Yongmao posts 78.8% increase in net profit amid construction recovery

MAINBOARD-listed crane builder Yongmao Holdings saw net profit surge by 78.8 per cent to RMB44.5 million (S$9.39 million) for the half-year ended Sep 30, 2021, from RMB24.9 million a year ago.

Revenue for the half-year also rose to RMB631.4 million, 57.3 per cent higher than the RMB401.3 million the company posted a year ago.

The company said that this was due to the low base a year ago as the pandemic hit different countries, causing them to go into lockdown. During 1H FY2022, the company noted that certain backlogged deliveries were fulfilled as business activity resumed.

Revenue from its operations in China rebounded most strongly, increasing by RMB97.8 million, followed by Asia, the Middle East and others and the USA & Europe, which increased by RMB85.7 million, RMB35.9 million and RMB10.6 million respectively.

Earnings per share stood at RMB50.14 cents, up from RMB28.04 cents in the same period last year.

No dividend was declared for the half-year ended Sep 30, 2021 as the company declares dividends on an annual basis for the financial year ending March 31.

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The company's cash and cash equivalents at the end of the half-year also increased to RMB135.7 million from RMB97.2 million from a year ago. This was driven by an increase in net cash generated from operating activities, which rose to RMB62.8 million from RMB21.4 million and an increase in net cash generated from financing activities to RMB23.7 million, reversing a decline of RMB28.8 million a year ago.

While the group saw an increase in revenue in the half-year ended Sep 30, 2021, Yongmao noted that the operating environment in the next 6 months remains challenging.

These challenges stem from power shortages caused by the surge in coal prices which resulted in local authorities abruptly cutting off power and negatively impacting overall production activities in China, the company said.

Additionally, other headwinds cited by Yongmao include supply chain bottlenecks, a persistent property bubble and Covid-19 outbreaks that could slow China's economy further in the fourth quarter of 2021. Already, the company noted that China's GDP growth in the third quarter of 2021 of 4.9 per cent compared with a year earlier was weaker than expected.

The company also said that while its major markets such as Singapore and Hong Kong have largely kept the pandemic under control, the sudden increase in cases in recent weeks may dampen recovery if more stringent lockdown measures are implemented.

Yongmao shares closed flat at S$0.765 on Monday.