CN Logistics International Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code：2130.HK)

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Announces 2020 Annual Results

Revenue Increased by 36.2% to Approximately HK$2,020.6 Million

Adjusted Net Profit Surged by 152.3% to HK$ 81.0 Million

Further Consolidated its Leading Position as

An International Logistic Solution Provider for High-end and Luxury Brands
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Financial Highlights

?HK$ '000	For the year ended 31 December
?	2019	2020	Change
Revenue	1,483,849	2,020,562	+36.2%
Gross Profit	306,788	394,308	+28.5%
Profit attributable to equity shareholders	23,614	55,521	+135.1%
Adjusted net profit attributable to equity shareholders	32,064	81,013	+152.3%
Gross profit margin	20.7%	19.5%	-1.2p.p.
Net profit margin	3.0%	4.1%	+1.1p.p.
Adjusted net profit margin	3.6%	5.3%	+1.7p.p.
Proposed dividend per ordinary share (HK Cents)	N/A	15	N/A
Dividend payout ratio	N/A	36.4%	N/A
Return on equity	11.8%	18.3%	+6.5p.p.

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( 29 March 2021 - Hong Kong ) CN Logistics International Holdings Limited ("CN Logistics", and together with its subsidiaries, the "Group;" stock code: 2130) is pleased to announce the audited consolidated results for the year ended 31 December 2020 ( the "Year").

Year 2020 was a challenging yet fruitful year for CN Logistics. On 15 October, CN Logistics was successfully listed on the Main Board of the Stock Exchange of Hong Kong, which has opened new opportunities for the Group while has also elevated its brand value to another level. On the other hand, due to the outbreak of COVID-19, global logistics services and cargo space supply was greatly disrupted in 2020. Leveraged on its global logistics network, solid relationships with freight providers and well-established system, the Group was able to secure cargo spaces and provide quality distribution services for our valued customers in helping them to maintain undisrupted business operation. Furthermore, the Group was also able to provide urgent air freight forwarding services to high-end fashion customers for delivering hygiene products such as masks. These opportunities allowed the Group to reinforcing the relationship with customers, which in turn solidify our status as brand owners' logistics services partner.

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The Group has achieved a set of outstanding results amid the challenging operating environment in 2020. Revenue and net profit of the Group recorded significant growth despite the outbreak of COVID-19. For the Year, the Group recorded revenue of approximately HK$2,020.6 million (2019: HK$1,483.8 million), representing an increase of approximately 36.2%. Gross profit amounted to approximately HK$394.3 million (2019: HK$306.8 million), representing an increase of approximately 28.5%. The adjusted net profit attributable to equity shareholders (after adding back the one-off listing expenses) was approximately HK$81.0 million during the Year (2019: HK$32.1 million), representing an increase of approximately 152.3%.

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Air Freight Forwarding Services - 70.5% of total revenue

The Group focuses on the provision of air freight forwarding services for high-end fashion products and fine wine, mainly in the PRC, Hong Kong, Taiwan and Europe (in particular Italy). With established and sound relationship with airline carriers, the Group was able to secure cargo space by entering into block space agreements at a pre-determined price. During the Year, the Group had entered into three block agreements with airline carriers.

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During the Year, the air freight forwarding business recorded revenue of approximately HK$1,424.1 million (2019: HK$917.0 million), representing an increase of approximately 55.3%. Gross profit of the segment also increased from approximately HK$188.0 million in 2019 to approximately HK$259.3 million for FY2020, representing an increase of approximately 37.9%. The increase was primarily due to the shipments of nitrile gloves to the United Kingdom primarily from Shanghai and the demand for high-end fashion products in the PRC.

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Distribution and Logistics Services - 17.1% of total revenue

The Group is one of the earliest in the PRC and Hong Kong to provide comprehensive and customized business to business (B2B) distribution and logistics services to meet its customers' warehousing and logistics needs with cost-effective supply chain solutions. The Group is also one of the earliest in the PRC to establish its own semi-automated distribution centre to provide tailor-made logistics solutions for high-end fashion products.

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During the Year, the revenue from this segment was approximately HK$345.6 million (2019: HK$313.7 million), representing an increase of approximately 10.2%. Gross profit was approximately HK$59.7 million (2019: HK$54.5 million), representing an increase of approximately 9.5%. The increase was due to a strong surge in the sales of luxury products in the PRC, driving up the demand for distribution and logistics services.

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Ocean Freight Forwarding Services - 12.4% of total revenue

The holistic logistics solutions of the Group also include the provision of ocean freight forwarding services mainly to its air freight forwarding services customers and other customers in Italy and Taiwan when they require the Group to ship some of their products by sea incidentally or on a stand-alone basis.

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During the Year, the revenue from this segment was approximately HK$250.9 million (2019: HK$253.2 million), remained relatively stable. Gross profit was approximately HK$75.3 million (2019: HK$64.3 million), representing an increase of approximately 17.1%. The increase was due to the ability to mark higher price as certain fashion and fine wine customers shifted from air freight forwarding services to ocean freight forwarding services.

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Prospects

Looking into 2021, the Group will continue to consolidate its leading position as an integrated logistic solution provider in high-end fashion and wine industries, while actively foraying into the fast growing e-commerce and business to customers (B2C) distribution services. The Group will continue to adhere to the following development strategies to further diversify the Group's revenue and expand its business segment:

• To establish new companies for the market expansion in the PRC;
• To provide cross-border wine logistics services between Hong Kong and China by foraying into the e-commerce business and establishing a wine e-commerce platform;
• To strengthen cooperation with existing brand customers of high-end fashion by expanding the service scope to B2C services; and
• To continue expanding into areas other than luxury goods, including the newly developed medical segment this year.

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Executive Director and Chief Executive Officer of CN Logistics, Mr. Ngan Tim Wing said, "we are delighted to present our first set of annual results to our valued shareholders. As a leading logistics services provider focusing on luxury and high-end fashion products in Greater China, we have made great strides in capturing the booming China's luxury goods market despite under the influence of COVID-19. Leveraging our close and long-term relationship with airlines, we were able to secure the necessary logistics space, and provide options, flexibility and reliability to our branded clients, which has in turn, allowed us to win more and bigger tenders. At such time in need, we are also pleased to provide freight forwarding services for medical institutions in the United Kingdom for the delivery of nitrile gloves. By doing good, we believe this would also open up new opportunities with multiple medical institutions worldwide."

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Commenting on the future development of CN Logistics, Mr. Ngan added, "As the global economy is gradually recovering from the pandemic, we are ready to capture the opportunities ahead. In particular, most eyes are now on the Hainan market, as it represents one of the most rapidly growing regions in China, supported by government initiatives such as the duty-free and free-trade policy. We are proud to be chosen as an exclusive logistics service provider during the first China International Consumer Products Expo. We are also pleased to sign a MOU with two major duty-free groups in the area. Going forward, the Group will leverage its regional office in Hainan as a foothold and will continue to grow its servicing team with the aim of extending its logistics services to more brand customers.

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About CN Logistics International Holdings Limited

Established in 1991, CN Logistics is a well-established international logistics solutions provider with core business of providing air freight forwarding services and distribution and logistics services in relation to fashion products and fine wine, primarily focusing on high-end fashion (including luxury and affordable luxury) products. According to the CIC Report, the Company ranked first in the distribution and logistics market for high-end fashion products in both the PRC and Hong Kong in 2019.

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This press release is issued by DLK Advisory Limited on behalf of CN Logistics International Holdings Limited.

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For enquiries, please contact:

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DLK Advisory 金通策略

Tel: +852 2857 7101

Fax: +852 2857 7103