China Ceramics Co., Ltd. (CCCL) Half Year 2020 Earnings Conference Call September 29, 2020 8:00 AM ET Company Participants David Rudnick - Account Manager Jia Huang - Chairman and CEO Edmund Hen - CFO Conference Call Participants Operator Ladies and gentlemen, thank you for standing by and welcome to the China Ceramics First Half 2020 Earnings Conference Call. At this time, all participants are in listen only mode. [Operator Instructions] Please be advised that this conference is being recorded. I would n ...

China Ceramics Co., Ltd. (CCCL) Q4 2019 Results Conference Call May 20, 2020 8:00 AM ET Company Participants David Rudnick - IR Meishuang Huang - CEO Edmund Hen - CFO Conference Call Participants Howard Flinker - Flinker & Company Operator Ladies and gentlemen, thank you for standing by and welcome to the Second First Half and Fiscal Year ended 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. ...

Financial Performance - In 2019, China Ceramics reported revenues of RMB 327,581,000, a decrease of 34.3% from RMB 498,189,000 in 2018[23] - The company experienced a gross profit of RMB 81,326,000 in 2019, compared to a gross loss of RMB 1,166,000 in 2018[23] - Operating loss improved to RMB 24,081,000 in 2019 from a loss of RMB 346,620,000 in 2018[23] - The company reported a loss attributable to shareholders of RMB 9,501,000 in 2019, an improvement from a loss of RMB 418,674,000 in 2018[23] - For the full fiscal year 2019, revenue decreased by 34.2% compared to fiscal 2018, primarily due to a 27.0% decrease in sales volume amid a slowdown in China's economy[49] Assets and Liabilities - Total current assets decreased to RMB 362,248,000 in 2019 from RMB 366,895,000 in 2018, reflecting a decline of 1.8%[22] - Total liabilities decreased to RMB 89,390,000 in 2019 from RMB 90,923,000 in 2018, a reduction of 1.7%[22] - The company's cash and cash equivalents decreased to RMB 8,212,000 in 2019 from RMB 9,016,000 in 2018, a decline of 8.9%[22] Customer Dependence and Sales - The company is exposed to significant risks from a limited number of customers, with the five largest customers accounting for 43.3% of total revenue in 2019[29] - In October 2019, the company decreased the pricing of its ceramic tile products by an average of 15%, leading to a 26% increase in sales volume for the second half of 2019 compared to the same period in 2018[49] Production Capacity - The company's production facilities have an aggregate annual maximum production capacity of approximately 51.6 million square meters, but only 12.42 million square meters were utilized as of fiscal year end 2019[48] Market and Competition - The company faces intense competition in the ceramics industry, which may negatively impact its market share and pricing[42] - The company’s business is significantly affected by the property development and construction industries in the PRC, and any recession in these sectors may adversely impact demand for its products[55] - Approximately 94% of the company's revenue in each of the last three fiscal years was derived from the PRC market[64] Labor and Costs - Labor costs in the PRC have been increasing, which may affect production costs and profit margins[57] - The company relies on skilled and unskilled labor, and any deficiency could result in reduced profits[56] Regulatory and Compliance Risks - The company is subject to risks related to the interpretation and implementation of PRC laws, which may change unpredictably[65] - Changes in PRC laws and regulations may require additional approvals and could adversely affect financial performance[66] - The introduction of new laws or changes to existing laws by the PRC government may adversely affect business operations[74] - The company may face penalties if found in violation of the Foreign Corrupt Practices Act or Chinese anti-corruption laws[58] Financial Reporting and Investor Confidence - The inability of the PCAOB to conduct inspections in China may lead to investor uncertainty regarding the quality of financial statements[60] - The company's auditor is not currently inspected by the PCAOB, which may affect investor confidence in reported financial information[60] - The company has been subject to scrutiny regarding financial and accounting irregularities, which could harm its business operations and stock price[85] Taxation and Foreign Exchange - If the PRC tax authorities classify the company as a "resident enterprise," it may be subject to a 25% enterprise income tax on worldwide taxable income[94] - The PRC foreign exchange control may limit the company's ability to utilize profits effectively and receive dividends[69] - Fluctuations in exchange rates between the U.S. dollar and Renminbi could adversely affect the company's financial results and share value[100] - Limited hedging options are available in China to mitigate foreign currency exchange risk, and the company has not engaged in hedging transactions to date[102] Shareholder Matters - The trading price of the company's shares has ranged between $36.32 and $0.27 per share since the completion of the business combination through May 12, 2020[86] - The company has not paid dividends since January 2015 and does not plan to do so in the near future, meaning shareholder returns will depend solely on share price appreciation[111] - Under British Virgin Islands law, the company can only pay dividends if its assets exceed liabilities and it can meet its debts as they come due, with no assurance of future dividends[112] - The British Virgin Islands law may provide limited protections for minority shareholders compared to U.S. law, affecting shareholder recourse options[104] Environmental and Compliance Costs - The company is currently in the process of applying for a Pollutant Discharge Permit, which, if not issued, could result in warnings, orders to stop discharging pollutants, and/or fines[81] - The company is subject to evolving environmental, health, and safety laws in the PRC, which could impose additional compliance costs and liabilities[78]

China Ceramics Co., Ltd. (CCCL) Q2 2019 Results Conference Call September 25, 2019 8:00 AM ET Company Participants David Rudnick - IR Meishuang Huang - CEO Edmund Hen - CFO Conference Call Participants Howard Flinker - Flinker & Company Operator Ladies and gentlemen, thank you for standing by and welcome to the China Ceramics First Half of 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Ope ...

