CIMC Vehicles receives registration approval for the IPO on the ChiNext Board. The global leader in semi-trailer and specialty vehicles sophisticated manufacturing to be listed on the “A + H” shares markets
(19 May 2021, Hong Kong) – The China Securities Regulatory Commission announced the approval for the registration and listing of CIMC Vehicles (Group) Co. Ltd ((“CIMC Vehicles”) or the “Group”, stock code: 1839.HK) on the ChiNext Board. CIMC Vehicles is a global leader in semi-trailer and specialty-vehicles sophisticated manufacturing. It has been listed on the Hong Kong Stock Exchange since July 2019. In the first half of 2020, upon the deepening reform of the ChiNext registration system, CIMC Vehicles prepared for its listing on the ChiNext Board, passing the hearing on 25 December of the same year.
According to the prospectus, the number of shares to be issued will be no more than 310,000,000, raising RMB 2 billion. Funds raised will mainly be used for investment in constructing the sophisticated manufacturing system. Approval of the registration also implies that CIMC Vehicles will officially become the first global manufacturer of semi-trailers and specialty vehicles with dual "A+H" listing status.
Revenue growth in the first half of 2020 may exceed 40% – supported by the resilience of the China market
In 2020, despite the complex Covid-induced environment, CIMC Vehicles recorded RMB26.50 billion in terms of revenue, representing a year-on-year increase of 13.3% and setting a new record high.
As disclosed in the prospectus, revenue in the first half of 2021 is expected to surpass RMB14.51 billion to reach RMB16.2 billion, representing a year-on-year increase of 29.1% to 44.1%, maintaining a high level of rapid growth.
CIMC Vehicles expects that its three major businesses are in a long boom cycle due to its outstanding performance in the China market.
In terms of semi-trailer business, CIMC Vehicle’s China semi-trailer business grew steadily, which was attributable to the implementation of new national standards, policies and regulations such as GB-7258, as well as rapid growth in the logistics transportation market.
Considering the express delivery business in 2020, the business volume of express delivery in China exceeded 83 billion pieces, with a CAGR of 32.2% from 2015 to 2021. From January to April 2021, the aggregate business volume of express service companies in China amounted to 30.43 billion pieces, representing a year-on-year increase of 59.9%. The business volume for the first four months of 2021 approached the level for the full year of 2016.
In terms of truck bodies for specialty vehicles, given the steady progress of infrastructure investment, the sales of heavy trucks achieved "13 consecutive increases. " At the same time, CIMC Vehicles developed strategic cooperation with important OEMs such as SAIC Iveco Hongyan and Shanxi Automobile. This helped promote in-depth binding with key customers and achieved satisfactory results.
In 2020, CIMC Vehicle’s revenue generated from the truck bodies business for specialty vehicles reached RMB10.16 billion, representing a year-on-year increase of 37.8%. The truck bodies for specialty vehicles business therefore becomes another business pillar, contributing tens of billions in revenue.
For the refrigerated truck bodies business, growth was more significant due to the development of China’s fresh cold chain logistics market.
Zhou Yuan, an academic at the Chinese Academy of Sciences, said that the cold chain circulation rate in developed countries reaches 85%, while that of China is only 19%; the proportion of pre-cooled fruits and vegetables in China is generally 10%, while that of developed countries is as high as 95% to 100%.
In light of the huge development prospects for fresh food e-commerce, demand for cold chain logistics is increasing sharply. Data indicates that the number of registrations for China's cold chain logistics-related companies increased by 52% in the first half of 2020. For the supply of upstream vehicle equipment, CIMC Vehicles not only has a comprehensive technological lead, but also defines the market with its production capacity and market share.
Fully implementing "Sophisticated Manufacturing System" to solidify industry leadership
In 2013, CIMC Vehicles ranked number one in the world for the first time in terms of semi-trailer business. Since then, it has been the global business champion in semi-trailers for 8 consecutive years, becoming one of China’s representative global brands.
In 2014, its second year being world number one, CIMC Vehicles started establishing its "Sophisticated Manufacturing System" and built the industry’s first "Light Tower" plant in Dongguan.
The "Sophisticated Manufacturing System" is an innovation to the traditional manufacturing system for transforming the low-tech and labor-intensive industry to automated and intelligent production using high-tech and high-end equipment for high-quality, high-utilization, high-efficiency, and low-polluting production goals. As of now, CIMC Vehicles has built 13 “Light Tower” plants for semi-trailers; 6 “Light Tower” plants for producing truck bodies for specialty vehicles; and 2 “Light Tower” plants for producing refrigerated truck bodies worldwide.
In terms of overseas markets, CIMC Vehicles completed the construction and upgrading of its North American manufacturing line of container chassis trailers, van trailers and refrigerated trailers in 2019. In 2020, the construction and upgrading of European manufacturing lines of container chassis trailers and refrigerated trailers were building as planned.
At the beginning of 2021, its refrigerated trailer plants in the United States and Canada commenced production with both adopting the CIMC Vehicle’s Sophisticated Manufacturing System. Adhering to the business philosophy of “Intercontinental Operation, Local Manufacturing”, CIMC Vehicles overseas plants are actively taking advantage of the global layout and continuously expanding their competitive advantages.
With the support of the Sophisticated Manufacturing System, the operating revenue of CIMC Vehicles has reached a record high in recent years. Major pollutant emissions have barely increased, and even dropped significantly.
The prospectus shows that from 2018-2020, VOCs emissions from the production process of CIMC Vehicles reduced by 33.6%, while scrapped paint residues emissions and other hazardous waste emissions reduced by 14.7% and 86.1% respectively.
In 2020, CIMC Vehicles formulated a work plan for 2020-2022 to comprehensively build a Sophisticated Manufacturing System. CIMC Vehicles will continue investing in the construction and upgrading of “Light Tower” plants to promote comprehensive automation, intelligence and digitalization of production, so that the industry can shift to modular, standardized and environmentally friendly production with a higher degree of automation, leading the transformation of high-end manufacturing in the industry.