China gloom outweighs overseas sales pick-up at Yongmao

Singapore

OVERSEAS growth was not enough to stem a sharp slide in the domestic Chinese market of crane-maker Yongmao Holdings.

The company reported a net profit of 12.4 million yuan (S$2.6 million) for its second quarter ended Sept 30, 2014, down 16.3 per cent from 14.9 million yuan a year ago.

Yongmao had reported a higher consolidated net profit due to higher margins, but a higher amount was due to minority interests.

Revenue slid 5.4 per cent to 219.5 million yuan, from 232.1 million yuan a year ago. Quarterly revenue from China plunged to 107 million yuan for the quarter versus 157 million yuan a year ago and 133 million yuan a quarter ago.

The company said this was due to a property slowdown in China. There is an oversupply situation in second- to fourth-tier cities, and sales are slowing in first-tier cities, Yongmao said.

But overseas revenue grew to 113 million yuan versus 75 million yuan a year ago and 96 million yuan a quarter ago, boosted by sales to places like Nigeria, Finland, Singapore, Hong Kong, Macau and the Middle East.

Group general manager Sun Tian said Yongmao was also hit by intense competition in the tower crane industry and a slowdown in investment in the infrastructure, real estate and power generation sectors.

The company will actively promote its brand of tower cranes in tradeshows in China and other Asian emerging economies such as Vietnam and Myanmar, he said.

Yongmao is an associate company of crane renter Tat Hong Holdings, which holds a 24 per cent stake and reports its earnings on Friday. Yongmao shares, which are illiquid, last traded at 15.5 Singapore cents.