Prospects

Prospects

While oil prices are expected to remain stable this year, with the economy uncertainty and consumption sentiment weak, the management is cautiously optimistic about the Group’s development prospects. The Group will keep implementing set development strategies, focusing on developing high value-added products with higher margin and strictly selecting well-reputed customers, plus resorting actively to different flexible financing channels including onshore guarantee for offshore loan, cross–border capital arrangement to counter the adverse external environment and lower overall financing costs. It will also manage inventory carefully to help increase overall profitability.

The Group believes its top quality products will allow it to stand out against its peers and gain the recognition of international brands, hence maintain relatively strong product price bargaining power. The rigid demand for products in China still has huge growth potential, which will enable the Group to develop its business in steady strides. Heeding that, the Group has corresponding development strategy in place, entailing effort to actively pursue opportunities to negotiate with international brands on cooperation and stepping up expansion of the domestic market with a focus on products of rigid demand and with higher profit margin. In addition, the Group will also effectively apply its strong R&D capability to explore and produce products with market potential including medical application products, as well as create new product categories and markets. During the year, the Group discussed with other R&D organisations about cooperation in developing new colorant products. At the same time, it will keep exploring, referring to and bringing in dye-related production technologies from regions other than Europe, the US and Japan, with the aim of diversifying its business to cover other profit-promising sectors.

On the cost control front, although there are uncertainties bearing on its business including volatile oil prices and exchange rates, and constantly rising labour costs, the Group will, as always, implement its robust business strategies, exercise prudence in financial management to effectively control production costs and adopt suitable methods to manage foreign exchange risk, making every effort to achieve its long-term sustainable development. The Group is certain that, led by its professional management team with years of experience in the industry, it will be able overcome different challenges and dedicate efforts to explore and effectively evaluate every business opportunity, thus ultimately generate the greatest returns for shareholders