Net Profit Climbs 130% with Revenue Up by 64.8%
HONG KONG — Precision Tsugami (China) Corporation Limited (“Precision Tsugami”, together with its subsidiaries, the “Group”, Stock code: 1651), the largest foreign-owned CNC high precision machine tool manufacturer today announced its unaudited interim results for the six months ended 30 September 2017. This is the first interim result announcement following the Group’s listing on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”) on 25 September 2017.
2017 Interim Result Highlights
– Net profit amounted to RMB1 billion, representing an increase of 130% as compared to the same period last year
– Sales amounted to RMB1.19 billion, representing an increase of 64.8% as compared to the same period last year
– Precision automatic lathes, the Group’s main products, received wider recognition in the market as an industry leader and achieved sales of RMB704 million, representing an increase of 55.2% as compared to the same period last year
– Precision turret machines made remarkable progress in market exploitation in automobile manufacturing and other industries and achieved sales of RMB263 million, representing an increase of 116.9% as compared to the same period last year
– Gross profit rose to RMB235 million, representing an increase of 85.9% as compared to the same period last year; and gross profit margin climbed to 19.57%, representing an increase of 2.23 percentage points as compared to the same period last year
– Earnings per Share amounted to RMB0.33 per Share
As manufacturing industries in China continued to show strong demand for machine tools, the Group sustained the great momentum in sales performance starting from last autumn with each of its major models recording good results. The sales increased 64.8% to RMB1.19 billion as compared to the same period last year. (2016: RMB727 million) Among which, precision automatic lathes, the Group’s main products, gained wider recognition in the market as an industry leader and achieved sales of RMB 704 million (2016: 454 million), representing an increase of 55.2% as compared to the same period last year. Precision turret machines, a major product line of the Group in the future, made remarkable progress in market exploitation in automobile manufacturing and other sectors, achieving sales of RMB263 million (2016: RMB124 million), representing an increase of 116.9% as compared to the same period last year. Precision machining centres and precision grinding machines, like many other models, also saw considerable increases and achieved sales of RMB110 million and RMB58 million, representing increases of approximately 76.6% and 33.6% respectively, as compared to the same period last year.
In addition, as the Group continues to expand its business, the increase in sales and production volumes led to economies of scale together with improvement in operating efficiency. During the report period, gross profit increased by approximately 85.9% to RMB235 million as compared to the same period last year (2016: RMB126 million); The Group’s overall gross profit margin for the six months ended 30 September 2017 has increased 2.23 percentage points to 19.6%, as compared with the same period last year (2016: 17.3%). Earnings per Share amounted to RMB0.33 per Share. The Board does not recommend the payment of any interim dividends in respect of the six months ended 30 September 2017.
During the report period, the Company completed the initial public offering (including the issuance of 13,500,000 over-allotment shares) and was six times oversubscribed, receiving net proceeds of approximately HK$328 million. The Group has been listed on 25 September 2017 and its stock price has risen for over 40% compared to the offer price, fully demonstrating the investors’confidence and recognition on the Group. Net proceeds raised from the offering amounted to approximately HK$258 million, excluding the additional proceeds from exercising the over-allotment option. As the economy and industrial output value of China maintain sustained growth, the management believes that the CNC high precision machine tool industry in China will further strengthen. The rapid development of the two largest sectors that apply CNC high precision machine tools in China, i.e., the automobile and consumer electronic product sectors, will directly promote the sales volume and expansion of the industry in China. In addition, in recent years the Chinese government has continued to adopt policies that actively encourage the development of the manufacturing technology of machine tools in order to strengthen the competitiveness of domestically produced machine tools. These favourable factors have created more business opportunities in the CNC high precision machine tool industry in China.
Dr. Tang Donglei, Chief Executive Officer and Executive Director of Precision Tsugami said “The Group will maintain and continue to strengthen market position in the CNC high precision machine tool industry in China. We will broaden the application uses of CNC high precision machine tools and expand sales network, and expand our customisation and development capabilities to develop and manufacture key components. We will improve the software, production technology and techniques for application uses and expand our production facilities and production capacities in order to keep increasing our sales volume. The Group will continue to adhere to the customer-oriented principle, provide more effective customer services with better quality and further improve its operational and financial performance of in order to strengthen our market position in the industry and create satisfactory returns for shareholders.