A Late Bloomer: ZPMC CEO Guan Tongxian

Abstract

On December 8, 2009, Shanghai Zhenhua Heavy Industries Co., Ltd. (600320.SH, “ZPMC”) issued a press release that 76-year-old President Mr. Guan Tongxian had decided to resign due to his age, and his resignation had been accepted by the XPMC Board of Directors. A special shareholders' meeting was convened on Christmas Day and agreed to recruit a new president. “Age might not be the main reason of his resignation. He's had his mind set for some time,” said an investment company manager familiar with ZPMC. Mr. Guan told his employees that he wanted no media interviews so his departure would be low profile. However, his experiences and achievements in the past decade were flashing through his mind as he left ZPMC, the world's largest manufacturer of port machinery and large steel structures. As the eldest CEO of a state-owned listed company, he had created a miracle over the past several years.

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Resources

Table I: Major Accounting Data and Financial Index of ZPMC during 2001–2009.

Index items

2001

2002

2003

2004

2005

2006

2007

2008

2009

Major business revenue

2,885,460,045

3,074,237,616

4,628,172,800

7,193,674,688

12,104,795,828

16,808,374,363

21,005,474,031

27,443,405,347

27,564,115,642

Net profit

191,532,232

137,004,461

277,692,747

465,028,796

1207,529,083

1,602,472,072

2,004,572,836

2,551,063,379

839,853,345

Total assets

4,467,633,868

5,205,288,896

7,281,864,087

10,828,538,152

13,975,965,881

19,640,876,401

29,115,331,106

53,582,768,850

51,066,425,862

Shareholders' equity (excluding the minority shareholders' equity)

1,805,331,883

1,851,036,344

2,128,729,091

3,487,064,467

4,571,319,950

5,865,608,022

11,113,874,846

15,320,701,808

15,812,245,251

Net assets per share (yuan/share)

3.95

4.05

4.66

3.39

2.97

1.90

2.94

3.49

3.60

Net cash flows per share from operating

-0.44

-0.33

-0.27

0.15

-0.30

0.29

0.17

-1.21

0.13

Earning per share (fully diluted)

0.42

0.30

0.61

0.45

0.78

0.52

0.65

0.76

0.19

Weighed average return on net assets after non-recurring profit and loss (%)

9.94

7.23

15.31

19.78

30.04

30.70

27.72

10.44

4.63

Source: 2000–2009 Annual Report of ZPMC.

Table II: Remuneration of Senior Executives (President and Vice President) of ZPMC in 2008.

Name

Position

Gender

Age

Shares held at beginning of year

Shares held at end of year

Amount of stock options held

Amount of shares with trading restriction

Amount of shares increased/decreased

Total rewards given by the Company in the report period (10K RMB, pre-tax)

Amount of shares with exercisable right

Amount exercised

Exercise price (RMB)

Whether be given by the shareholder units or other associated units

Guan Tongxian

Executive director, president

Male

76

0

0

0

0

0

35

0

0

0

No

Liu Qizhong

Executive director, vice president

Male

45

0

0

0

0

0

38

0

0

0

No

Yan Yunfu

Executive director, vice president

Male

50

0

0

0

0

0

37.91

0

0

0

No

Sun Li

Executive director, vice president

Male

37

0

0

0

0

0

35.45

0

0

0

No

Wang Jue

CFO, director

Male

45

0

0

0

0

0

33.83

0

0

0

No

Huang Hongyu

Vice president

Male

55

0

0

0

0

0

37.49

0

0

0

No

Tian Hong

Vice president

Male

46

0

0

0

0

0

36.55

0

0

0

No

Cao Wenfa

Vice president

Male

62

0

4,000

0

0

4,000

35.45

0

0

0

No

Cao Weizhong

Vice president

Male

53

0

0

0

0

0

36.89

0

0

0

No

Zhai Liang

Vice president

Male

63

0

0

0

0

0

35.45

0

0

0

No

Huang Qingfeng

Vice president

Male

34

0

0

0

0

0

36.3

0

0

0

No

Dai Wenkai

Vice president

Male

42

0

0

0

0

0

41.14

0

0

0

No

Fei Guo

Vice president

Male

47

0

0

0

0

0

42.67

0

0

0

No

Zhou Qi

Vice president

Male

37

0

0

0

0

0

36.47

0

0

0

No

Chen Gang

Vice president

Male

42

0

0

0

0

0

33.66

0

0

0

No

Liu Jianbo

Vice president

Male

46

0

0

0

0

0

40.63

0

0

0

No

Source: 2008 Annual Report of ZPMC.

Table III: Top 20 container terminals and their throughput for 2007, 2008 and 2009 (in TEUs and percentage change).

Port name

2007 20-feet standard container

2008 20-feet standard container

2009 20-feet standard container

Percentage change 2007–2008

Percentage change 2008–2009

Singapore

27 935 500

29 918 200

25 866 400

7.10

-13.54

Shanghai

26 150 000

27 980 000

25 002 000

7.00

-10.64

Hong Kong

23 998 449

24 248 000

20 983 000

1.04

-13.47

Shenzhen

21 099 169

21 413 888

18 250 100

1.49

-14.77

Busan

13 261 000

13 425 000

11 954 861

1.24

-10.95

Guangzhou

9 200 000

11 001 300

11 190 000

19.58

1.72

Dubai

10 653 026

11 827 299

11 124 082

11.02

-5.95

Ningbo

9 360 000

11 226 000

10 502 800

19.94

-6.44

Qingdao

9 462 000

10 320 000

10 260 000

9.07

-0.58

Rotterdam

10 790 604

10 800 000

9 743 290

0.09

-9.78

Tianjin

7 103 000

8 500 000

8 700 000

19.67

2.35

Kaohsiung

10 256 829

9 676 554

8 581 273

-5.66

-11.32

Port Klang

7 118 714

7 970 000

7 309 779

11.96

-8.28

Antwerp

8 175 952

8 663 736

7 309 639

5.97

-15.63

Hamburg

9 900 000

9 700 000

7 010 000

-2.02

-27.73

Los Angeles

8 355 039

7 849 985

6 748 994

-6.04

-14.03

Tanjung Pelepas

5 500 000

5 600 000

6 000 000

1.82

7.14

Long Beach

7 312 465

6 487 816

5 067 597

-11.28

-21.89

Xiamen

4 627 000

5 034 600

4 680 355

8.81

-7.04

Laem Chabang

4 641 914

5 133 930

4 621 635

10.60

-9.98

Total Top 20

234 900 661

246 776 308

220 905 805

5.06

-10.48

Source: Review of Maritime Transport 2010 (p. 97).

Table IV: World Seaborne Trade in 2001–2009 (millions of tons).

Source: Review of Maritime Transport 2002, 2006, 2010.

Figure

Table V: Global Orders of Ship-to-shore Container Cranes in 2001–2009.

Source: World Cargo News 2001–2010.

Figure

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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