- Revenue rose to RMB816.2
million (US$130.1
million) -
- The Company's year-over-year net profit increased by
102.4% to RMB26.1 million
(US$4.2 million) -
ZHANGZHOU, China, May 17, 2018 /PRNewswire/ -- China Zenix Auto
International Limited (NYSE: ZX) ("Zenix Auto" or "the
Company"), the largest commercial vehicle wheel manufacturer in
China in both the aftermarket and
OEM market by sales volume, today announced its unaudited financial
results for the first quarter ended March
31, 2018.
Financial Highlights
First Quarter 2018:
- Revenue was RMB816.2 million
(US$130.1 million), up 21.8%
year-over-year;
- Sales to the Chinese OEM market increased by 33.8%
year-over-year;
- Sales of aluminum wheels increased by 99.1%
year-over-year;
- Gross margin was 15.4%;
- Net profit and total comprehensive income for the period was
RMB26.1 million (US$4.2 million) with earnings per American
Depositary Share ("ADS") of RMB0.51
(US$0.08) compared with a net profit
and total comprehensive income of RMB12.9
million with earnings per ADS of RMB0.25 in the first quarter of 2017.
Mr. Junqiu Gao, Deputy CEO and
Chief Sales and Marketing Officer of Zenix Auto, commented, "The
combined effects of the Chinese government's anti-truck overloading
policy, supply-side reforms and higher fixed asset investments,
revitalized new truck demand. Also, the aftermarket demand began to
slowly rebound after the two past sluggish years. We expect the
margin to continue to improve as the utilization rate of our
aluminum wheel production line continues to rise, and product price
adjustments continue."
Mr. Martin Cheung, CFO of Zenix
Auto, commented, "In an environment of high raw material costs, we
proactively adjusted pricing of our end products. As a result, our
gross margin improved from 14.7% in the fourth quarter of 2017 to
15.4% in the first quarter of 2018. In the meantime, our increased
shipments of aluminum wheels also positively contributed to the
overall margin improvement."
2018 First Quarter Results
Revenue for the first quarter increased 21.8% to RMB816.2 million (US$130.1
million) from RMB 670.4
million in the first quarter of 2017. The increase in
revenue on a year-over-year basis was mainly due to strong sales to
the domestic truck OEM market which was driven by Chinese
government's enforcement of its anti-truck overloading policy. The
increase in total revenue was also attributable to the upward price
adjustments in response to rising raw material costs.
Sales to the Chinese OEM market increased by 33.8%
year-over-year to RMB465.1 million
(US$74.1 million) in the first
quarter of 2018 compared to RMB347.6
million in the same quarter of 2017. Total unit sales in the
OEM market increased by 11.6% year-over-year during the first
quarter of 2018.
Aftermarket sales in China
increased by 9.7% year-over-year to RMB253.9
million (US$40.5 million) in
the first quarter of 2018 from RMB231.5
million in the first quarter of 2017. Total unit sales in
the aftermarket increased by 1.7% year-over-year as the aftermarket
wheel segment began to recover after two sluggish years.
International sales increased by 6.5% year-over-year to
RMB97.2 million (US$15.5 million) in the first quarter of 2018
compared to sales of RMB91.2 million
in the first quarter of 2017. Total unit sales in the international
sales decreased by 3.6% year-over-year in the first quarter of 2018
mainly due to continued weak demand in Southeastern Asian
countries.
In the first quarter of 2018, domestic OEM sales, domestic
aftermarket sales and international sales contributed 57.0%, 31.1%
and 11.9% of revenue, respectively.
Sales of tubed steel wheels accounted for 45.7% of 2018 first
quarter revenue compared to 44.9% in the same quarter in 2017.
Tubeless steel wheel sales represented 41.3% of 2018 first quarter
revenue compared to 45.4% in the same quarter of 2017. While tubed
and tubeless steel wheel sales remain the main sources of revenue
for the Company, sales of aluminum wheels increased by 99.1%
year-over-year and accounted for 9.5% of first quarter revenue as
compared to 5.8% in the same quarter a year ago. The tightened
regulation by the Chinese government to curb emissions and increase
road safety continued to fuel high demand for light-weight tubeless
and aluminum wheels.
