China Wood Optimization (Holding) Limited announced its results for the FY year ended 31 December 2017 with overall gross profit margin and net profit margin up substantially by 30.7 percentage points to around 60.6% and 9.3 percentage points to about 23.7% respectively (2016: 29.9% and 14.4%).
The significant growth in margins was owed to the Group’s effort to strategically transform its business model, placing emphasis on providing Wood Processing Procedure Service that uses the Group’s proprietary impregnation fluid made with biological synthetic resin technologies on less-shaved Processed Wood Panels. As the Service markedly raises the marketing value of poplar wood panels, it has been well received and is in high demand in the market.
For the year ended 31 December 2017, China Wood’s revenue was RMB238.3 million ($30.5 million), compared to RMB486.5 million ($62.4 million) in 2016. The decrease was mainly attributable to its strategic shift in business focus to providing more Wood Processing Procedure Services instead of on selling Processed Wood Panels, which resulted in a drop in sales of Processed Wood Panels. In offering the Wood Processing Procedure Service, since the raw wood panels are provided by customers and the Group only charges a processing fee, revenue from this service is relatively less than that from selling processed wood products to customers.
Nonetheless, as the business only requires a very small budget for cash flow and minimal inventory management, hence for the year under review, the Group recorded gross profit and net profit of RMB144.4 million ($18.5 million) and RMB56.4 million ($7.2 million) respectively.
China Wood Optimization (Holding) Limited is principally engaged in the processing, manufacturing and sales of processed wood products, as well as providing a Wood Processing Procedure Service for customers with a self-developed wood processing procedure and a self-developed impregnation fluid.
