A N N U a L R E P O R T 2 0
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Annual Report 2001 The cover design speaks of progress and diversity as a result of chiseling at and refining our ability to adapt to immense challenges with confidence and to cope with continual changes. 01 Contents 02 Chairman’s Statement 08 Management Discussion and Analysis 12 Corporate Information 15 Directors and Senior Management Profile 18 Corporate Structure 20 Corporate Activities 24 Financial Reports Enclosures: Circular on Mandates to Issue and Repurchase Shares 01 Notice of Annual General Meeting 07 Form of Proxy annual report 2001 02 Tan Chong International Limited Chairman’s Statement 03 Turnover by Turnover Business Type Earnings Per Share In thousands of HK dollars Year 2001 In HK dollars 0.159 0.144 5,012,123 4,969,606 0.092 Motor Vehicle Distribution 91% 3,019,255 Heavy Commercial and Indl 6% Equipment Distribution Properties Rental 1% Others 2% 1999 2000 2001 1999 2000 2001 Motor division in Singapore repeated its best selling performance by gaining 5.9% year on year with Sunny and Cefiro models improving by 32.6% and 15.6% respectively. annual report 2001 04 Tan Chong International Limited Chairman’s Statement pix from left to right: Results Nissan to 25.6%. Our light commercial Nissan Sunny vehicle sales saw volume declined by 39% A volume seller in Singapore, it The Group’s strong revenue growth in the very much in line with the reduction of COE has increased its market share by beginning of the year lost much of its supply. Still, at 2,231 units, it occupied the 32.6% year on year. momentum in the later half when the global largest market share. Nissan Cefiro 2.0 economy took a sharp reversal particularly The best seller in its class in Singapore it is powered by a V6 in Singapore. Nevertheless, despite 4% Subaru sales in Singapore again improved engine that gives a smooth, silent performance. weakening of the SGD against HKD revenues with a rise of 27% demonstrating the reached HKD 5,021 million comparable with strength of the brand with its unique all- Inside the Nissan Sunny HKD 5,057 million last year. Adjusting for the wheel-drive technology. Hong Kong made Luxurious leather and walnut centre-console and side rests in exceptional item in the disposal of Wilby sales gain of 11% in a flat market. The Subaru the luxury edition add to comfort Residence in 2000, comparable profit model lineup for Hong Kong and Singapore and class. attributable to shareholders increased by has now completed the transition to 10.7% in spite of further provisions for the marketing only all-wheel-drive vehicles. diminution in investment properties values. Heavy Commercial and Industrial Vehicle Sales Equipment Motor division in Singapore repeated its best The slow down experienced in the first half selling performance by gaining 5.9% over the of the year carried well into the second half previous year’s unit sales. In Singapore, resulting in a year-on-year reduced volume Nissan passenger vehicles continued to of sales by some 30% and 28% for trucks and increase market share with Sunny and Cefiro forklifts respectively. The foreseeable models improving by 32.6% and 15.6% economic restructuring in Singapore into a respectively over 2000. The robust Sunny and more service rather than manufacturing base Cefiro sales helped lift market share for will have significant long-term implications 05 Chairman’s Statement for the division. Whilst still profitable, the Our freehold residential development at pix from left to right: division plans to move decisively into regional Upper Aljunied is to press ahead and we have Nissan Forklift expansion and enlarge product lines. In this awarded the piling contract. We will be in a A staple in our industrial machinery division its revenue is respect, the Division now has offices in position to call for main contract works in the derived both from new as well as Vietnam, and also a Shanghai office for new year. rental sales. Nissan Forklift distribution. Nissan X-Trail The construction of our new showroom / The introduction of this Sports Utility Vehicle that is equipped The industrial machinery division in workshop complex at Jalan Ubi is underway with Nissan’s specially developed Singapore has also been given the rights to and on schedule for completion in 2003. This “A ll Mode 4x4” system in Singapore has won many fans. distribute Renault VI range of trucks. This development will add capacity for sales and Renault VI range that is in the heavy tonnage service to Nissan customers in Singapore category will complement its existing product where there is now a pressing need as our line. sales expand. Property Development Trading In spite of general weakness in the Singapore Tyre Pacific Hong Kong Limited, our Dunlop economy particularly in the second half, tyre distribution company in Hong Kong had revenues from property rentals (excluding another profitable year. We have also started Wilby