Net Profit of Ozner Water for 2016 Significantly Increases by 7 Times; Installation Base Increased by 36.8% and Services System Covered over 1,300 Cities and Counties Nationwide

HONG KONG--()--Highlights

  • Revenue of the Ozner increased 23.5% to approximately RMB920.8 million
  • Gross profit increased 14.4% to approximately RMB502.1 million
  • The growth in revenue and gross profits was mainly attributed to the healthy development of the Group’s water purification business
  • Profit attributable to owners of the parent significantly increased by 7 times to RMB229.2million
  • As of 31 December 2016, Ozner’s self-operated services system covered over 1300 cities, counties and townships nationwide
  • The number of new water purification machines increased by approximately 340,000 units. Installation base increased to approximately 1.27 million units, increased by 36.8%

Financial Highlights

  Year ended 31 December
RMB ‘000   2016   2015   Change
Revenue 920,766   745,399   +23.5%
Gross Profit 502,093 438,945 +14.4%
Profit for the year attributable to owners of the parent 229,193 28,061 +716.8%
*Adjusted profit for the years 172,813 143,072 +20.8%
Gross profit margin 54.5% 58.9% -4.4ppt
Net profit margin 24.8% 3.8% +21ppt
Basic earnings per share (RMB cents) 13.31 1.61 +726.75%

* Non-IFRS, adjusted profit for the year was derived from the profit for the year excluding share-based payments, and fair value gains/(losses) on derivative component of convertible bonds, expenditures incurred for handling of the unfound allegations, amortised costs of liability component of convertible bonds and finance cost in relation to derivative component of convertible bonds.

 

Ozner Water International Holding Limited (“Ozner Water” or “the Company”, HKEx stock code:2014) and its subsidiaries (“Ozner”)announced its annual results for the year ended 31 March 2016. During the year, Ozner recorded revenue of approximately RMB920.8 million (2015: approximately RMB745.4 million), representing an increase of 23.5% as compared with the year ended 31 December 2015. Gross profit recorded approximately RMB502.1 million (2015: approximately RMB438.9 million), representing an increase of 14.4%. The growth in revenue and gross profits was mainly attributed to the healthy development of the Group’s water purification business.

Profit for the period attributable to owners of the parent significantly increased by approximately 7 times to RMB229.2 million (2015: approximately RMB28.1 million). During the Reporting Period, earnings per share were RMB13.31 cents (2015: RMB1.61 cents).

Business Review

In 2016, through the expansion of our distributor network and the engagement with new corporate customers such as hospitals and medium to large chain enterprises, we have further consolidated our leadership in the corporate water purifier market. As for the development of household purifiers, we continue to leverage the online to the offline and offline to online interactive platform and operation team with iFamily APP as the core, and gained access to the vast number of employees of our corporate end users and other resources such as “smart products”, “public non-profit water bars”, “experience stores” and “brand collaboration” through Internet and social networks such as mobile applications and public WeChat account. The “experience+word-of-mouth” brand building and promotion marketing strategy helped us to rapidly develop a customer base of household purifiers, and the result was encouraging. The buy-out type of household purifiers increased 183.6% to approximately 241,000 purifiers as of 31 December 2016, the accumulated installation base of Ozner was approximately 1.27 million units.

The Group also further diversified its product mix during the year. Beside launching smart peripherals to realize the strategy of market education and channelization, we will also introduce more models of the buy-out type of household water purifiers in 2017 to provide users who pursue a high-quality healthy lifestyle with more choices.

During the year, the services system, one of Ozner’s sustainability pillars, was also further developed. As of 31 December 2016, our self-operated services system covered over 1,300 cities, counties and townships nationwide to provide Ozner’s users with highly efficient and quality installation and aftersales service.

Looking forward into 2017, we are determined to intensively increase our market share in the water purifier market with the following strategies and initiatives, and further engage in the air sanitization market to provide consumers with more choices for quality products and to create greater values for the shareholders of the Company.

