|For the six months ended 30 June
|1H 2008||1H 2007||Change %|
|Profit Attributable to Equity Holders||262.7||286.8||(8.4)|
|Basic Earnings Per Share (RMB cents)||16.4||17.9||(8.4)|
|Interim Dividend Per Share (HK cents)||6.5||9.0||(27.8)|
(26 August 2008 – Hong Kong) Haitian International Holdings Limited (“Haitian International” or “the Company”, together with its subsidiaries and associates collectively known as “the Group”; stock code: 1882), one of the world’s largest plastic injection moulding machine (“PIMM”) manufacturers, is pleased to announce its interim results for the six months ended 30 June 2008.
Commenting on the Group’s results for the first half of 2008, Mr. Zhang Jianming, Executive Director and CEO of Haitian International said, “Despite challenging operating environment for the period with unfavorable factors such as slowdown of the U.S. economy, fluctuation of oil price and surge of raw material costs, like steel and iron, capitalizing on our brand equity, strong R&D capacity and remarkable product quality, as well as adopting appropriate strategies, the Group managed to achieve a moderate growth in both sales and gross profit. Our growth rates were unrivaled among our peers, allowing us to strengthen our leading position in the industry.”
For the six months ended 30 June 2008, the Group’s sales amounted to approximately RMB 2,060 million, representing an increase of 9% compared to the same period a year ago. Gross profit grew 3.4% to approximately RMB 568 million. Profit attributable to equity holders slightly declined 8.4% to approximately RMB 263 million, equivalent to earnings per share of around RMB 16.4 cents. The Board of Directors declared an interim dividend of HK 6.5 cents per share.
During the period under review, due to the slowdown of the US economy, sharp increase in world crude oil and plastic material prices, continued tightening of austerity measures by the Chinese government and the implementation of Chinese new labour law, some companies, especially small-medium enterprises, had to cut their capital expenditures. This resulted in a drop of demand for small tonnage PIMMs (500 tonnages or below). The Group enhanced its product portfolio, made more efforts on selling higher margin products and focused on less-impacted sectors like logistics, automotive and electrical appliances, in which medium to large tonnage PIMMs (500 tonnages or above) are mainly used, in order to maintain its business growth. During the period, the Group’s sales of small tonnage PIMMs merely slightly dropped by 2.1% to RMB 1,280 million, yet that of medium and large tonnage PIMMs soared by 33.8% to RMB 736 million.
– Cont’d –
To address the negative impacts from the substantial increase in the costs of raw materials such as steel and iron, in addition to increasing the variety of higher margin products, the Group has raised the selling price of products by approximately 6% and introduced cost-saving measures. All this offset partial of the cost pressures. The Group’s gross profit margin only slightly lowered by 1.5 percentage points to 27.6% when compared to that of the corresponding period last year.
Mars (J5) Series, the new generation energy-saving products, which was just launched at the end of 2006, continued to be one of the Group’s major growth drivers. The series achieved excellent sales performance for the first half of 2008 with RMB 491 million, exceeding the full-year sales of 2007. The two platen machines, Jupiter Series, in which the Group owns nine patents, recorded sales of RMB 75 million for the first half of 2008, a notable increase of 159% when compared to the second half of 2007.
Additionally, Haitian International’s achievements in research and development area continued to be well recognized by the market. Zhafir Plastics Machinery, a German R&D company acquired by the Group last year, launched its first all-electric PIMM – Venus Series. The new series was awarded an “Excellent” rating by the judging panel at the Polish International Fair of Plastic Processing Plastpol. This not only demonstrated the Group’s strong R&D capacity, but also strengthened its brand recognition. Recently, the Group was named one of the first batch of “innovative enterprises” jointly by the Ministry of Science and Technology of the PRC, the State-owned Assets Supervision and Administration Commission of the State Council and the All China Federation of Trade Unions. It is expected that the Group will benefit from certain policy incentives granted by the government to the awarded enterprises.
As of 30 June 2008, the Group had a solid financial position with net cash of approximately RMB 939 million.
Looking forward, Mr. Zhang said, “It is anticipated that the uncertainties of market condition and high raw material price will continue in the second half of 2008. The Group will continue to enhance our product mix, apply appropriate raw material purchase strategies and control production cost by streamlining workflow of our operation. We will also consider adjusting selling prices duly in order to cope with the fluctuations of raw material costs.”
Mr. Zhang concluded, “Leveraging on the Group’s diversified product portfolio and production capacity, highly recognized brand and quality control, strong R&D capability and sound financial position, coupled with our innovation and dedication to creating competitive edges for our customers, partners and suppliers, we are well poised to face these adverse market conditions and challenges with positive and proactive attitudes. We are confident that we can continue to outperform the market.”
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About Haitian International Holdings Limited
Haitian International primarily designs, develops, manufactures, sells and supports plastic injection moulding machines (“PIMMs”) and related parts which are used by its end-user customers across a wide range of industries, such as automotive, construction materials, healthcare, logistics, packaging, information technology, electrical appliances, electronic and other consumer products etc., to produce plastic products and parts. According to the China Plastic Machine Industry Association, Haitian International is the largest PIMM manufacturer in the PRC with a market share of 32% in terms of sale volume in 2006.
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