Chairman's MessageLiu Ming
Executive Chairman and CEO
PERFORMANCE IN 2009
For the year ended 31 December 2009 (“FY2009”), Shanghai Turbo upheld the spirit of gaining trust as our first management philosophy. We explored our markets both in China and abroad. Our products were well received by our customers, and this has helped to boost turnover by 26% to RMB157million from RMB125 million in the previous year (FY2008). Correspondingly, gross profit for FY2009 increased by 42% to RMB34.24 million from RMB24.03 million in FY2008. To repay the shareholders’ long term support and subject to shareholders’ approval, the Board is proposing to pay dividends of RMB13.73 million. Despite the global financial turmoil, three key factors contributed to our steady performance growth in FY2009. Firstly, we enhanced our customer needs by providing continuous upgraded high-precision quality products. Secondly, we optimized products cost through selective material usage and more efficient production. Finally, our core competence has been strengthened, giving us a strategic advantage against our competitors.
MARKET PERSPECTIVE
According to a report of the international Energy Agency*, China will invest a total of nearly USD 2 trillion for electricity generation, transmission, and distribution over the next 30 years to meet rapidly growing electricity demand. Half of that investment will be used for power generation, while the other half will be used for power transmission and distribution. Currently, thermoelectricity comprises mostly power generating capacity in China. With the limited supply of fossil fuels for power generation, the Chinese government is encouraging alternative forms of power supply, such as hydropower, wind power and others. 2010 will be the year when the field of energy generation is greatly impacted by the financial crisis Whilst the domestic market is becoming stable, overseas markets are still depressed. In year 2010, with the economic recovery of China, macroeconomic controls and growing concerns to use “low-carbon economy” energy, the government will aggressively promote the use of low-emission and high efficiency power generation. We expect 30 million+ KV of steam turbine, gas-steam hybrid units and nuclear power generating units will be more widely applied, and the company’s effort in recent years in developing turbine blades for steam and nuclear-powered generators will bear fruit moving along with the new trend.
Outlook and Strategy
Owing to the rapid development of power generation facilities in the past five years, China has become the second largest country in terms of power generation and consumption in the world. The emerging power generation market in China has offered us more opportunities to grow our business and we have capitalized on this positive trend, amidst the global financial crisis, to deliver a satisfactory performance in FY2009. With the globalization of the electrical energy market and the increasing environmental demands, technology of gas turbines and nuclear power will become more important in the future. The company is looking at development of new blades for gas generator, nuclear application, aircraft engine and propeller and hopes to reach a broader market and new high in the industry. In recent years, the company has put in significant efforts in expanding overseas markets, as evident in our business performance. The company is in discussions with Japan’s Mitsubishi Heavy Industries, India’s BHEL, Germany’s MAN TURBO in 2010. To meet the stringent technical standards required by our customers, the company intends to upgrade the company’s manufacturing technology through purchase of advanced machinery. This will establish a solid foundation for further development of the company’s technical capabilities. Equally important, we enter the year 2010 with a stronger balance sheet. As the new man at the helm, I promise that we will maintain even stricter standards of discipline in operational and financial expenditure, and exercise greater diligence to achieve our goals. We will continue to preserve liquidity and reduce our overall cost structure to maintain our financial flexibility in the future.
ACKNOWLEDGEMENTS
On behalf of the Board, I would like to express my gratitude to our customers, business partners, my fellow directors and colleagues for your commitment and support. I would like to place on record my deep appreciation to our founder, the late Executive Chairman and CEO, Mr Liu San San who demised on 10 Jan 2010, for devoting his entire life to bring this company to where it is today. I would also like to thank our independent director, Mr Leong Siew Loon, who retired from the board after the Annual General Meeting in April 2009. Mr Leong has served the board since our listing and has provided valuable insights to the board. I would also like to welcome Ms Han Mei who has joined us as Non-executive and Non-independent Director on 11 May 2009 and Mr Zhou Xu who has joined us as Executive Director on 16 March 2010. The year ahead may be fraught with challenges but together, we will overcome them.
Liu Ming
Executive Chairman and CEO
