Major China gas separation plant manufacturers have reported increased revenues and profits.
Hangzhou Hangyang reports that during the first half of 2018 it has earned RMB 3,676.4m and it is 26.1% more than what they did in the same period in 2017. Operating profit for the first half of 2018 is RMB 453.8m, an increase of 282.7% than that in the same period last year. Net profit attributable to the shareholders of the listed company has increased satisfactorily by 243.8% to RMB 338.07m.
Of the operating income, manufacturing of air separation equipment (ASU) contributes RMB 1384.2m (an increase of 45.8%) and engineering contracting contributes RMB 83.5m (an increase of 93.6%).
With a total installed capacity of more than 1.1 million Nm3O2/h among its 28 subsidiary gas companies and over 10 years of business development, the revenue from the industrial gas business sector of Hangzhou Hangyang is RMB 2076.40m for the report period with a moderate increase of 15.3% compared with the corresponding period last year, and is still the larger share of their operating income (56.5%)
Commenting on their performance, the largest China air separation equipment manufacturer said the in spite of the complicated economic situations both domestic and abroad, they have overcome various difficulties and unfavourable factors and have continued the development trend they had in 2017.
For the equipment manufacturing sector, during the report period they have received orders for ASUs and petrochemical equipment with a total value of RMB 2800m, including two sets of 105000 m3/h ASU for Ningxia Baofeng Energy Group, one set of 80000 m3/h ASU for Henan Xinlianxin Shenleng Energy, one set of 75000 m3/h ASU for Fujian Fuhua Tianchen Gas, and one set of 50000 m3/h ASU for Fujian Dadonghai Industries Group.
Furthermore, the company will manufacture two sets of cryogenic separation equipment for extracting carbon monoxide (CO) from coal-to-gas process. The equipment will process 410000 m3/h of feed gas to give 42000 m3/h, adopting the new process technology that the company have developed by themselves. This will be the largest equipment of its kind that the company have manufactured.
For the industrial gas business sector, during the report period, the supply of pipeline gas has increased and the demand from bulk liquid retail market is strong, leading to price increase and the significant improvement of profit margins, and therefore the increased revenue from the sector.
The company also stated their ambition in the development of their industrial gas business, “In order to realise the rapid expansion of the gas business, the company will actively look into the merger and acquisition model of the gas industry, look for suitable targets to merge or acquire, and enhance the study and tracking of projects of special gases for the semiconductor market and hydrogen industry in order to achieve breakthroughs in the above sectors as soon as possible.”
The company expects that the net profit attributable to the shareholders for the first nine months of 2018 would increase by 112.3% to 150.9% compared to the same period in 2017.
Another long-established ASU manufacturer, Suzhou Oxygen (Suyang) has publicised a more than satisfactory interim report of 2018. Operating income for the first half of 2018 has grown 96.9% to RMB 289.3m, compared to the same period in 2017. Operating profit has soared a stunning 5900% to RMB 13.3m for the first half of 2018 from a loss of RMB 225,012 for the same period in 2017. Similarly, net profit attributable to shareholders of the listd company has substantially improved to RMB 10m, representing an increase of 1,547.6%. With non-recurring profit and loss deducted, the figure jumps to 2,707.06%.
The ASU manufacturing business contributes RMB 198.5m to the operating income, representing a share of 68.6% and an increase of 121.8%. The storage tank business contributes RMB 13m, representing only 4.5% of the operating income but a remarkable 500.5% increase from the same period last year.
And for the sales of natural gas, it contributes RMB 72.5m to the operating income, representing a share of 25.07% and an increase of 48.3%, compared to the same period last year. Correspondingly, net profit of the natural gas business is RMB 5.8m, an increase of 1693.7%.
During the report period, the company has cooperated with Messer and signed an agreement for the provision of a 6800 Nm3/h ASU with production of high purity oxygen, which is a ‘first’ for the company.
Commenting on the ASU manufacturing business, the company stated in the report, ”As the technology of the industry and the manufacturing process develop, there is a trend of up-sizing the gas separation equipment, and the future market demand growth will mainly focus on large scale and extra large scale gas separation equipment.”
“However, a scenario of oligopolistic competition has established in the large scale and extra large scale gas separation equipment market, whilst the competition is relatively serious in the medium to large scale and small scale gas separation equipment market since the number of manufacturers are higher.”
“The company at present follow the development trend of the industry, put more efforts on the research and manufacturing of large scale gas separation equipment, and the orders and delivery of large scale equipment are growing gradually. However, we are still lagging the leading companies of the industry. Therefore, if the company is not able to introduce quality products of gas separation equipment in the future, there is a risk that our competitive position in the industry will go down, and it will have adverse influence on our future competitiveness and profitability.”
The company plan to cope with this by expanding new products and new applications, by looking for new growth areas, and to introduce a new series of energy-saving products that will lead to less emissions.
Chengdu Shenleng Liquefaction Plant Co., Ltd
A comparatively young company compared the previous two companies, Chengdu Shenleng recently gave a report for their performance for the first half of 2018 that their total operating income is RMB 113m, 10.5% less than the income of the corresponding period last year. Operating profit for the report period is RMB 8.3m, which is nearly 399.4% more than the operating profit for the first half of 2017. Net profit attributable to the shareholders of the listed company for the report period is approximately RMB 7.3m, just 1.7% less than that in 2017. However, when non-recurring profit and loss is deducted, the said net profit becomes approx. RMB 6.7m and is 307.7% more than that in 2017.
During the report period, they have been awarded contracts with a total value of RMB 426m and have developed the technology for the co-production of liquefied natural gas and separation of carbon monoxide (CO). The company also pay much attention on the opportunities related to ‘gas storage for peak shaving” nature, and on the overseas projects in the major regions of the Belt and Road initiative, especially those projects with owners from China.
Sichuan Tianyi Science and Technology Co Ltd
A company specialized in the pressure swing adsorption technology for use in gas separation, Sichuan Tianyi earned RMB 238.3m in the first half of 2018, 13.9% more than that in 2017. Operating profit grows almost 47% to RMB 27.7m, compared with RMB 18.8million in 2017, whilst the net profit attributable to shareholders of the listed company is RMB 27.7m, an increase of 19.7% compared to the same figure in 2017.
The company has signed up contracts with a total value of RMB 392.8m during the report period, an increase of approximately 125.7% compared to the same period in 2017.