Ocean Grand Chemicals Holdings LimitedOcean Grand Chemicals Holdings Limited
Annual Results for the Year Ended 31 March 2003
Contents
Financial Highlights
Corporate Profile
Competitive Strengths
Future Plans & Strategies
Mission
Financial Highlights (1)
2003
HK$ ‘000
2002
HK$ ‘000 Change
TurnoverTurnover 434,202434,202 159,946 171%
Gross profitGross profit 79,69079,690 31,692 151%
Net profitNet profit 63,68963,689 23,193 175%
EPS EPS (Note 1)(Note 1) 13.41 cents13.41 cents 4.88 cents 175%
Dividend per shareDividend per share 4.0 cents4.0 cents Nil N/A
Note 1 – calculated based on 475,000,000 shares, the number of shares in issue immediately after the listing of the Company’s shares
Financial Highlights (2)
2003
HK$ ‘000
2002
HK$ ‘000
Change
HK$ ‘000
Cash on handCash on hand 36,63536,635 3,054 33,581
Cash inflow (outflow) from Cash inflow (outflow) from operating activitiesoperating activities
57,09857,098 (8,352) 65,450
Net assetsNet assets 154,828154,828 57,471 97,357
Total bank borrowingsTotal bank borrowings 30,53430,534 13,539 16,995
Gearing ratioGearing ratio 19.7%19.7% 23.6% 3.9%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2000 2001 2002 2003
159,946
90,985 92,643
Year ended 31 March
Turnover
CAGR 68%
(HK$’000)
434,202
Turnover by Product Category
Gold salts 38.9%
Palladium salts42.0%
Silver salts0.2%
Palladium saltssubcontracting 18.8%
For the year ended 31 March 2002
Rhodiumsalts 6.2%
Palladium salts41.7%
Sliver salts8.6%
Palladium salts subcontracting13.4%
For the year ended 31 March 2003
Gold salts 30.1%
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2001 2002 2003
23,19319,480
12,473
Year ended 31 March
Profit Attributable to Shareholders
CAGR 72%
(HK$’000)63,689
0
10
20
30
20020
10
20
30
2002
(%)
Year ended 31 March
Profit Margin
19.8%18.4%
(%)
Year ended 31 March
14.5%
Gross Profit Margin Net Profit Margin
14.7%
2003 2003
The Group principally engages in the processing, production and trading of Precious Metal Electroplating Chemicals (PME salts) in the PRC and Hong Kong
Principal Business
Principal Business
Products – 4 PME Salts
Products Used in the electroplating of:
Jewellery, watch cases and bands, spectacles frames, fashion accessories & semiconductor devices
Silver saltKAg(CN)2
Spectacles frames, writing utensils, edge card connectors and semi-conductor devices
Watch parts, electronic devices, optical instruments, chemical equipment
Rhodium sulphateRh2(SO4)3
Palladium saltPd(NH3)2Cl2
Gold saltKAu(CN)2
Jewellery, hardware and semi-conductor devices
Precious Metal Electroplating (PME) Chemicals Industry
Jewellery, genuine & imitation
Clocks and watches
Printed circuit boards (PCB)
Precious metal electroplating
chemicals
Semi-conductor
Ind
ustrial
Deco
rative
Fashion accessories, ornaments & lighting equipment
Connector
Jewellery
PCB
Watches
Applications
Palladium plated watches and bracelets
ClocksOptical Glass Fiber
Decorative Ornaments
• Zhuhai Factory, Nan Bing Technology and Industrial Park
• Products: silver salt, palladium salt and rhodium sulphate
• Area: 43,000 sq feet• Max. annual production capacity: silver salt –
160,000kg, palladium salt – 6,000 kg, rhodium sulphate – 200 kg
Production Facilities
• Hunghom Factory • Product: gold salt• Area: 10,000 sq feet• Max. annual production capacity:
7,000 kg
Hong Kong
PRC
Corporate Milestones
• Founded by Mr. Yip Kim Po • commenced trading and manufacturing of gold salts in Hong Kong
• injected into Ocean Grand Holdings Limited
• commenced establishment of Zhuhai factory
• expanded production facilities in Hong Kong
• Zhuhai factory commenced operation in January• Listed on the Hong Kong Stock Exchange on 30 June
1991
1999
2000
2002
2003
Reselling other suppliers’ PME salts to customers under own brand name
Trading
Business Models
Manufacturing
Selling PME salts produced in-house
Processing
Processing precious metal provided by customers into PME salts for the customers
Competitive Strengths
Production & delivery
system
Highentry barriers
OGC
Position in market
Dedicated management
Competitive Strengths
Pearl River Delta region – light industries highly developed
Geographical advantage of a PRC production base – proximity to end-users and electroplaters
No other large scale electroplating chemicals manufacturer in the PRC
Position in Market
Competitive Strengths
High entry barriers
OGC's strengths
• Technology know-how to ensure consistency of product quality
• Possesses well-trained and experienced technical staff
• Huge capital investment: over HK$100 million in production facilities
• Zhuhai Government took 18 months to approve the design of our Zhuhai factory. Any competitors will need to go through the same process. OGC has a first mover advantage
Barriers
Complicated productiontechnology
Capital-intensive
Strict regulations on environmental protection
Competitive Strengths
Short production cycles (~ 24 hours) enable flexible production schedule and minimization of inventories
Ability to meet urgent orders of customers
Flexible production and delivery system
Minimize inventories and capital locked up
Competitive Strengths
Experienced and dedicated management
Mr. Yip Kim Po• co-founder and chairman• over 20 years of experience in business
administration• mainly responsible for strategic planning and policy setting
Mr. Hui Ho Ming, Herbert • deputy chairman and executive director
• over 20 years of experience in securities regulations and corporate management
Mr. Yao Zongren• executive director • over 30 years of experience in chemical engineering work • responsible for overall strategic planning, policy making, business development
and overall supervision
Future Plans & Strategies
Bro
aden
p
rod
uct
sco
pePremier supplier
of top-quality electroplating
chemicals
Stren
gth
en
the m
arketing
of "K
enlap
"
Extend marketin
g and
distributio
n network
in the PRC
Enhance
value-added
services
Expand R&Dcapabilities
26
Mission
To establish Kenlap as the leading brand name
for precious metal electroplating
chemicals in the PRC
and Hong Kong
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