[中报]东方精工(002611):2024年半年度报告（英文）
原标题:东方精工:2024年半年度报告（英文） 【Date of Disclosure】26 July 2024 Part I Important Notes, Table of Contents and Definitions The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Guangdong Dongfang Precision Science & Technology Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the contents of this Report are true, accurate and complete and free of any misrepresentations, misleading statements, or material omissions, and collectively and individually accept legal responsibility for such contents. Tang Zhuolin, the Company’s legal representative, Shao Yongfeng, the Company’s Chief Financial Officer, and Chen Nan, the Head of the Company’s Accounting Department (equivalent to Financial Manager) hereby guarantee that the financial statements carried in this Report are truthful, accurate and complete. All directors of the Company attended in person the board meeting for the approval of this Report. For possible risks with respect to the Company, please refer to “X Risks Faced by the Company and Countermeasures” of “Part III Management Discussion and Analysis” herein. And investors are kindly advised to read through the aforesaid contents. The Company has no semi-annual dividend plan, either in the form of cash or stock. Special Declaration This Report has been prepared in Chinese and translated into English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. Table of Contents Part I Important Notes, Table of Contents and Definitions ........................................................... 2 Part II Corporate Information and Key Financial Information ................................................... 7 Part III Management Discussion and Analysis ............................................................................. 10 Part IV Corporate Governance ...................................................................................................... 67 Part V Environmental and Social Responsibilities ....................................................................... 70 Part VI Significant Events ............................................................................................................... 72 Part VII Share Changes and Shareholder Information ............................................................... 78 Part VIII Preference Shares ............................................................................................................ 86 Part IX Corporate Bonds ................................................................................................................ 87 Part X Corporate Financial Statements ......................................................................................... 88 Documents Available for Reference 1. The financial statements signed and sealed by the Company’s legal representative, Chief Financial Officer, and the person-in-charge of the financial organ. 2. All the originals of the Company’s announcements and documents that were disclosed to the public during the Reporting Period on the media designated by the CSRC for information disclosure. 3. The 2024 Semi-Annual Report carrying the signature of the legal representative. 4. The documents above are lodged in the Securities Department of the Company, 18A, China Merchants Plaza, 1166 Wanghai Road, Shekou, Shuiwan Community, Zhaoshang Street, Nanshan District, Shenzhen City, Guangdong Province, China. Definitions
Part II Corporate Information and Key Financial Information I Corporate Information
1. Contact information of the company Whether the company's registered address, company office address and its postal code, company website and e-mail address have changed during the reporting period. □ Applicable ? Not applicable The company's registered address, company office address and its postal code, the company's website and e-mail address remain unchanged during the reporting period, which can be found in the 2023 Annual report. 2. Information disclosure and location. Whether the information disclosure and location have changed during the reporting period. The name and address of the stock exchange website and media where the Company discloses its half-yearly report and the place where the Company's half-yearly report has been filed has not changed during the reporting period, which can be found in the Annual Report 2023. 3. Other relevant information Whether other relevant information has changed in the reporting period □ Applicable √ Not applicable IV Key Financial Information Indicate whether there is any retrospectively restated datum in the table below. □ Yes √ No
1. Net Profit and Equity under CAS and IFRS □ Applicable ? Not applicable No difference for the Reporting Period. 2. Net Profit and Equity under CAS and Foreign Accounting Standards □ Applicable ? Not applicable No difference for the Reporting Period. VI Exceptional Gains and Losses ? Applicable □ Not applicable Unit: RMB yuan
Details of other profit and loss items that meet the definition of non-recurring profit or loss. □ Applicable ? Not applicable No such cases in the Reporting Period. Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: □ Applicable ? Not applicable No such cases in the Reporting Period. Part III Management Discussion and Analysis With “intelligent equipment manufacturing” as its primary strategic focus, Dongfang Precision concentrates on the manufacturing of high-end intelligent equipment. Its principal operations include “intelligent packaging equipment” and “water powersports equipment”. The “intelligent packaging equipment business” consists of smart corrugated packaging equipment, digital printers, and industrial Internet industry solutions. Dongfang Precision accounts for approximately 15% of the global corrugated packaging equipment market, ranking first among domestic enterprises of the same type and Top 2 in the global market. The company has the capability to flexibly customize intelligent, efficient, and integrated production line equipment for customers. Leveraging its capabilities in industrial Internet industry solutions and its advancements in the field of artificial intelligence, the company is upgrading from intelligent equipment manufacturing to high- quality digital and intelligent development, achieving a comprehensive breakthrough in its “digital and intelligent” strategy. In the marine power equipment sector, Parsun Power’s outboard motor products have ranked first in the domestic industry for three consecutive years (2020-2022). In 2021 and 2023, Parsun Power successfully mass- produced 115-horsepower and 130-horsepower gasoline outboard motors, breaking the long-term monopoly of American and Japanese brands in this power segment. In March 2024, Parsun Power officially released the 300- horsepower gasoline outboard motor at the Shanghai International Boat Show, marking a full entry of domestic outboard motors into the global high-end mainstream market. During the reporting period, the company achieved a total operating revenue of approximately 2.161 billion yuan, a year-on-year increase of 3.77%. The net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses, was approximately 229 million yuan, a year-on-year increase of 40.97%. The gross profit margin was 32.07%, a year-on-year increase of 2.78 percentage points. The asset-liability ratio was 33.32%, a year-on-year decrease of 6.62 percentage points. The core main business of the company, the intelligent packaging equipment sector, achieved a total operating revenue of 1.783 billion yuan, a year-on-year increase of 6.88%, and the gross profit margin increased by 3.95 percentage points year-on-year, further enhancing the profitability of the sector while the scale grew. Additionally, the company’s digital printing business released the new WONDER INNO PRO SINGLE PASS industrial high-definition color digital printer. For the first time, this device achieved the application of high-speed digital inkjet printing technology with a baseline printing accuracy of 1800 NPI in the field of industrial-grade paper packaging printing. This provides the color printing packaging field with a high-definition color digital printing device that can achieve an effect comparable to offset printing through digital printing technology. The company’s industrial Internet business launched new products and modules such as “InterLink”, “Micro Mes”, and “Equipment After-sales Service Management System”. These have been prioritized for use in improving the company’s internal various brands and specifications of corrugated box printing and packaging complete line products. They will also help customers in the corrugated paper packaging and composite paperboard industries to improve the intelligence and digitization of a large number of existing production line equipment, empowering “digital manufacturing.”
1. The Industries to which the Company's Intelligent Packaging Equipment Business Segment Belongs 1.1 Demand side—customers The intelligent packaging equipment division of the Company specializes in “smart corrugated packaging equipment” and “digital printers”. This division primarily serves B-end customers such as corrugated cardboard and corrugated box manufacturers. As a machinery supplier, the Company provides various single machine and complete production line products for cardboard and box production, which makes the Company depend on the development of the downstream paper packaging industry to some extent. End demand for corrugated packaging is growing: The corrugated box field is one of the major fields of activities. Corrugated packaging products are used in a vast number of fields, including food and beverage, household chemicals, electronic products, and e-commerce express delivery, and are inelastically demanded by consumers. Corrugated packaging applications in electronics, beverages, food, household chemicals and express delivery accounted for 26%, 21%, 20%, 13% and 13% of the overall applications of corrugated packaging in downstream sectors, respectively. Over the past few years, the scale of China’s express corrugated packaging market has been on the rise. By the forecast of Qianzhan Industry Research Institute, the scale of China’s express corrugated packaging market will continue to rise in the upcoming years and is estimated to reach RMB86.4 billion by 2025 (CAGR for 2019 to 2025: Approximately 15%). Terminal markets, including the express, electronics, and household chemicals terminal markets, show an increasing demand for corrugated box and board packaging, which will drive the expansion of the capacity of corrugated packaging enterprises and thus increase the demand for corrugated packaging machinery, benefiting the machinery manufacturers. Between 2017 and 2023, the domestic express business recorded rapid growth, with a compound annual growth rate (CAGR) of approximately 27%. Data from the State Post Bureau showed that the total volume of domestic express delivery for 2023 was 162.48 billion pieces, up 16.8% year-on-year. Trend of China's Express Business Volume Above Scale, 2016-2023