Solidify and expand customer base to lay down profit model based on repeated consumption of service

Ozner service platform, as the core of the business model, provides product planning, business operation, branding and marketing services to business groups of public water purification, household water purification and strategic partnership, and post-sales services to their respective end users. Through such services provided by the platform, we are poised to solidify and expand customer base and improve customer stickiness, therefore achieving repeated consumption of Ozner product and services and establishment of sustainable profit model.

Products and technologies as our core competence

Fueled by China’s policy of stabilizing growth, as an industry-leading enterprise in commercial water purification, we firmly and effectively grasped the opportunities brought forward by the exponential growth of water purification industry in China, successfully utilizing its influence in commercial market and realizing rapid development of the household market. With the completion of several technology strategies, quite a number of patents were granted with regard to ground-breaking applications of smart technology. Service network’s coverage area drastically increased compared to 2015. In addition, our brands and products won recognition from different parties. In 2016, we won different awards which embody our pursuit of “Just For Safe Water”. It will also compel us to continue to enhance our technology and innovate.

Reforming management system and moving forward with streamlined organization

We refined our employee incentive program and encouraged teams meeting satisfactory sales target to continue to excel. In the past year, we reformed our internal management system. We also implemented our personnel change program and engaged in the establishment of a talent and management system, which were of the largest scale since the establishment of the Company, covering such key dimensions of the Group as sales and marketing architect, capital market, technology R&D, production and service. Based on the principle of management optimization, we in total made adjustments with regard to more than 70 middle and senior management positions including Deputy Managing Director, General Manager of business division, Director of different functional departments. It is by virtue of such institutional construction that we secured good results in 2016 and laid favorable conditions for rapid development in future.

Vertical expansion and saturation attack

Going forward, Ozner will adopt the market strategy of vertical expansion and saturation attack. On organizational structure adjustment, we will push ahead the construction of household water purification business sector and probe the household water purification market the value of which is in the magnitude of RMB100 billion, seeking to advance our business in both household and public water purification. Concurrently, we will improve our air purification technology so that together with our aforementioned efforts in public and household water purification business, our core competitiveness can be enhanced. We will also push ahead the exporting of business services, technologies, products and capital, which are peripheral scopes to our core undertaking. As far as business deployment is concerned, we will have in place 2 main categories namely public products and household products and we will continually execute market segmentation and product function segmentation in the respective categories.

FUTURE PROSPECTS

Looking forward into 2017, we are fully confident and motivated. It will be a critical year for the positioning and building of our brand and channels, and for Ozner to solidify its market share and to take the lead in the industry, which will lay a sound foundation for our sustainable growth in the future. We will push forward our development strategies to create greater value for our Shareholders as well as the society.

About Ozner Water International Limited

OZNER’s two business lines include water purification and air purification. Different from the traditional one-time sales mode, Ozner Water adopted a revolutionary business model, which provides water purification service while charging annual rental, providing a unique advantage in the market. The Group’s self-operated services system covered over 1,300 cities, counties and townships nationwide, and constructed relevant logistics and warehousing facilities to ensure efficient service and high renewal rate. Ozner Water originates the “cloud water purification technology”, which enables the Group to remotely manage the water purifiers by mobile phone network. This technology reminds customers and the after-sale staff the issues of purifier’s filter expiration and purifier failure. In addition, the Company uses CRM system in its customer service center in headquarter to maintain customer relationship and convey customers’ need timely, while Ozner Water’s air purification dedicates to provide solutions and services in the field of healthcare, foods and electronics.

Contacts

Stimulus Investor Relations Ltd.
Ms. Hill Ho, +852-3159-2944
hill.ho@stimulus-ir.com
or
Mr. Michael Yeung, +852-3159-2994
michael.yeung@stimulus-ir.com

Contacts

Stimulus Investor Relations Ltd.
Ms. Hill Ho, +852-3159-2944
hill.ho@stimulus-ir.com
or
Mr. Michael Yeung, +852-3159-2994
michael.yeung@stimulus-ir.com