April 24, 2001
| Contact: | Zelda Yung / Carol Wong |
| Tel: | 2801 7761 / 2801 7729 |
Global Bio-chem Technology Group Company Limited ("Global Bio-chem" or the "Company" or together with its subsidiaries, the "Group", stock code: 809), today announced that its net profit from ordinary activities attributable to shareholders for the year ended December 31, 2000 increased by 104.1 per cent to HK$230.2 million, which was in line with the estimated profit after taxation and minority interest stated in the Company's prospectus published during its initial public offer. Turnover for the year was HK$1,208.0 million, representing a 15.4 per cent increase over that of the previous year. The Company's earnings per share for the year increased by 105.1 per cent to HK 24.0 cents. As of December 31, 2000, Global Bio-chem's total assets increased 31.6 per cent to HK$1,193.6 million, and the shareholders' equity was HK$367.0 million, representing an increase of 180.8 per cent over 1999.
As stated in Global Bio-chem's prospectus dated March 7, 2001, the board of directors does not recommend a dividend distribution for the year ended in December 31, 2000.
During the year under review, sales of corn based biochemical products increased 134.4 per cent to HK$349.6 million. The remarkable result was primarily derived from the sales of modified starch which commenced in 1999 and recorded an increase of 75.5 per cent to HK$252.6 million in 2000. Besides, the mass production of amino acids and the launch of corn sweeteners to the market in the second half of the year under review also led to an increase in the sales of corn based biochemical products. The sales of these two new products accounted for 27.8 per cent (1999: 3.5 per cent) of sales of corn based biochemical products and 8.0 per cent (1999: 0.5 per cent) of the Group's turnover.
The corn based biochemical products not only lifted up the turnover, but also contributed a higher gross profit margin. The gross profit attained by these products accounted for approximately 48.1 per cent of the Group's gross profit and representing an increase of 147.0 per cent. As a whole, the Group achieved a gross profit at 33.8 per cent with a growth rate of 62.1 per cent. As a result of the improvement in gross profit margin and tight control over the operating expenses which remained at approximately 8.0 per cent of turnover, the Group's profit before tax for the year was increased from HK$147.4 million in 1999 to HK$280.7 million.
To enhance the corporate profile of Global Bio-chem in China and other Asian countries, and to provide the Group with capital and resources for continued downstream expansion, Global Bio-chem has opted for a listing on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK") on March 16, 2001.
"It is very encouraging indeed that we reported record sales and net profit in 2000 for our first annual results right after the commencement of our listing. The strong performance was attributable to the increase in the sale of higher profit margin downstream corn based biochemical products, and the increase in profit margin derived from the sales of corn refined products as a result of the decrease in the purchase costs of corn kernels. With our hard working efforts in expanding the sales of corn based biochemical products through various new and existing channels during the year 2000, the production base and technology resources developed over the past two years have begun to generate favourable returns and benefits," said Mr. Liu Xiaoming, the Chairman of Global Bio-chem.
Looking into the year 2001, Mr. Liu said: "To cope with the increasing demand for Global Bio-chem's products, especially those corn based biochemical products, it is our strategy to capitalise on our strengths and strive to achieve the vertical expansion of downstream products that contribute an average gross profit margin of over 50 per cent while maintaining a steady and healthy development of the Group in the coming years."
Global Bio-chem will expand its production capacities of lysine, a widely used amino acid, modified starch and corn sweeteners in 2001 up to 40,000 metric tonnes, 230,000 metric tonnes and 150,000 metric tonnes, respectively.
The Group also plans to launch new corn based biochemical products including glutamic acid, refined lysine, biochemical fertiliser, biochemical feed, methionine, high fructose corn syrup, and biodegradable plastic.
In order to ensure a stable and sufficient supply of key raw material such as corn starch, the Group has decided to expand its existing production capacity for corn refined products by constructioning of new production plants equipped with advanced equipment and facilities in Changchun in 2001. It is expected that by end of the year, the corn processing capacity of the Group will be double and up to 1,200,000 metric tonnes per annum.
Meanwhile, Global Bio-chem will continue to focus on research and development activities including the commercialisation and mass production of corn based biochemical products so as to keep the Group ahead of the competition.
The Group will also begin the development and expansion of its distribution network by establishing five new points of sales in China's several major cities, namely Chongqing, Dalian, Qingdao, Xian and Zhengzhou to further enhance market penetration and fortify Global Bio-chem's position as a leading manufacturer of corn refined and corn based biochemical products. Sales offices will be set up abroad in Korea, Taiwan and the Philippines with an aim to capture business opportunities in these high potential overseas markets.
"Our production plants are strategically located in the gold corn-belt, and within the food and beverage manufacturing center of the country. Global Bio-chem has a competitive edge in the following areas: (1) economies of scale from vertically integrated production, (2) cost efficiency of mass production, (3) unique production know-how and effective R&D, (4) access to low-cost raw materials, and (5) extensive sales and marketing network. The Group is a leading beneficiary of the sector's growth. We are optimistic of the many opportunities over the next year and are confident that 2001 will be another prosperous year with many satisfactory returns for Global Bio-chem," noted Mr. Liu.
Global Bio-chem is principally engaged in development, manufacture and sale of corn refined and corn based biochemical products in China and in other Asian countries. Headquartered in Hong Kong and with its main production facilities based in Changchun, Jilin Province in China, the Group is the largest corn based biochemical product manufacturer in China.
| Issued by | : | Global Bio-chem Technology Group Company Limited |
| Through | : | CorporateLink Limited |
Audited Financial Results
for the year ended December 31, 2000
2000 1999
HK$'000 HK$'000
TURNOVER 1,208,026 1,046,910
Cost of sales (799,398) (794,751)
------------- -------------
Gross Profit 408,628 252,159
Other revenue 4,933 1,206
Selling and distribution expenses (45,967) (31,687)
Administrative expenses (36,006) (26,264)
Other operating expenses (14,905) (29,713)
------------- -------------
PROFIT FROM OPERATING ACTIVITIES 316,683 165,701
Finance costs (35,947) (23,812)
Share of profit of an associate - 5,526
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PROFIT BEFORE TAX 280,736 147,415
Tax (14,227) (174)
------------- -------------
PROFIT BEFORE MINORITY INTERESTS 266,509 147,241
Minority interests (36,341) (34,483)
------------- -------------
NET PROFIT FROM ORDINARY
ACTIVITIES ATTRIBUTABLE TO
SHAREHOLDERS 230,158 112,758
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Dividend - (30,000)
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EARNINGS PER SHARE -Basic HK 24.0 cents HK 11.7 cents
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