Hilong Holding Ltd. · HKEX:1623
Hilong — FY2016 Earnings Presentation
20 slides from Hilong's earnings presentation, March 2017
Slide 1: 2016 Annual Results Presentation
2016 Annual Results Presentation March 2017
Slide 2: Disclaimer
Disclaimer The presentation material contains forward-looking statements. Such forward-looking statements are subject to various risks, uncertainties and assumptions, certain of which are not under our control, causing actual results and growth which may differ materially from these direct or indire
Slide 3: Content
Content 1 Results Highlights 2 Business Review 3 Financial Performance 4 Business Outlook 3
Slide 4: Results Highlights
yD @HILONG Results Highlights
Slide 5: Results Highlights
Results Highlights Hilong maintained stable operation despite the tough market environment in 2016 Oilfield equipment manufacturing Oilfield services and services Maintained stable operation for traditional Drill pipe and related products business advantageous business of drilling services achieved
Slide 6: Financial Overview
Financial Overview RMB MM Revenue RMB MMGross Profit Net Profit RMB MM to Equity Owners RMB mm RMB mm RMB mm 3,000 900 180 810 161 2,484 800 160 2,500 716 700 667 667 140 125 2,000 1,894 1,929 1,861 120 600 500 100 1,500 400 80 1,000 300 60 200 40 500 100 20 0 0 0 2015 2016 2015 2016 2015 2016 Total
Slide 7: Business Review
yD @HILONG Business Review
Slide 8: Oilfield Services
Oilfield Services Maintained stable operation of drilling services Segment Revenue: -23% and accelerated diversification of business RMB mm GP margin % Achieved healthy operation for traditional advantageous business amid the depressed market 1200 42% Successfully maintained steady operation of exis
Slide 9: Oilfield Equipment Manufacturing & Services
Oilfield Equipment Manufacturing & Services Segment Revenue: +16% Achieved notable growth in weak market RMB mm GP margin % Drill pipe and related products Maintained a strong market position in China and a 40% relatively stable market share 40% Successfully relocated part of the production facility
Slide 10: Line Pipe Technology and Services
Line Pipe Technology and Services Implemented the strategy of diversification, Segment Revenue: +26% high-end orientation and internationalization RMB mm GP margin % Realized substantial growth amid the tough market Coordinated development of domestic and international business and won several order
Slide 11: Offshore Engineering Services
Offshore Engineering Services Vigorously promoted the new segment and 2016 Revenue of RMB68 MM won several orders despite tough market conditions RMB mm Successfully finished two major EPCI service contracts for 590 CNOOC and built a solid track record 600 Successfully won the contract from TIMAS, p
Slide 12: Financial Performance
yD @HILONG Financial Performance
Slide 13: Revenue Breakdown
Revenue Breakdown Revenue Breakdown by Segment Offshore engineering services 4% Offshore engineering Oilfield services services 37% 24% Oil equipment Oilfield services manufacturing & services 37% 40% Oil equipment manufacturing & services Line pipe technology Line pipe technology & 27% & services s
Slide 14: Cost and Gross Profit Analysis
Cost and Gross Profit Analysis Total Cost in 2015: 1.67B Gross Profit Margin Increased Others 7% RMB mm GP margin % 1200 40% Raw materials 34% Subcontracting cost 34.6% 23% 1000 32.6% Power & utilities 30% 810 3% 800 Depreciation Transportation 12% 667 4% Labor cost 17% 600 20% Total Cost in 2016: 1
Slide 15: Profitability
Profitability A Year-on-Year Decline of Net Profit Profitability maintained stable RMB mm 200 180 161 160 140 125 120 100 80 60 40 20 0 2015 2016 Gross profit margin Net profit margin 2015 2016 15
Slide 16: Capital Structure and Return
Capital Structure and Return Capital Structure Return on Assets & Return on Equity (1) % 5.4% 2015 2016 2.5% 3.7% 1.8% RMB mm 2015 2016 Operating cash flow 485 139 Return on assets Return on equity Cash & cash equivalents 821 657 Current assets 3,588 3,691 Turnover Days for Current Assets (2) Total
Slide 17: Capital Expenditure
Capital Expenditure Capital Expenditure Breakdown Major Capital Expenditure Projects RMB mm 350 306 Offshore engineering services Continuous upgrade for Hilong 106 300 269 96 250 65 200 Oilfield services Procurement of rig components 150 120 94 100 4 Oilfield equipment 37 manufacturing & services 50
Slide 18: Business Outlook
yD @HILONG Business Outlook
Slide 19: To Implement New Development Strategies under Changing Market Conditions
To Implement New Development Strategies under Changing Market Conditions Relocated parts of its drill pipes production lines to Invest in new rigs to support the future growth of drilling Russia, helping to cover Russia and its surrounding services areas more effectively. Relocate the second product
Slide 20: Q&A
yD @HILONG Q&A