Residence) increased by 11.2%. the distribution of locally manufactured However the weakening occupancy in the Dunlop motorcycle tyres in China. As part of latter half is indicative of difficulties to come the promotion strategy, we have set up a but would be an opportune time to refurbish dedicated motorcycle tyre display showroom the apartments and reposition the division in Guangzhou complementing our general for an expected improvement in the future. tyre display center in Shanghai. These centers will spearhead the dissemination of annual report 2001 06 Tan Chong International Limited Chairman’s Statement pix from left to right: information on the advance types and for the rate at which existing cars are Nissan Cabstar technology of Dunlop. scrapped. The quota for commercial vehicles A favourite with the commercial after last year’s reduction could possibly see vehicle buyers in Singapore, this best seller is a combination of During the year we have acquired another an increase in COE supply in the new year. comfort and practicality. 12% of the Guizhou JV Company making us a 24% shareholder in the manufacturing of As ever, service to customer will become more ISO 9001 standard Our two seat plants in Wuxi and Yun Que cars. This strengthening relationship important and we have to constantly improve Xiamen in China that produce with the Guizhou JV puts us in a position to and refine our practice and facilities. The quality seats were awarded the ISO 9001 standard. be their OEM seat supplier from our factory Group is in a good position to provide facility in Jiangyin. The Xiamen seat premium service with our existing internet Car servicing company in Thailand manufacturing JV with Golden Dragon Bus web-based customer interface which has The centre that has 40 work bays Co continued to be profitable and expansion been progressively developed over the past and is equipped with spray- painting booths and oven facilities plans are being considered to match the few years. With our expanded sales last year complements the Subaru car distribution business. demand of the market. Our JV Dongfeng in Singapore, we have taken measures to Nissan Diesel made a maiden profit during strengthen the service levels for our car the year stemming previous years of losses. owners by adding service points and retail Increasing localization of parts has reduced and showroom premises. We have also cost and better market awareness of the introduced computerized spare parts quality allowed the company to sell its warehousing at our Toa Payoh facility that products with improved margins. will enable faster retrieval and dispatch of parts to customers. Future Last year, South East Asia has been battered by slow economic growth. This has Total vehicle demand predicated by the intensified the urgency to look for new Vehicle Quota System in Singapore will likely revenue streams. In this regard, the Group is sustain at current levels but to be adjusted considering the People’s Republic of China 07 Chairman’s Statement as a logical area for us to expand. This is an than ever and I appeal to all the staff to pix from left to right: area that in the past few years saw average remain resolute in their effort and united in Best Station Wagon in Hong Kong growth of 7-8% and whose entry into WTO engaging the challenges to come. The Subaru Legacy GTB was given undoubtedly offers tremendous opportunity. the Best Station Wagon award by an independent motor car journal Our experience in certain industries makes in Hong Kong. PRC an important place where expansion can Dato’ Tan Kim Hor DPMS KMN JP achieve synergies. Chairman Subaru Impreza WRX The All Wheel Drive technology of 14 March 2002 this nifty and sporty car has made good inroads in the sports car niche market in both Singapore Dividend and Hong Kong. Best Sports Sedan in The Board of Directors is pleased to make a Hong Kong recommendation for a final dividend The Subaru WRX Sti was awarded the Best Sports Sedan by yet payment of 3.5 cents per share. This dividend another independent motor car payment together with the 1.5 cents paid for journal in Hong Kong. the interim total 5.0 cents for the year compared with the 4.5 cents for the preceding year. Appreciation I would like to extend my appreciation to all staff for their contributions during a difficult year. The Group performance has remained strong through their dedicated efforts. The year ahead is fraught with more uncertainties annual report 2001 08 Tan Chong International Limited Profit Before Tax & Minority Interests Net Cash Dividends Declared (excludes Wilby) In thousands of HK dollars In HK dollars In thousands of HK dollars 438,489 436,336 786,978 0.050 0.045 0.040 263,134 429,273 324,819 1999 2000 2001 1999 2000 2001 1999 2000 2001 Group units sales volume increased by 5% but major events that unfolded in the year and the impact of economic slow down in various countries have affected both sales volume and margins in most industries.