Financial Performance - In 2018, China Ceramics reported revenues of RMB 498,189,000, a decrease of 39.3% from RMB 821,792,000 in 2017[19] - The company experienced a gross loss of RMB 1,166,000 in 2018, compared to a gross profit of RMB 50,354,000 in 2017[19] - Operating loss increased to RMB 346,620,000 in 2018 from RMB 50,635,000 in 2017, indicating a significant decline in operational performance[19] - Total assets decreased to RMB 366,941,000 in 2018, down from RMB 825,418,000 in 2017, reflecting a reduction of 55.6%[18] - Total equity fell to RMB 276,018,000 in 2018, a decline of 60.3% from RMB 694,736,000 in 2017[18] Customer Dependence - The company’s five largest customers accounted for 96.7% of total revenue in 2018, highlighting a significant reliance on a limited customer base[23] Cash Flow and Receivables - Trade receivable turnover increased to 233 days in 2018, up from 206 days in 2017, indicating potential cash flow challenges[24] Cost Structure - The cost of raw materials accounted for approximately 61.6% of total cost of sales in 2018, with fluctuations in prices impacting profitability[26] Risk Management - The company has not purchased product liability insurance, exposing it to potential financial risks from product defects[33] - Management continuity is critical, as the CEO has been with the company since its founding, and any loss of key personnel could adversely affect revenues and profits[30] Production Capacity - The company's production facilities have an aggregate annual maximum production capacity of approximately 56.5 million square meters, but currently, only 16.9 million square meters are being utilized due to reduced demand[40] - The company is currently operating its facilities at significantly less than maximum capacity, which could reduce profitability[39] Market Conditions - The company has faced a contraction in demand for its products due to decelerating economic growth in China, particularly in the real estate and construction sectors[39] - In July 2018, the company decreased the pricing of ceramic tile products by an average of 10%, but this did not offset the decline in sales volume[41] - The PRC government has introduced measures to regulate the real estate market, which could negatively impact the company's business in the future[49] Legal and Regulatory Environment - The company has filed trademarks for its brands in the PRC, but there is no assurance that these intellectual property rights will be adequately protected[43] - The PRC legal system is still evolving, leading to potential uncertainties in compliance with laws and regulations that may adversely affect the company's operations[73] - The company is subject to environmental, health, and safety laws that could impose material liabilities and require additional compliance costs[77] - Changes in PRC laws and regulations may require the company to obtain additional approvals and licenses, potentially increasing operational costs[63] Financial Obligations and Liabilities - The company incurred a one-time charge of approximately RMB 5.6 million ($0.9 million) due to a mandated change in fuel source from coal to natural gas[78] - The company collectively owns several buildings with a total construction area of 29,120.83 square meters, which may limit its rights to use, renovate, or dispose of these buildings[80] Foreign Exchange and Taxation - The company recorded a realized and unrealized loss of RMB 54,977,000 in 2014 due to fluctuations in the Renminbi against the U.S. dollar, highlighting significant foreign currency risk exposure[602] - The company does not currently have significant foreign exchange exposure as its sales and purchases are predominantly denominated in RMB, but future expansion may introduce exchange rate risks[606] - If classified as a "resident enterprise" under the PRC Enterprise Income Tax Law, the company may face a 25% tax on worldwide taxable income[100] - The company may be subject to a 10% PRC withholding tax on dividends paid to non-resident investors if deemed a "resident enterprise"[103] Shareholder Considerations - The company has not paid dividends since January 2015 and does not plan to do so in the near future, meaning shareholder returns will depend on share price appreciation[125] - The market price of the company's shares has been highly volatile, influenced by factors such as quarterly operating results and changes in financial estimates by analysts[122] - The company's shares could be volatile, impacting shareholders' ability to sell their holdings at desired prices[89] Future Capital Needs - The company may require additional capital in the future, which could lead to dilution of existing shareholders if additional equity or debt securities are issued[127] Compliance Challenges - The company may face challenges related to compliance with Circular 698 and Public Notice 7 regarding taxation of indirect transfers, which could adversely affect its financial condition[104] - The company has limited ability to assert and collect on claims in litigation due to Chinese secrecy laws, which could hinder legal proceedings[84] - The company may incur significant costs if subjected to scrutiny involving U.S.-listed Chinese companies, potentially harming its business operations and stock price[87]