Gongyou Machines Ltd: preliminary results FY 2007 - increases in Revenue and Profit
In the Financial Year ending June 30th, 2007, Gongyou achieved an increase in revenue, pre-tax profit and net profit.
In RMB Mill. 2007 2006 +/- %
Revenue 202.9 192.8 5%
Gross Profit 51.7 44.1 17%
Profit before Tax 36.8 33.7 9%
Tax 2.2 0
Net Profit 34.6 33.7 3%
Revenue increased by 5%. While Gongyou enjoys a good domestic and
international demand situation and full capacity utilization, the growth in
sales was limited by capacity constraints and a price competition in the
Chinese market. Gongyou is currently using the proceeds from placements to
substantially increase its capacity.
Gross Profit increased by 17%. Our gross profit margins could be
strengthened in the past financial year and have reached a healthy level of
26%.
We observed however factors with a dampening effect on profitability. In
the domestic market in China, in spite of buoyant demand, competition
is fierce and prevents margins from rising.
Furthermore, raw material prices, mainly steel and copper, reached very high levels in the last
financial year.
Our pre-tax profit increased by 9% to RMB 36.8 Mill. Our Net Profit could still show a small
increase of 3% to RMB 34.6 Mio., in spite of a significant increase in taxation. The tax holidays ended during this
financial year.
The cash position of the group per June 30th, 2007 was RMB 37.5 Mill and
Shareholders Equity was RMB 144.1 Mill.
We expect a further increase in revenue and profit in the actual financial
year. While the tax rate could again slightly increase, strong demand and a
higher production capacity should be important drivers of growth. The
program to boost our production capacity has started in April 2007 and is
currently on-going. The additional capacity has an effect on the current
financial year.
The international expansion is the
NEXT step in Gongyous growth strategy.
Export demand, especially from Russia, ASEAN and Latin America is growing
even faster, as we continuously strengthen our network of overseas
distributors.
The full audited financial statements will be available on our website
www.gongyoumachines.com in the near future.
DONG YANWEI
CHAIRMAN
GONGYOU MACHINES LTD.
28.09.2007
Contact:
Julian Sandt
sandt@orchidcapital.net
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