China Zenix Auto International Limited Reports 2016 First Quarter Results

ZHANGZHOU, China, May 19, 2016 /PRNewswire/ -- China Zenix Auto International Limited (NYSE: ZX) ("Zenix Auto" or "the Company"), the largest commercial vehicle wheel manufacturer in China in both the aftermarket and OEM market by sales volume, today announced its unaudited financial results for the first quarter ended March 31, 2016.

Financial Highlights

First Quarter 2016:

• Revenue was RMB525.4 million (US$81.5 million) compared with RMB722.3 million in the first quarter of 2015;
• Gross margin was 19.1% up from 13.7% in the first quarter of 2015;
• Net loss and total comprehensive loss for the period was RMB2.9 million (US$0.5 million) with loss per American Depositary Share ("ADS") of RMB0.06 (US$0.01) compared with net profit and total comprehensive income of RMB0.8 million with earnings per ADS of RMB0.01 in the first quarter of 2015.

Mr. Junqiu Gao, Deputy CEO and Chief Sales and Marketing Officer of Zenix Auto, commented, "We continued to post improvement on our gross margin and generate sales of aluminum wheels. The recent growth momentum in the truck OEM market rekindled the industry confidence, which we believe that we will benefit eventually."

Mr. Martin Cheung, CFO of Zenix Auto, commented, "We continued to improve our balance sheet through stringent cost control and productivity management. We believe that our enhanced financial conditions will prepare us to capture opportunities and maintain our leadership in the Chinese wheel market."

2016 First Quarter Results

Revenue for the first quarter ended March 31, 2016 was RMB525.4 million (US$81.5 million) from RMB722.3 million for the first quarter of 2015. The decline in revenue on a year-over-year basis was mainly due to weak performance of our major OEM customers and weak aftermarket segment and international markets related to sluggish domestic and emerging market economies. The decline of total revenue was also attributable to the downward price adjustment in response to the lower raw material costs.

Aftermarket sales in China decreased by 28.0% year-over-year to RMB257.0 million (US$39.9 million) in the first quarter of 2016 from RMB357.2 million in the first quarter of 2015. Total unit sales in the aftermarket decreased by 19.4% year-over-year as a result of weak commercial vehicle transportation market.

Sales to the Chinese OEM market decreased by 23.3% year-over-year to RMB173.9 million (US$27.0 million) in the first quarter of 2016 compared to RMB226.5 million in the same quarter of 2015. Total unit sales in the OEM market decreased by 9.7% year-over-year during the first quarter of 2016. Our key OEM customers in the heavy-duty segment have recorded lower units of truck sales despite of an overall increase in unit sales in heavy duty truck market in the first quarter.

International sales decreased by 31.8% year-over-year to RMB94.5 million (US$14.7 million) in the first quarter of 2016 compared to sales of RMB138.6 million in the first quarter of 2015. Total unit sales in the international sales decreased by 24.3% year-over-year in the first quarter of 2016 mainly due to sluggish economies in Southeastern Asian countries including Thailand, Indonesia and Burma, which have weakened the demand from these markets.

In the first quarter of 2016, domestic aftermarket sales, domestic OEM sales and international sales contributed 48.9%, 33.1% and 18.0% of revenue, respectively.

Sales of tubed steel wheels comprised 54.8% of 2016 first quarter revenue compared to 57.2% in the same quarter in 2015. Tubeless steel wheel sales represented 38.2% of first quarter revenue compared to 38.0% in the same quarter of 2015. Tubed and tubeless steel wheel sales remain the main sources of revenue for the Company. However, sales of aluminum wheels increased and accounted for 2.9% first quarter revenue as compared to nil in the same quarter a year ago.

First quarter gross profit increased by 1.4% to RMB100.6 million (US$15.6 million), compared to RMB99.2 million in the same quarter in 2015. Gross margin was 19.1%, compared with 13.7% in the first quarter of 2015. The increase in gross margin on a year-over-year basis was mainly due to the decline of raw material cost.