According to the “June 2024 China Express Development Index Report” and related statistical data released by the State Post Bureau in July 2024, China’s express market maintained a rapid development trend in the first half of 2024, supporting the prosperity of the online economy and adding momentum to economic and social development. In the first half of the year, the cumulative volume of express business in the domestic market was 80.16 billion pieces, a year-on-year increase of 23.1%, and the cumulative express business revenue was 653 billion yuan, a year-on-year increase of 15.1%. Since March 2024, the monthly business increment has exceeded 2 billion pieces. Especially during the “May Day” holiday (May 1st-5th) and the Dragon Boat Festival holiday (June 8th- 10th), the average daily express business volume increased by 32.7% and 25.6% year-on-year, respectively. Looking forward to the second half of the year, the fundamentals supporting the continued development of the domestic express industry will not change. There are still many favorable factors to promote industry growth. Policy dividends demand and promote the rapid growth of new consumption will continue to exert force in the second half of the year. With the improvement of industry service quality and supply capacity, express services will reach more countries and regions, link more industries and enterprises, better meet more personalized and customized delivery needs, and the industry is expected to gain more market increments. The steady growth of the express industry scale continues to have a positive impact on the development of the domestic corrugated paper packaging industry. According to statistics, in 2023, the new production capacity of domestic corrugated paper and boxboard paper was 7.67 million tons, and the eliminated production capacity was 3.19 million tons, achieving a net new production capacity of 4.48 million tons. It is expected that there will still be about 6.6 million tons of new production capacity in 2024. Guided by the “large-scale equipment renewal” policy, a swift acceleration in equipment upgrades is anticipated within the domestic corrugated packaging sector. In February 2024, the Central Financial and Economic Affairs Commission held its fourth meeting to promote a new round of large-scale equipment renewal and consumer goods trade-in, explicitly mentioning the need to “promote the renewal and technological transformation of various types of production equipment and service equipment”. On March 1, the State Council executive meeting considered and passed the Issuing the Action Plan for Promoting Large-scale Equipment Renewals and Consumer Goods Trade-ins, proposing to “promote the proportion of advanced production capacity to continue to increase”. Over the years, China's corrugated packaging sector has largely consisted of numerous small- and medium- sized box manufacturers dominated by low-end production capacities, leading to a highly decentralized market and relatively low industry consolidation. Responding to the Party Central Committee and State Council's “large-scale equipment renewal” policy directive, the corrugated packaging industry anticipates a heightened pace of equipment modernization throughout the 14th Five-Year Plan period, with an expected surge in medium- to high-end production capacity proportions. With the continuous development of the downstream end consumption industry in China, the requirements of corporate customers for corrugated boxes gradually increase. In the corrugated packaging industry, market concentration and the phase-out of low-end production capacity is an inevitable trend, due to market competition, capacity upgrading, M&A, etc. It is estimated that the line machinery that is more intelligent and productive will replace the existing corrugated cardboard production lines and corrugated box printing and packaging production line equipment in the upcoming five to ten years. By statistics, there are over 6,000 existing corrugated cardboard production lines in the domestic market, and more corrugated box printing and packaging machinery. According to estimates, the overall market share of the domestic industry of the 15 listed corrugated paper packaging companies in China increased from 5.7% in 2017 to 10.9% in 2023. Statistics from the China Packaging Federation show that in 2023, there were 2,991 enterprises above designated size in the national paper and paperboard container manufacturing industry, a decrease of 164 from 2022, indicating a decrease in the number of enterprises above designated size. The above data shows that the concentration of the domestic corrugated paper packaging industry is continuously improving. In addition, the China Packaging Federation report shows that the domestic paper packaging industry achieved a profit of 10.867 billion yuan in 2023, a year-on-year increase of 35.65%, of which the industry achieved a profit of 6.879 billion yuan in the second half of 2023, with a significant year-on-year increase in profits in the second half of 2023, and the trend of profit concentration towards leading enterprises is obvious. Digital and intelligent upgrading of the paper packaging and printing industry bring new development opportunities. The traditional production mode has caused domestic paper packaging and printing enterprises to be overly dependent on skilled technicians at critical positions and slow to identify the outdated management mode. The “strategy of robot assembling line” and “smart factory” are increasingly recognized by the industry. Amid intelligent manufacturing, the paper packaging and printing industry will usher in industrial upgrading and transformation. Additionally, leading packaging enterprises, including Xiamen Hexing Packaging Printing Co., Ltd. (HXPP), MYS Group Co. Ltd. (MYS), Shenzhen YUTO Packaging Technology Co., Ltd., and Shenzhen Jinjia Group Co., Ltd., have pushed ahead with Internet-based development in recent years by entering into intelligent manufacturing, cloud printing, or other markets, expected to launch a revolution in the Internet-based development of the paper packaging and printing industry and injecting new impetus into industry integration. Concurrently, amid intelligent manufacturing and Internet-based packaging, leading enterprises engaged in corrugated packaging machinery are also expected to embrace new development opportunities. Overseas demand is relatively steadily: In recent years when environmental pollution becomes more and more serious, growing