Five Chinese MSCI machinery conglomerates have released their unaudited preliminary annual financial reports this week for 2017 as updated till now.
Among all five machinery companies listed in the MSCI, four of them revealed an improved financial performance in 2017 when compared to the previous year.
The four profitable companies are Sany Heavy Industry Co., Ltd. (600031), XCMG Construction Machinery (000425), Zoomline (000157), and the China International Marine Containers Group (CIMC)(000039、299901).
China State Shipbuilding Corporation Limited (CSSC), on the other hand, saw a loss ranging from 2.2 to 2.5 billion yuan last year. Added to the previous year's 2.6 billion yuan loss, the company has accumulated nearly a 5 billion yuan deficit in two successive years.
According to the rules of the listed companies in China, the CSSC would be given a warning of delisting if it confirmed the status of a deficit occurring in two successive years after the audit.
Influenced by the gloomy market and the low ship prices, the company accrued substantial impairments for some shipbuilding contracts according to the situation of the hand-held marine engineering and ship products.
The total volume of business completed by the company in the current period for shipbuilding and other products has decreased year-on-year, resulting in a relatively substantial decrease in the company's business income year-on-year. At the same time, the current product gross margin did not increase significantly, so that the profit from the main business also declined significantly when compared to the same period a year ago.
The company debt went higher, and the interest expenses increased year-on-year; The company 's primary currency, the dollar, has depreciated considerably when compared to the end of last year, resulting in increased losses from the currency exchange.
The net profits of Sany are expected to surge by a range between 898% and 937% to a range of between 2.03 billion yuan to 2.11 billion yuan in 2017.
The external factors contributing to the improved financial performance of Sany, as stated in the reports, were the increased demand from the downstream industry and an upgrading of its equipment craze under the country’s favorable macro-economy environment. The engineering machinery industry is growing rapidly, therefore the overall profit level of the industry is lifted to a large extent.
The company’s core competitiveness is further strengthened, the sales revenue of excavating machinery, concrete machinery, and lifting machinery increased substantially when compared to the previous year.
Sany also keeps improving its operation management systems and its internal efficiency while curbing its business risks, which resulted in improved profitability, a lower period of expenses and an increase in cash flow.
The net profits of XCMG were estimated to be in the range of RMB one billion to RMB 1.05 billion, an impressive rise when compared to the figure of RMB 208.5832 million for the previous year.
In its preliminary financial report, XCMG credited the significantly improved financial performance to its better management practices and intensive technological enhancements in 2017.
China International Marine Containers (Group) Ltd. (CIMC)’s net profit surged from 345% to 419% and from RMB 2.4 billion~2.8 billion in 2017.
The engineering machinery manufacturer Zoonline has reported an expected net profits range between 1.3 billion to 1.4 billion yuan in 2017, a significant turnaround when compared to the previous year, which was a loss of 933.698 million yuan.
Zoomlion associated its improved financial performance to the recovery of its engineering machinery industry and the escalation of its product structures.
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