Effective strategies bring sector-wide gains

PUBLISHED : Monday, 26 April, 2010, 12:00am
UPDATED : Monday, 26 April, 2010, 12:00am

BBMG, one of the largest building materials manufacturers on the mainland and a leading property developer in Beijing, has announced profits in all its business segments.

BBMG operates four core businesses, including cement, modern building materials, property development and property investment and management. All sectors recorded revenue growth for the 12 months that ended on December 31 last year, thanks to the rapid expansion of the property market on the mainland.

'The company coped with the changing conditions proactively, worked out business strategies effectively, capitalised on development opportunities accurately, and leveraged on our strengths in strategic planning, industrial chain, management integration, technology and branding,' says Jiang Weiping, chairman of BBMG.

The company benefited from the economic stimulus packages introduced by the central government to tackle the global financial crisis and promote domestic economic development.

The results have encouraged the company to boost its market share through mergers and acquisitions, and re-organise its cement operations this year.

'According to market forecasts, the global economy is expected to recover gradually, while the mainland economy will continue to maintain fast growth,' Jiang says. 'We will continue to seize market opportunities arising from favourable policies introduced by the government in order to further expand strategic businesses in Beijing to other areas such as Hebei province, Tianjin and Chongqing.'

The company plans to expand its cement business through cross-industry strategic co-operation and introduce new business models in the segment based on a low-carbon and circular economy, and improve operational quality by using residual-heat power generation technology to reduce operating costs.

For its modern building materials segment, BBMG plans to focus on building the Dachang Industrial Park and expanding production capacity by introducing new production lines with an annual capacity of 50,000 tonnes of high-grade refractory products this year.

Moreover, BBMG is planning to increase its land reserves in first-tier cities, such as Beijing, Tianjin, Hangzhou and Chongqing, because of the recent recovery of the property market.

The company held 5.59 million square metres of land as of March 31.

Other than increasing its land reserves, BBMG plans to accelerate the building and sales of projects so as to achieve a higher turnover and to attain sustainable and fast development.

The company will capitalise on the reputation of its brand to increase occupancy levels and rent rates to raise the profitability of its property investment business.

'We will keep monitoring and analysing the market environment, and make timely and responsive adjustments to our business and management strategies in order to expand our business scale, capitalise on synergies, strengthen our operation against any economic downturn, enhance our competitiveness, and maximise the company's shareholders' value,' Jiang says.

BBMG recorded a 54.3 per cent increase in gross profit from 2.11 billion yuan (HK$2.4 billion) a year earlier to 3.26 billion yuan for the year to December 31 last year, while gross profit margin rose 3.2 per cent from 24.7 per cent to 27.9 per cent.

Net profit attributable to shareholders surged 54.1 per cent from 1.32 billion yuan a year earlier to 2.04 billion yuan, and the net profit margin increased 2 per cent from 15.4 per cent to 17.4 per cent during the period.

The company announced a 36.8 per cent increase in revenue to 11.7 billion yuan during the period from 8.55 billion yuan a year earlier.

The board of directors recommended a final dividend of 7 fen per share as its first dividend payout since its listing on the Hong Kong stock exchange in July last year.

Revenue from cement recorded a year-on-year growth of 39 per cent to 4.61 billion yuan thanks to a rise in selling prices and an increase in the mix of cement produced for the company's own account in total cement sales volume. The company has won bids for 28 railway projects on the mainland, including the Beijing-Shanghai High-Speed Railway, expressway works and underground railways in Beijing and the South-North Water Transmission Project.

During the period, BBMG sold 13.88 million tonnes of cement and recorded production of 16.33 million tonnes of cement and 550 million tonnes of limestone reserves for the year.

Revenue for modern building materials rose 6.6 per cent to 2.88 billion yuan compared with a year earlier.

During the period, BBMG completed the construction of a glass wool production line with a capacity of 25 million cubic metres in Dachang Industrial Park.

Property development recorded an increase of 81.5 per cent to 3.57 billion yuan for the year to December 31.

During the period, property development projects included BBMG7090, Jinyu Guanlan Times and Jinyu Times City.

In the property investment and management sector, BBMG saw an 11 per cent increase in revenue to 700 million yuan compared with a year earlier. The total gross floor area of its investment properties increased to 601,000 sqmetres after operations at Phase Three of the Global Trade Centre began last year.