environmental awareness has led to “plastic bans and restrictions” across the world, providing a major boost to paper as an alternative to plastic. England announced a ban on single-use plastics starting October 2023, covering items like disposable plastic plates, trays, bowls and utensils. France is phasing in bans on single-use plastic packaging for around 30 fruits and vegetables starting January 2022. The U.S. Department of the Interior announced that single-use plastics will be gradually phased out in national parks and other public lands by 2032. The global green packaging market is projected to grow from USD262.27 billion in 2023 to USD381.98 billion in 2028, with a compound annual growth rate of 7.81% during the forecast period (2023-2028). The corrugated cardboard produced by corrugated cardboard production lines is used to make various corrugated boxes, corrugated cartons and other corrugated packaging materials, which are rigid consumer products in European and American countries. According to Statista data, the US e-commerce market is expected to grow at a compound annual growth rate of 12.7% from 2017 to 2027. The philosophy of “sustainability” is gaining ground in the European and US consumer goods packaging markets. With the growing trend of "replacing plastics with paper" in the packaging industry, demand for corrugated packaging materials in the European and US consumer goods markets continues to grow steadily, helping to drive demand for corrugated packaging production line equipment. 1.2 Supply side——the Company’s presence in the industry A． World-leading comprehensive strength Corrugated cardboard production lines: Major manufacturers of corrugated cardboard production lines around the world include Fosber Group（Business entities under the company）, BHS (Germany), Marquip (a wholly- owned subsidiary of the American Barry-Wehmiller), and J.S. Machine. Among them, Fosber Group and its major rival from Germany, BHS, lead the others and are leaders in the global middle- and high-end corrugated cardboard production line field. Fosber Group holds approximately 30% of the global middle- and high-end corrugated cardboard production line market and more than 50% of the North American market. Corrugated & pressure rollers, key components of corrugated cardboard production lines: The subsidiary Tiru?a Group has more than 40 years of experience in the corrugated and pressure roller segment and is renowned in Europe as a world-leading specialist in this segment. Corrugated box printing and packaging production line equipment: Major manufacturers in this field include Dongfang Precision, Bobst (Switzerland), Gopfert (Germany), Ward (a wholly-owned subsidiary of the American Barry-Wehmiller), Ding Long (Shanghai), and Guangzhou Keshenglong. Dongfang Precision is an industry leader in China and is competitive with the global industry leader, Bobst, from Switzerland. With an advantage in global resource coordination, leading design concept, excellent overall R&D strength, and a product system featuring complete categories and rich specifications, the Company can produce products that meet dozens of specifications and different market positioning, covering fixed/open-close type, top printing/bottom printing, and complete production line (inline) products/single machine, and has the completest product lines and richest product base of the corrugated box printing and packaging production line equipment worldwide. Digital printers: Major manufacturers include HP, EFI, Koenig & Bauer Durst, Wonder Digital, Hanhua Gongye, and Atexco, among others. Wonder Digital, a majority-owned subsidiary of Dongfang Precision, has been specializing in the development and manufacturing of digital printers for 13 years, and is a leader in the domestic digital printer industry. It takes the lead among global suppliers of digital printers in applying high-speed inkjet printing technology to corrugated packaging and is committed to extending digital printing technology to such fields as paper packaging (colour printing & pre-printing), advertising, home furnishing, building materials, and label printing. In conclusion, Dongfang Precision leads the world in terms of its comprehensive strength in smart corrugated packaging equipment business and can provide downstream customers such as cardboard plants and box plants with “one-stop” machinery and service support that covers each production process, including corrugated cardboard production, corrugated box production, and pre-printing and post-printing production processes, and different technology roadmaps, including flexographic printing and digital printing. The value of the global corrugated packaging equipment market is estimated to be about RMB30-40 billion. In terms of operating revenue, Dongfang Precision accounts for approximately 15% of the global corrugated packaging equipment market, ranking first among domestic enterprises of the same type and Top 2 in the global market. B. The rapid development of digital printing brings more development opportunities for the industry. According to the latest report The Future of Inkjet Printing to 2027 by Smithers Pira, the market value of inkjet printing in graphic printing and package printing globally reached USD86.8 billion in 2022. The inkjet printing market has grown strongly over the past 5 years. Total inkjet printing output in 2022 was 46.2% higher compared to 2017, with printed volume growing by over two-thirds. The report forecasts that growth of inkjet printing in packaging will be most rapid from 2022 to 2027, with expected compound annual growth rates of 17.7% by shipment quantity and 16.3% by value. Digital printing is expected to increase its market share in corrugated packaging printing from 4% in 2022 to 9% in 2027, with high potential for growth of digital printing in the corrugated