Monday, November 30, 2020
Martin Hennecke
HKEx Stock Code : 01190 
Corporate Profile
The Group is primarily engaged in the design, development, production, marketing and distribution of sanitary ware branded products marketed under its own brand in the PRC and under third parties' brands on an OEM and ODM basis to its international customers. The Group's products can be divided into five major categories: (i) one-piece toilets; (ii) two-piece toilets (with separate water tanks); (iii) washbasins and stands; (iv) other ceramic products such as urinals, bidets, squat pans and soap containers; and (v) non-ceramic sanitary products that are designed by the Group and manufactured by third party subcontractors, including bath tubs, showers, faucets, hooks, bathroom cabinets, shower rooms and soap dishes.

Business Review - For the year ended December 31, 2012

In 2012, the Group's revenue reached RMB816.7 million, increasing by 24.6% as compared with last year; and profit attributable to ordinary equity holders of the Company reached RMB246.2 million, up by 53.5% as compared with last year.

Sales Volume

For the year ended 31 December 2012, the Group's sales volume was approximately 4.3 million units, increased by 17.9% as compared with last year, which further consolidated the Group's leading position as one of the largest domestic ceramic sanitary ware brands in China's mid-to-high and ceramic sanitary ware market in terms of retail sales.


The Group manufactures ceramic sanitary ware products at its production facilities in Zhangzhou, Fujian Province, the PRC. A wide section energy-saving and environmentally-friendly tunnel kilns powered by gas (節能環保型寬截面燃氣隧道窯) with an overall length of 110 meters of the Group's fifth ceramic sanitary ware production line with an annual capacity of one million units, commenced operations on 29 July 2012. The successful operation of such production line marked another great milestone in the Company's business development, which will enhance the overall production capacity of the Group to further fuel the enlargement of its domestic market share. With the successful operation of this production line, the ceramic sanitary ware production lines of the Group will produce 4.9 million units per year, which is one of the largest manufacturers of ceramic sanitary ware products in the PRC in terms of designed production capacity. The sixth production line commenced construction in last August 2012. Upon completion of construction and commencement of its operation, the Group will have an annual total output of 5.9 million units. The Group believes that its sizable production facilities provide it with economies of scale, shorten lead time in launching new products and allow it to allocate additional production capacity to manufacture its own branded products, which command a higher margin in comparison with ODM and OEM products.

Distribution Network

The Group was dedicated to the third party distributor model and continued to improve operation capacity and quality of the distribution network, to standardize distribution network governance, to promote differentiated operation innovation, to improve the quality of the network operation team and to optimize the existing network layout. As disclosed in the announcement dated 19 December 2012 published by the Company, in view of possible change of market environment in the PRC, the Company has adjusted the pace of expansion of third-party distributors points of sale by adopting a prudent approach. As such, the number of new points of sale of this year is less than the expected increase of points of sale as disclosed in the Prospectus.

The Group's distribution network, comprising 158 distributors and 47 sub-distributors operating 321 points of sale as at 31 December 2011, increased to 195 distributors and 44 sub-distributors operating 450 points of sale as at 31 December 2012, covering a wide area throughout the PRC.

On 8 November 2012, a wholly-owned subsidiary of the Group was established, which is situated at the North China Ceramics Town (華北陶瓷城) in Tanggu District, Tianjin (the “Tianjin subsidiary”). The establishment of the Tianjin subsidiary was an important initiative to facilitate the strategy of overall expansion within the domestic market. It will be responsible for market expansion and maintenance of markets in Tianjin, Hebei, Shanxi and Inner Mongolia, to build a supporting platform in Northern China for business expansion and service assurance, to provide services and supports responding to the market more timely and efficiently for various regions in Northern China, and enable distributors in Northern China to grow steadily, so as to achieve enhanced overall and rapid penetration of the Group in Northern China.

At present, the Group is preparing for the establishment of another subsidiary in Wuhan, which is expected to open in April 2013. Such subsidiary in Wuhan will be responsible for markets in Central China, including Hubei, Hunan and Henan.

Brand Building

In 2012, the Group continued to strengthen the brand image of the Group. The Group formally signed up one of Asia's most popular artists, Ms. Christine Fan, as the spokesperson for the Company on 4 August 2012. The cooperation with Ms. Christine Fan represents a further important step of the Group towards its facilitation of brand strategy. The Group will further cooperate with Ms. Christine Fan in the future, and strive to facilitate its strategy of delivering the Group as a world-class brand.

The Group also adopted TV advertisements as its promotion strategy. In 2012, the Company launched a series of TV advertisements performed by its spokespersons on mainstream media channels such as CCTV, Jiangsu TV, Hunan TV, Sina, Sohu, NetEase, and Baidu, as well as outdoor advertisements and promotions in markets across China. By virtue of the above, the Company continued its strong brand marketing efforts and penetration, kept its leading position in domestic first-tier brands, and continuously stepped towards an international brand.

The Group believes that increasing its brand awareness effectively and efficiently in China will help facilitate the strategy of overall expansion within domestic market.

Business Outlook - For the year ended December 31, 2012

Due to economic development and urbanization, annual per capita disposable income of urban households in China has recorded a substantial increase, and has created a strong demand for housing in the past few years. The rise of the emerging middle class supports rising demand for mid-to-high end sanitary ware products. The growth rate of China's real estate industry has slowed in recent years, but given higher disposable income, the increase in nominal GDP and per capita nominal GDP and accelerated urbanization in China and other macro-economic factors, it is expected that China's demand for housing and the real estate market as a whole will continue to grow, especially in the less developed and small and medium-sized cities. Over the years, by virtue of the business strategies and development strategies of remarkable technologies in innovation, superior product quality and very competitive price positioning, the Group continued to achieve excellent market performance. Looking ahead, the Group will further increase its advantages, further expand the sales network of distributors and gradually enlarge the penetration rate and promote its brand image, striving to dominate the domestic mid-to-high end ceramic market.

Source: Bolina Hold (01190) Annual Results Announcement
Chairman XIAO Zhiyong Issued Capital (shares) 1,015M
Par Value HKD 0.01 Market Capitalisation (HKD) 3,196M
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