First quarter gross profit increased by 19.1% to RMB125.9 million (US$20.1
million), compared to RMB105.7
million in the same quarter in 2017. Gross margin was 15.4%,
compared with 15.8% in the first quarter of 2017. The decrease in
gross margin on a year-over-year basis was mainly due to higher raw
material costs. The Company raised selling prices during the first
quarter in all markets. However, in order to capture the
aftermarket recovery, the price adjustment in this segment was not
high enough to offset the increase in raw material costs, causing a
slight deterioration in overall gross margin.
Selling and distribution expenses increased by 6.1% to
RMB45.0 million (US$7.2 million) from RMB42.4 million in the first quarter of 2017. The
increase in selling and distribution expenses was primarily caused
by higher sales in the first quarter of 2018 compared with the same
quarter last year. As a percentage of revenue, selling and
distribution expenses were 5.5% in the first quarter of 2018,
compared to 6.3% in the same quarter a year ago.
Research and development ("R&D") expenses decreased by 8.3%
to RMB12.9 million (US$2.0 million), compared to RMB14.0 million in the first quarter of 2017.
R&D as a percentage of revenue was 1.6% in the first quarter of
2018, compared to 2.1% in the same quarter a year ago. As the
Company's aluminum and new steel products continue to mature,
R&D expenses were reduced.
Administrative expenses decreased by 2.9% to RMB30.7 million (US$4.9
million) from RMB31.6 million
in the first quarter of 2017. As a percentage of revenue,
administrative expenses were 3.8%, compared to 4.7% of revenue in
the first quarter of 2017.
Net income and total comprehensive income were RMB26.1 million (US$4.2
million) in the first quarter of 2018 compared to net income
and total comprehensive income of RMB12.9
million for the first quarter of 2017.
Basic and diluted income per ADS were RMB0.51 (US$0.08)
in the first quarter of 2018 compared to basic and diluted income
per ADS of RMB0.25 in the first
quarter of 2017.
In the first quarter of 2018, the Company recorded net cash flow
from operating activities of RMB39.3
million (US$6.3 million).
Higher sales to the domestic OEM market increased total account
receivables and inventories. Days Sales Outstanding (DSO) remained
at 58 days in the first quarter of 2018, slightly increased from 57
days for the full year of 2017. The Company did not incur any
capital expenditures for the purchase of property, plant and
equipment in the first quarter of 2018.
During the first quarter of 2018 and 2017, the weighted average
number of ordinary shares was 206.5 million and the weighted
average number of ADSs was 51.6 million.
As of March 31, 2018, Zenix Auto
had bank balances and cash of RMB783.7
million (US$124.9 million) and
fixed bank deposits with a maturity period over three months of
RMB290.0 million (US$46.2 million). Total bank borrowings were
RMB558.0 million (US$89.0 million). Total equity attributable to
owners of the Company was RMB2,572.8
million (US$410.2
million).
Conference Call Information
The Company will host a conference call, to be simultaneously
webcast, on Thursday, May 17, 2018 at
8:00 a.m. EDT/ 8:00 p.m. Beijing Time. Interested parties may
participate in the conference call by dialing +1-877-407-0782 (U.S.
Toll Free) or +1-201-689-8567 (International). Please dial in five
minutes before the call start time and ask to be connected to the
"China Zenix Auto" conference call.
A replay will be available shortly after the conclusion of the
conference call through June 17,
2018, at 8:00 a.m. EDT.
Interested parties may access the replay by dialing +1-877-481-4010
(U.S. Toll Free) or +1-919-882-2331 (International) and using
Conference ID 29037 to access the replay.
Exchange Rate Information
The United States dollar (US$)
amounts disclosed in this press release are presented solely for
the convenience of the reader. All translations from RMB to U.S.
dollars are made at a rate of RMB6.2726 to US$1.00, the effective noon buying rate as of
March 31, 2018 in The City of New York, for cable transfers of RMB
as set forth in the H.10 weekly statistical release of the Federal
Reserve Board. The percentages stated are calculated based on RMB
amounts.
About China Zenix Auto International Limited
China Zenix Auto International Limited is the largest commercial
vehicle wheel manufacturer in China in both the aftermarket and OEM market
by sales volume. The Company offers more than 798 series of
aluminum wheels, tubed steel wheels, tubeless steel wheels, and
off-road steel wheels in the aftermarket and OEM markets in
China and internationally. The
Company's customers include large PRC commercial vehicle
manufacturers, and it also exports products to over 75 distributors
in more than 28 countries worldwide. With six large, strategically
located manufacturing facilities in multiple regions across
China, the Company has a designed
annual production capacity of approximately 15.5 million units of
steel and aluminum wheels as of March 31,
2018. For more information, please
visit: www.zenixauto.com/en.