packaging industry. of Dongfang Precision, are as follows: (1) Advanced technology and a wide range of products Digital printing adopts inkjet printing technology. It can be divided into UV printing (including colour printing & pre-printing, with printing effects close to colour offset printing) and water-based ink printing (including colour printing & pre-printing, with water-based dye/pigment inks, etc.) in terms of the ink type and printing effects. In 2024, Wonder Digital released the new WONDER INNO PRO SINGLE PASS industrial high-definition color digital printer, with a baseline printing accuracy of up to 1800 NPI, achieving a revolution from color printing to high-definition color printing in the field of paper packaging printing with domestic digital printing technology. This provides the color printing packaging field with a high-definition color digital printing device that can achieve an effect comparable to offset printing through digital printing technology. (2) Integrated digital solutions that feature human-machine interaction and an integrated system Wonder Digital’s digital printers feature high levels of system integration and human-machine interaction in product design and technical implementation. Compared to traditional package printers, they are more user-friendly and easier-to-operate. Wonder Digital’s digital printers can be operated after simple training, with just one person needed to operate a multi-pass digital printer and two to run a single-pass inline for mass production. (3) Convenient, flexible and efficient Digital printing enjoys an absolute advantage in small and medium batches of printing and urgent printing needs as it saves tedious processes, such as platemaking, imposition, and colour calibration. It enables electronic documents generated via typesetting software, design software, and office applications to be directly output to digital printers. Moreover, digital printing enables one-sheet, flexible printing, which cannot be done by traditional printing. Additionally, digital printing enables a more flexible printing method that is, modifying while printing, and vice versa, enabling “zero stock”. Such a flexible and quick printing method has strengthened the competitiveness of customers in a competitive environment where every minute counts. With regard to pattern design, platemaking in traditional printing is not required in digital printing, allowing more freedom for design and enabling designers to give full play to their professionalism and tailor products to customers’ needs. 2. The industry to which the company's industrial Internet industry solutions business belongs According to the Classification of Strategic Emerging Industries (2018), Dongfang Precision’s “industrial Internet industry solutions” business division falls under the “industrial Internet and supporting services” industry. Policy side: The Guiding Opinions of the State Council on Deepening the “Internet plus Advanced Manufacturing” and Developing the Industrial Internet released by the State Council in 2017 marked China’s official entry into digital development from information-based development in terms of industries. “Accelerate the development of the industrial Internet” was proposed for the first time in the report on government work in 2018 and became a frequent visitor in the reports on government work for the next five years. In 2020, the National Development and Reform Commission stated that, as one of the new network infrastructure types, the industrial Internet is a part of the new infrastructure. Under the guidance of a range of policies, the industrial Internet and smart factory have become the strategic development orientation of the transformation and upgrading of China’s manufacturing. Market side: China is the only country in the world whose industries cover all industrial categories in the United Nations’ industrial classification. Concurrently, it is expected to grow into the world’s largest industrial digitalization market. For the current manufacturing industry of China, digital transformation is no longer an “option” but a “compulsory course” that is critical to its survival and long-term development. As the manufacturing sector enters a “digital and intelligent” era, an increasing number of manufacturing enterprises have realized that buying production equipment, enterprise resource planning (ERP) systems, or manufacturing executive systems (MES) cannot meet the systematic requirements of intelligent manufacturing. By contrast, industrial Internet platforms can systematically resolve all critical issues that cannot be handled through traditional means. According to the Bluebook on the Digital Transformation of Enterprises--Empowering the Low- carbon and Green Transformation of the Real Economy with New IT released by the China Academy of Information and Communications Technology, after relevant manufacturing enterprises complete digital transformation, on average, their production efficiency will be boosted by 37.6%, their operating expenses will be lowered by 21.2%, and their energy utilisation rate will be improved by 16.1%. Concurrently, with the rapid development and continuous iteration of the new-generation information technology, the cost of digital transformation of enterprises is gradually decreasing, and more and more industrial enterprises will implement industrial Internet-based digital transformation. According to the data released by Frost & Sullivan, the scale of the market of industrial Internet platforms and relevant solutions in China by 2025 is estimated to reach RMB193.12 billion. Between 2021 and 2025, the CAGR of the market of industrial Internet platforms and relevant solutions in China is approximately 45.3%. The Scale of the Market of Industrial Internet Platforms and Relevant Solutions and Forecast between 2020 and 2025 |