Selling and distribution expenses decreased by 25.6% to RMB43.4 million (US$6.7 million) from RMB58.3 million in the first quarter of 2015. The decrease in selling and distribution costs was primarily due to the lower number of units shipped in the first quarter of 2016 compared with the same quarter last year. As a percentage of revenue, selling and distribution costs were 8.3% in the first quarter of 2016, compared to 8.1% in the same quarter a year ago.

Research and development ("R&D") expenses increased by 107.9% to RMB20.3 million (US$3.2 million), compared to RMB9.8 million in the first quarter of 2015. R&D as a percentage of revenue was 3.9% in the first quarter of 2016, compared to 1.4% in the same quarter a year ago.

Administrative expenses decreased slightly by 1.0% to RMB34.6 million (US$5.4 million) from RMB34.9 million in the first quarter of 2015. As a percentage of revenue, administrative expenses were 6.6%, compared to 4.8% of revenue in the first quarter of 2015.

Net loss and total comprehensive loss for the first quarter of 2016 were RMB2.9 million (US$0.5 million), compared to net income and total comprehensive income of RMB0.8 million in the same quarter of 2015. 

Basic and diluted loss per ADS in the first quarter of 2016 were RMB0.06 (US$0.01) compared to basic and diluted income per ADS of RMB0.01 in the same quarter of 2015.

In the first quarter of 2016, the Company recorded cash flows from operating activities of RMB78.6 million (US$12.2 million). Capital expenditures for the purchase of property, plant and equipment in the first quarter were RMB 5.2 million (US$0.8 million). Deposits paid for acquisition of property, plant and equipment in the first quarter were RMB2.5 million (US$0.4 million).

During the first quarter of 2016 and 2015, the weighted average number of ordinary shares was 206.5 million and the weighted average number of ADSs was 51.6 million.

As of March 31, 2016, Zenix Auto had bank balances and cash of RMB880.5 million (US$136.6 million) and fixed bank deposits with a maturity period over three months of RMB260.0 million (US$40.3 million). Total bank borrowings were RMB558.0 million (US$86.5 million). Total equity attributable to owners of the Company was RMB2,560.6 million (US$397.1 million).

Conference Call Information

The Company will host a conference call, to be simultaneously webcast, on Thursday, May 19, 2016 at 8:00 a.m. ET/ 8:00 p.m. Beijing Time. Interested parties may participate in the conference call by dialing +1-877-407-0782 (U.S. Toll Free) or +1-201-689-8567 (International). Please dial in five minutes before the call start time and ask to be connected to the "China Zenix Auto" conference call.

A replay will be available shortly after the conclusion of the conference call through June 19, 2016, at 11:59 p.m. ET. Interested parties may access the replay by dialing +1-877-660-6853 (U.S. Toll Free) or +1-201-612-7415 (International) and using Conference ID 13636877 to access the replay.

Exchange Rate Information

The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. All translations from RMB to U.S. dollars are made at a rate of RMB6.4480 to US$1.00, the effective noon buying rate as of March 31, 2016 in The City of New York, for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board. The percentages stated are calculated based on RMB amounts.

About China Zenix Auto International Limited

China Zenix Auto International Limited is the largest commercial vehicle wheel manufacturer in China in both the aftermarket and OEM market by sales volume. The Company offers more than 715 series of aluminum wheels, tubed steel wheels, tubeless steel wheels, and off-road steel wheels in the aftermarket and OEM markets in China and internationally. The Company's customers include large PRC commercial vehicle manufacturers, and it also exports products to over 80 distributors in more than 32 countries worldwide. With six large, strategically located manufacturing facilities in multiple regions across China, the Company has a designed annual production capacity of approximately 15.5 million units of steel and aluminum wheels as of March 31, 2016. For more information, please visit: www.zenixauto.com/en.

Safe Harbor

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. The Company may make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these risks is included in our filings with the SEC. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of the press release, and the Company undertakes no duty to update such information, except as required under applicable law. 

For more information, please contact

Investor Relations
Tel: +1-646-726-6511
Email:  [email protected]

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SOURCE China Zenix Auto International Limited

Related Links

http://www.zenixauto.com/en