Safe Harbor
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "confident" and similar statements. The
Company may make written or oral forward-looking statements in its
periodic reports to the SEC, in its annual report to shareholders,
in press releases and other written materials and in oral
statements made by its officers, directors or employees. Statements
that are not historical facts, including statements about the
Company's beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement. Further information regarding these risks is included in
our filings with the SEC. The Company does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law. All information provided in this
press release and in the attachments is as of the date of the press
release, and the Company undertakes no duty to update such
information, except as required under applicable law.
For more information, please contact
Kevin Theiss
Awaken Advisors
Tel: +1-(212) 521-4050
Email: Kevin.Theiss@awakenlab.com
- tables follow -
China Zenix Auto
International Limited
|
Unaudited
Condensed Consolidated Statements of Profit or Loss
and Other Comprehensive Income
|
For the three
months ended March 31, 2018 and 2017
|
(RMB and US$
amounts expressed in thousands, except number of shares and ADSs
and
per share data)
|
|
|
Three Months Ended
March 31,
|
|
2017
Q1
|
|
2018
Q1
|
|
2018
Q1
|
|
RMB'
000
|
|
RMB'
000
|
|
US$'
000
|
Revenue
|
670,356
|
|
816,207
|
|
130,123
|
Cost of
sales
|
(564,640)
|
|
(690,294)
|
|
(110,049)
|
Gross
profit
|
105,716
|
|
125,913
|
|
20,074
|
Other operating
income
|
6,416
|
|
4,174
|
|
665
|
Net exchange
loss
|
(306)
|
|
(2,457)
|
|
(392)
|
Selling and
distribution costs
|
(42,435)
|
|
(45,015)
|
|
(7,176)
|
Research and
development
expenses
|
(14,017)
|
|
(12,855)
|
|
(2,049)
|
Administrative
expenses
|
(31,621)
|
|
(30,707)
|
|
(4,895)
|
Finance
costs
|
(5,290)
|
|
(5,670)
|
|
(904)
|
Profit before
taxation
|
18,463
|
|
33,383
|
|
5,323
|
Income tax
expense
|
(5,546)
|
|
(7,235)
|
|
(1,153)
|
|
|
|
|
|
|
Profit and
total
comprehensive income for
the period
|
12,917
|
|
26,148
|
|
4,170
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
Basic
|
0.06
|
|
0.13
|
|
0.02
|
Diluted
|
0.06
|
|
0.13
|
|
0.02
|
Earnings per
ADS
|
|
|
|
|
|
Basic
|
0.25
|
|
0.51
|
|
0.08
|
Diluted
|
0.25
|
|
0.51
|
|
0.08
|
|
|
|
|
|
|
Shares
|
206,500,000
|
|
206,500,000
|
|
206,500,000
|
ADSs
|
51,625,000
|
|
51,625,000
|
|
51,625,000
|
China Zenix Auto
International Limited
|
Unaudited
Condensed Consolidated Statements of Financial
Position
|
(RMB and US$
amounts expressed in thousands)
|
|
|
December 31,
2017
|
|
March 31,
2018
|
|
March 31,
2018
|
|
RMB'000
|
|
RMB'000
|
|
US$'
000
|
ASSETS
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Inventories
|
178,034
|
|
248,831
|
|
39,670
|
Trade and other
receivables and
prepayments
|
900,162
|
|
937,899
|
|
149,523
|
Prepaid lease
payments
|
9,425
|
|
9,425
|
|
1,503
|
Pledged bank
deposits
|
35,200
|
|
39,800
|
|
6,345
|
Fixed bank deposits
with maturity
period over three months
|
290,000
|
|
290,000
|
|
46,233
|
Bank balances and
cash
|
751,612
|
|
783,729
|
|
124,945
|
Total current
assets
|
2,164,433
|
|
2,309,684
|
|
368,219
|
Non-Current
Assets
|
|
|
|
|
|
Property, plant and
equipment
|
1,272,774
|
|
1,235,260
|
|
196,929
|
Prepaid lease
payments
|
367,024
|
|
364,668
