Our transportation and construction machinery leasing business comprises shipping, vehicle and construction machinery leasing.
We commenced the ship leasing business in 2008 and were one of the first leasing companies in the PRC to provid ship leasing business. We provide ship leasing services on a bareboat charter basis to ship operators under finance leases. We owned and leased 45 vessels, We strategical ly select high-technology and energy-saving mainstream ships as leased assets.In addition, we also provide leasing services for certain shipping related assets, such as shipbui lding equipment and containers.
As of June 30, 2019, there were a total of 68 ships under the existing management of the Group, including 44 bulk carriers (including 33 bulk carriers under construction and three bulk carriers to be delivered with deposit paid), 14 container carriers, five oil tankers, two liquefied natural gas (“LNG”) carriers, two dredgers and one liquefied petroleum gas (“LPG”) carrier.
As of June 30, 2019, the balance of assets in relation to ships of the Group amounted to RMB23,115.3 million, including RMB21,337.7 million for assets leased in relation to ships (comprising of the balance of finance lease of RMB12,095.7 million, the balance of operating lease of RMB5,705.6 million, the balance of prepayments of RMB3,536.4 million), and other related assets of RMB1,777.6 million.
In the first half of 2019, the Group recorded the following in the results of ship operating business:
1.The Group continued to promote major customer strategy, and further expanded cooperation with international leading quality customers in the segmented market, such as Cargill International, Oldendorff Carriers, Mediterranean Shipping Company, Jiangsu Shagang Group, etc.; 2. The Group set up several measures such as setting the minimum rental and fixing the rental of certain ships at floating rental stages using marketing instruments, to enable an augment in the profitability of the Company in ship operating lease business segment; 3. In the first half of the year, the Group successfully completed the delivery of 11 ships for operating lease, including 3 new ships and 8 second-hand ships. The time-chartered ships in service were in good operating and safe condition, and costs were effectively controlled, and operating efficiency of time- chartered ships reached 99%, and RIGHTSHIP4 ratings of all ships exceeded the requirement set out in lease, and all ships could satisfactorily perform the voyage tasks of charterers.
In the first half of 2019, following the principle of robust operation, the Group diversified cooperation channels with large and medium-sized manufacturers, strengthened cooperation with companies in the leasing industry, and balanced the business scale of commercial vehicles and passenger vehicles on a reasonable basis. In the meantime, gradual introduction of financial technology means based on big data, internet of things, artificial intelligence, etc., combined with traditional means of risk control, further enhanced the risk management capability of the passenger vehicle business, and promoted healthy development of the passenger vehicle business. In addition, adhering to strategic guidance, the Group implemented green development concept, actively promoted new energy vehicle leasing business, and materialised the sustainable development combining inclusive finance and green finance. As of June 30, 2019, the underlying assets of Vehicle Leasing business of the Group amounted to RMB5,521.8 million, representing an increase of RMB1,582.6 million or 40.2% as compared with that as at December 31, 2018, accounting for 11.7% of the segment assets of the Ship, Vehicle and Construction Machinery Leasing business.
In the first half of 2019, the Group deepened its strategic cooperation relationship with manufacturers. As of June 30, 2019, the underlying assets of Construction Machinery Leasing of the Group amounted to RMB18,642.9 million, representing an increase of RMB1,239.9 million or 7.1% as compared with that as at December 31, 2018, accounting for 39.4% of the segment assets of the Ship, Vehicle and Construction Machinery Leasing business. In the second half of 2019, the Group will increase its efforts in risk control, and maintain the asset quality level of construction machinery business. In addition to maintaining strategic cooperation with leading manufacturers in the industry, the Group will explore cooperation with medium- and small-sized manufacturers, in order to build a diversified customer system for construction machinery business and further improve the systematic and sustainable development capacity of the Group’s business.