 
TIANJIN DEV
HKEx Stock Code : 00882 
 
Corporate Profile
Principally engaged in (i) utilities including supply of electricity, water and heat and thermal power; (ii) hotels; (iii) electrical and mechanical including the manufacture and sale of presses, mechanical and hydroelectric equipments and large scale pump units; and (iv) strategic and other investments including investments in associates which are principally engaged in the production, sale and distribution of winery products, elevators and escalators and provision of port services in Tianjin.

Business Review - For the year ended December 31, 2012

Utilities

The Group's utility businesses are mainly operating in the Tianjin Economic and Technological Development Area (“TEDA”) through supplying electricity, water, heat and thermal power to industrial, commercial and residential customers.

TEDA is a national development zone and ranked no. 1 in terms of overall capabilities in the PRC.

Situated at the centre of Bohai economic rim, TEDA is an ideal place for manufacturing and R&D developments.

Electricity

Tianjin TEDA Tsinlien Electric Power Co., Ltd. (“Electricity Company”) is principally engaged in supply of electricity in TEDA. It also provides services in relation to maintenance of power supply equipment and technical consultancy. Currently, the installed transmission capacity of Electricity Company is approximately 706,000 kVA.

In 2012, the Electricity Company reported revenue of approximately HK$2,292.9 million and profit of approximately HK$40 million, representing an increase of 9.8% and 136.7% respectively over last year. The rise in profit was mainly due to improvement in gross profit margin and reversal of provision of expenses. The total quantity of electricity sold for the year was approximately 2,646,676,000 kWh, representing an increase of 1.8% over last year.

Water

Tianjin TEDA Tsinlien Water Supply Co., Ltd. (“Water Company”) is principally engaged in supply of tap water in TEDA. It also provides services in installation and maintenance of water pipes, technical consultancy, retail and wholesale of water pipes and related parts. The daily water supply capacity of the Water Company is approximately 400,000 tonnes.

In 2012, the Water Company reported revenue of approximately HK$355.7 million, representing an increase of 12.3% over last year; and loss of approximately HK$51.2 million compared to a profit of approximately HK$5.8 million last year. In view of this, the Company has exercised caution to make a provision of impairment of HK$30 million to relevant assets of Water Company. The total quantity of water sold for the year was approximately 46,699,000 tonnes, representing a decline of 1.8% over last year.

Heat and Thermal Power

Tianjin TEDA Tsinlien Heat & Power Co., Ltd. (“Heat & Power Company”) is principally engaged in distribution of steam and heat for industrial, commercial and residential customers within TEDA. The Heat & Power Company has steam transmission pipelines of approximately 360 kilometres and more than 105 processing stations in TEDA. The daily distribution capacity is approximately 30,000 tonnes of steam.

In 2012, the Heat & Power Company reported revenue of approximately HK$1,123.9 million and profit of approximately HK$34.4 million, representing an increase of 12.6% and decrease of 30.6% respectively over last year. The decrease in profit was mainly due to increase in cost of operations. The total quantity of steam sold for 2012 was approximately 4,214,000 tonnes, representing an increase of 7.4% over last year.

Hotels

Courtyard by Marriott Hong Kong

Courtyard by Marriott Hong Kong (“Courtyard Hotel”), situated in a prime location on the Hong Kong Island, is a 4-star hotel with 245 guest rooms. It is positioned as an ideal lodge for business and leisure travellers.

In 2012, Courtyard Hotel's revenue increased by 3% to approximately HK$117.1 million and profit of approximately HK$23.4 million was recorded, compared to a loss of approximately HK$10.9 million last year. The good result was due to improved room rates and effective control in expenses. During the year, the average occupancy rate was 85.6%, down 0.7% from 86.3% in last year.

Hotel Property in Tianjin

The management contract for operation of Hyatt Regency Tianjin Hotel was terminated in April 2012. The Group is taking active steps to explore various alternatives including redevelopment or disposal. During the year, a loss of approximately HK$21.9 million was recorded, which was mainly expenses and depreciation.

Electrical and Mechanical

Hydraulic Presses

On 1 November 2012, Tianjin Tai Kang Industrial Co., Ltd. (天津泰康實業有限公司) (“Tianjin Tai Kang”), a 82.74%-owned subsidiary of the Company, entered into an agreement with Tianjin Benefo Machinery & Electric Holding Co., Ltd. (天津百利機電控股集團有限公司) (“Tianjin Benefo”) for the acquisition of 56.62% equity interest in Tianjin Tianduan Press Co., Ltd. (天津市天鍛壓力機 有限公司) (“Tianduan”) at a consideration of RMB455,557,000 (equivalent to approximately HK$560,334,000). Tianjin Benefo is a non-controlling shareholder of Tianjin Tai Kang. Tianduan is principally engaged in the manufacture and sale of presses and mechanical equipments and is a key player in the hydraulic presses industry in the PRC.