|
|
58,137
|
Deferred tax
assets
|
25,500
|
|
26,127
|
|
4,165
|
Intangible
assets
|
17,000
|
|
17,000
|
|
2,710
|
Total non-current
assets
|
1,682,298
|
|
1,643,055
|
|
261,941
|
Total
assets
|
3,846,731
|
|
3,952,739
|
|
630,160
|
EQUITY AND
LIABILITIES
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Trade and other
payables and
accruals
|
635,425
|
|
708,803
|
|
113,000
|
Amount due to
shareholders
|
8,742
|
|
10,597
|
|
1,690
|
Taxation
payable
|
3,573
|
|
8,606
|
|
1,372
|
Bank
borrowings
|
558,000
|
|
558,000
|
|
88,958
|
Total current
liabilities
|
1,205,740
|
|
1,286,006
|
|
205,020
|
Deferred tax
liabilities
|
86,670
|
|
86,463
|
|
13,784
|
Deferred
income
|
7,699
|
|
7,500
|
|
1,196
|
Total non-current
liabilities
|
94,369
|
|
93,963
|
|
14,980
|
Total
liabilities
|
1,300,109
|
|
1,379,969
|
|
220,000
|
EQUITY
|
|
|
|
|
|
Share
capital
|
136
|
|
136
|
|
22
|
Paid in
capital
|
392,076
|
|
392,076
|
|
62,506
|
Reserves
|
2,154,410
|
|
2,180,558
|
|
347,632
|
Total equity
attributable to
owners of the company
|
2,546,622
|
|
2,572,770
|
|
410,160
|
Total equity and
liabilities
|
3,846,731
|
|
3,952,739
|
|
630,160
|
|
|
|
|
|
|
China Zenix Auto
International Limited
|
Unaudited
Condensed Consolidated Statement of Cash Flows
|
For the three
months ended March 31, 2018
|
(RMB and US$
amounts expressed in thousands)
|
|
|
Three Months
Ended
|
OPERATING
ACTIVITIES
|
March 31,
2018
|
|
RMB'
000
|
US$'
000
|
Profit before
taxation
|
33,383
|
|
5,323
|
Adjustments
for:
|
|
|
|
Amortization of prepaid
lease payments
|
2,356
|
|
376
|
Depreciation of property
plant and equipment
|
37,816
|
|
6,028
|
Release of deferred
income
|
(199)
|
|
(32)
|
Finance costs
|
5,670
|
|
904
|
Loss on disposal of
property, plant and equipment
|
5
|
|
1
|
Interest income
|
(3,272)
|
|
(522)
|
Operating cash flows
before movements
in working capital
|
75,759
|
|
12,078
|
|
|
|
|
Increase in
inventories
|
(70,797)
|
|
(11,287)
|
Increase in trade and
other receivables and prepayments
|
(39,508)
|
|
(6,299)
|
Increase in trade and
other payables and accruals
|
73,378
|
|
11,698
|
Cash generated from
operations
|
38,832
|
|
6,190
|
Interest
received
|
3,559
|
|
567
|
PRC income tax
paid
|
(3,036)
|
|
(484)
|
NET CASH FROM
OPERATING ACTIVITIES
|
39,355
|
|
6,273
|
INVESTING
ACTIVITIES
|
|
|
|
Placement of pledged
bank deposits
|
(4,600)
|
|
(733)
|
Proceeds on disposal
of property, plant and equipment
|
39
|
|
6
|
Placement of fixed
bank deposits with maturity periods over
three months
|
(240,000)
|
|
(38,262)
|
Withdrawal of fixed
bank deposits with maturity periods over
three months
|
240,000
|
|
38,262
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(4,561)
|
|
(727)
|
FINANCING
ACTIVITIES
|
|
|
|
New bank borrowings
raised
|
(255,000)
|
|
(40,653)
|
Repayment of bank
borrowings
|
255,000
|
|
40,653
|
Interest
paid
|
(6,016)
|
|
(959)
|
Advance from
shareholder
|
1,855
|
|
296
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(4,161)
|
|
(663)
|
NET INCREASE IN
CASH AND CASH EQUIVALENTS
|
30,633
|
|
4,883
|
Cash and cash
equivalents at beginning of the period
|
751,612
|
|
119,825
|
Effect of foreign
exchange rate changes
|
1,484
|
|
237
|
Cash and cash
equivalents at end of the period
|
783,729
|
|
124,945
|
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SOURCE China Zenix Auto International Limited