Sheen Tai Holdings Group Company Limited (the “Company” or “Sheentai”) and together with its subsidiaries (the “Group”) is originally a packaging materials manufacturer and property developer in the People’s Republic of China (the “PRC”). Since the listing of the shares of the Company The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) in 2012, the Group has been making significant effort in expanding the Group’s cigarette paper box business. The Group had explored new market for the cigarette paper box business and attempted to increase its market share in cigarette paper box business. However, the Group has weakness in terms of economies of scale in the cost of production when compared to other competitor. The Group faced difficulty in expanding its cigarette paper box business in this competitive market. To achieve sustainable growth, the Group disposed of its equity interest in its cigarette paper box business and strives to diversify its business by focusing on the photovoltaic power sector and capturing related opportunities after considering the development and the expected return from investment in the photovoltaic industry in the PRC in the foreseeable future. The Group is leveraging its existing advantage and is embarking on business transformation with the aim to seize the development opportunities in the industry emerging from favorable policies and ultimately achieve rapid growth.
After the disposal of the cigarette paper box business and entering of the photovoltaic power industry, the Group has reclassified its existing business into four categories, namely, (i) manufacturing and sales of packaging materials (comprising anti-counterfeiting films, other cigarette film and non-cigarette-related films), (ii) trading, (iii) development of properties, and (iv) generation of photovoltaic power. During the six months ended 30 June 2015, the Group had made sales to (i) cigarette manufacturers; (ii) other customers of cigarette films; and (iii) customers of non-cigarette-related packaging materials. No sale has been recorded for sales of properties and photovoltaic power for the period.
The Group has two factories located in (i) Huai’an City in Jiangsu Province, accommodating production facilities for the printing and manufacturing of anti-counterfeiting films: and (ii) Qingdao City in Shandong Province, accommodating production facilities for the manufacturing of BOPP films. The site for property development is located in Xuzhou, Jiangsu, the PRC and is expected to generate profit in early 2017. The Group has a photovoltaic power station under construction located in Xuzhou in Jiangsu Province, which is expected to commence generation of photovoltaic power before the end of 2015. In April 2015, the Group has entered into an agreement with TBEA Xinjiang New Energy Company Limited to acquire the equity interests of two photovoltaic power companies located in Mu Lei and Kelamayi upon the two photovoltaic companies having achieved ongrid connection and commenced power generation. The transactions are expected to be completed before the end of 2015. To oversee the operation of the new photovoltaic power business, the Group has reviewed and enhanced the existing human resources by employing personnel with relevant experiences.
For the three years ended 31 December 2014, we generated turnover of approximately HK$699.6 million, HK$706.1 million and HK$712.5 million respectively, representing a CAGR of approximately 10% over the period. During the same period, profit attributable to equity shareholders of our Company were approximately HK$70.1 million, HK$77.9 million and HK$92.5 million respectively, representing a CAGR of approximately 15% over the period. By leveraging on our strengths and effectively implementing our business strategies, our Directors believe that we can continue to effectively expand our business both in terms of turnover and profitability.