Completion took place on 31 December 2012 and Tianduan then became a 78.45%-owned subsidiary of Tianjin Tai Kang. For the year ended 31 December 2012, the financial results of Tianduan were equity accounted for as a 21.83%-owned associate.

Details of the acquisition can be referred to the Announcement and Circular of the Company dated 1 November 2012 and 22 November 2012 respectively.

Hydroelectric Equipment

On 1 November 2012, Tianjin Tai Kang entered into an agreement with Tianjin Benefo for the acquisition of 66% equity interest in Tianjin Tianfa Heavy Machinery & Hydro Power Equipment Manufacture Co., Ltd. (天津市天發重型水電設備製造有限公司) (“Tianfa Equipment”) at a consideration of RMB301,984,000 (equivalent to approximately HK$371,439,000). Tianjin Benefo is a non-controlling shareholder of Tianjin Tai Kang. Tianfa Equipment is principally engaged in the manufacture and sale of hydroelectric equipments and large scale pump units and is a key player in the hydroelectric industry in the PRC.

Completion took place on 31 December 2012 and Tianfa Equipment then became a wholly-owned subsidiary of Tianjin Tai Kang. For the year ended 31 December 2012, the financial results of Tianfa Equipment were equity accounted for as a 34%-owned associate.

Details of the acquisition can be referred to the Announcement and Circular of the Company dated 1 November 2012 and 22 November 2012 respectively.

Strategic and Other Investments

Winery

As set out in the announcement published by Dynasty Fine Wines Group Limited (“Dynasty”) (stock code: 828) on 26 March 2013, an internal investigation is being conducted on certain transactions of Dynasty. As the investigation is not yet completed on the date these consolidated financial statements were approved by the Board, financial information of Dynasty for the year ended 31 December 2012 is not available to the Group. Accordingly, for the purpose of preparing these consolidated financial statements, the Group has equity accounted for its share of loss of Dynasty for the year ended 31 December 2012 based on the best estimates made by the directors of the Company. In addition, in view of the on-going investigation of Dynasty, the Group has recognized an impairment loss against the carrying amount of its interest in Dynasty based on its fair value, which is determined with reference to the quoted price of Dynasty's listed shares on 31 December 2012. As a result, the Group recognized an aggregate loss of approximately HK$111.3 million which is included in the consolidated income statement as share of loss of associate for the year ended 31 December 2012, compared to a profit of approximately HK$1.9 million in last year.

Port Services

During the year, the revenue of Tianjin Port Development Holdings Limited (“Tianjin Port”) (stock code: 3382) increased by 8.4% to approximately HK$17,934.7 million; profit for the year of Tianjin Port was approximately HK$1,716.9 million, representing an increase of 5.5% over last year, and profit attributable to owners of Tianjin Port was approximately HK$705.8 million.

Tianjin Port contributed to the Group a profit of approximately HK$148.2 million, representing a decrease of 1% compared to that of last year.

Elevators and Escalators

During the year, the revenue of Otis Elevator (China) Investment Company Limited (“Otis China”) amounted to approximately HK$16,685.6 million, representing an increase of 1% over 2011.

Otis China contributed to the Group a profit of approximately HK$345.7 million, representing a decrease of 4.5% over last year.

Investment in Binhai Investment Company Limited

During the year, the Group had 8.28% equity interest in Binhai Investment Company Limited (“Binhai Investment”) (stock code: 8035). As at 31 December 2012, the market value of the Group's equity interest in Binhai Investment was approximately HK$218.3 million (2011: approximately HK$193.5 million) and the unrealized fair value gain of approximately HK$24.8 million (2011: unrealized fair value loss of approximately HK$89.3 million) was recognized in other comprehensive income.

Business Outlook - For the year ended December 31, 2012

In 2013, the world economic situation will remain complicated and volatile, and confront many uncertainties. The downturn risk of global economy still exists given the factors like Eurozone debt crisis, unresolved US fiscal cliff and economic slowdown in the emerging markets. China will also face the risks of tensions in the region even though its economy achieved a soft landing. Under the new situation, the Company will continue to play to its strengths and accelerate the growth pace with the prerequisite of maintaining smooth development of existing businesses. The Company is capable of dealing with challenges in the future and able to grasp expansion opportunities with its sound financial position and quality assets. The Company has achieved a satisfactory performance in 2012, and we feel confident for the future.

Source: Tianjin Dev Holdings (00882) Annual Results Announcement
Chairman Yu Rumin (Acting Chairman) Issued Capital (shares) 1,067M
Par Value HKD 0.1 Market Capitalisation (HKD) 4,836M
 
Login
Password
Register  Forget Password
Advanced Search
© 2021 The Standard, The Standard Newspapers Publishing Ltd.
Home | Business | Metro | Focus | Opinion | Markets | World | Sports | Entertainment | Monday Money | Property | Macau | Weekend