Zhongyuan Expresswa Shows Alarming Debt Rate In Fy20 and 1Q21 Results

Who the company is:

Henan Zhongyuan Expressway Co. Ltd. [600020:CH] is a Chinese based industrial company that focuses mainly in operating an expressway businesses. The business activities of the company involve the provision of toll highway investment, construction, and maintenance services. The company also engages in other businesses such as real estate development, oil distribution, and technology service businesses. The company conducts its business activities within the Chinese domestic regions with no involvement in the oversea regions. Zhongyuan Expressway started its business and was issued a business license in December 2000 while its headquarter is situated at Zhengzhou, China. The executive leader of the company is Chenzhong Ma with up to 3,110 other employees currently working for the company.

The previous annual financial performances:

The financial performance results that are been showcased by the company covering period of five to ten years show some consistent and steady growth in most major financial indicators across each of the report. The consistent and steady positive improvements are vastly attributed to the increase in the need for expressway toll road service which are been offered by the company. Another business specialty that has been fostering the revenue generated from business by the company is the real estate development business which generates up to 35% of the total income realized by the company. From the most recent annual financial report (FY20) reported by the company, most of the major financial indicators was seen to be on a serious negative turn over due to the increase in the number of companies operating in the business specialty. Making references to the financial data that was showcased by reuters, some the Fy20’s financial indicators was analyzed as follows;

Total income: The financial result of the Fy20 period highlighted that the total income generated from business significantly fell to CNY5.07 billion which shows that it decreased by 20.05% year-on-year when compared and analyzed from the CNY6.38 billion that was reported in the previous year’s financial data.

Net profit: The financial data of the company targeting the net profit reported by the company during the Fy20 period also showed that it strongly reduced to CNY1.53 billion which shows that it decreased by 54.73% year-on-year when compared and analyzed from the CNY3.38 billion that was reported in the previous year’s financial data. The expenses of the company been incurred during business activities accounts to about 50% of the total income generated from business during that period.

Alarming Debt Rate in Fy20 and 1Q21

The financial result of the company for the Fy20 and 1Q21 periods revealed strong and alarming increments recorded in the total debt accumulated by the company over those periods. The reports stated that the total debt accumulated by the company vastly increased to CNY31.61 billion and CNY32.54 billion in Fy20 and 1Q21 respectively.

Sources:

https://www.marketscreener.com/quote/stock/HENAN-ZHONGYUAN-EXPRESSWA-6548921/company/

https://www.reuters.com/companies/600020ta.SS/financials/balance-sheet-quarterly

https://www.reuters.com/companies/600020ta.SS/financials/income-statement-annual

https://www.bloomberg.com/profile/company/600020:CH