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(Extracted from Annual Report 2022)

On behalf of the Board of Directors, I am pleased to present the Annual Report for China Mining International Limited (the “Company”) and its subsidiaries (the “Group”) for the financial year ended 31 December 2022 (“FY2022”).

FINANCIAL REVIEW

The Group recorded a net loss of RMB7.6 million for FY2022 compared to a (restated) net profit of RMB27.2 million achieved for the financial year ended 31 December 2021 (“FY2021”). Had the one-off non-recurring gain, due to the bargain purchase of RMB39.5 million arose from the acquisition of the new agriculture business in end 2021, been excluded from the (restated) results for FY2021, the Group would have incurred an adjusted net loss of RMB12.3 million for FY2021, which exceeds the Group's net loss sustained in FY2022 by about 38.2%.

The revenue of the Group in FY2022 was solely derived from its new agriculture business. Notwithstanding which, the Group would have registered a significantly higher turnover in FY2022 had it not for the then prevalent Covid-19 pandemic situation encountered in China throughout FY2022 and the flood aftermath attributed to the Henan torrential deluge experienced in July 2021 (that had caused significant damage to the infrastructure in the Henan province, disrupting the manufacturing sector (with factories and warehouses being damaged) and leading to delays in production and supply chain disruptions), which adversely affected the growth and harvest of the agriculture produce of the Group in FY2022.

OPERATION REVIEW

Share Placement Exercise

The Group successfully completed a share placement exercise in FY2022 to raise a gross proceed of S$2,975,000 through the issuance of 70,000,000 new ordinary shares. The monies raised from the share placement, apart from strengthening the balance sheet of the Group, provides the Group with liquidity for its working capital needs and flexibility for the pursue of its growth strategies, particularly in respect of its new agricultural business, as well as for the exploration of new business opportunities as and when they arise.

Foray into the business of Supply Chain Management

To augment its new agriculture business, the Group had in FY2022 incorporated two entities, Henan Younong Future Supply Chain Management Co., Ltd. (河南优农未来供应 链管理有限公司) and Henan Xinyounong Supply Chain Management Co., Ltd. (河南鑫优农供应链管理有限公司), to specially cater to the growing demands of agriculture products via the online platforms.

MOVING FORWARD

China's economy is gradually recovering from the outbreak of the Covid-19 pandemic. Implementing policies to support businesses and stimulate economic growth, it has helped businesses to reopen and resume operations. Local businesses in China have had to adapt to the new normal brought about by the pandemic and embrace digital technology, such as online ordering and delivery services, to reach customers who prefer to stay at home. With the rise of people working from home remotely and online shopping, demands for technology-related products and services have also increased in tandem.

The Company has expanded its e-commerce capabilities to meet the growing demand for online shopping. The management expects the demand for its pomegranate products in China to increase markedly, driven by the growing awareness of the health benefits of the fruit. Pomegranates are a rich source of antioxidants, which help to reduce the risk of chronic diseases such as cancer and heart disease. Accordingly, the increased health-consciousness of Chinese consumers is likely to spur the demand for the Group's pomegranate and related products, including but not limited to pomegranate juice, concentrate, and extracts.

The Group will continue to adopt the following business strategies for expansion and growth in FY2023 and beyond:

  1. Through the adoption of an 'asset-light' business model to not take on any big-ticket capital expenditure or investment item;
  2. Through the diversification in the sale of products and produce (not restricted to pomegranate fruits alone), be it processed or otherwise, to be sourced from within the Group and/or through third parties;
  3. Through appropriate cost containment measures to curtail expenses without compromising efficiency; and
  4. Through active reach out for new business growth points, such as the establishment of supply chain management platforms or partnership with renown domestic e-commerce platform companies, to spur growth.

Barring any unforeseen circumstances, the Board is confident that the Group's performance for FY2023 will significantly outperform that of FY2022.

ACKNOWLEDGEMENTS

I hereby extend my deepest gratitude to both our management and staff for their unrelenting hard work, dedication, commitment and contributions. I would also like to express my heartfelt thank you to our partners, suppliers and customers for their unwavering support throughout the years. I am equally thankful to my fellow Directors for their invaluable guidance and contributions in helping the Group to overcome the many challenges over the past years.

Last but not least, I am profoundly grateful to you, our steadfast Shareholders, who stood firmly by us through the past years, and look forward to your continued support in making our shared dream come true in FY2023 and beyond.

Zhai Kebin
Chief Executive Officer and Executive Chairman

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