Hong Kong, Apr 21, 2009 - (ACN Newswire) The board of directors of China High Speed Transmission Equipment Group Co., Ltd. ("China Transmission" or the "Company"; Stock Code: 0658.HK) announced the financial results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2008 ("2008" or the "Period under Review"). In 2008, total sales revenue of the Group amounted to RMB3.44 billion, representing a significant increase of 80.6% over 2007; profit attributable to equity holders of the Company increased by 125.8% to RMB692 million; gross profit margin was 28.8%; basic earnings per share were RMB 0.56.
The board of directors recommended the payment of a final dividend of HK$ 0.25 per share in respect of the year ended 31 December 2008.
When reviewing the results for the Period under Review, Mr. Hu Yueming, Chairman of the Company, said, "With the increasing global awareness of renewable energy, development of green power generation has become a global trend. Proactive policies and measures have been adopted by the PRC government to encourage domestic demand, which let to increasing demand for wind gear transmission equipment in China that exceeds the supply. Although the global economy was under the blow of the financial crisis in 2008, the Group still managed to leverage its strong competitiveness and achieved a total sales revenue of 80.6% through price transferring, cost controls and enhancements of production efficiency."
Wind Gear Transmission EquipmentThe wind gear transmission equipment is a new major product that has been developed by the Company in recent years. During the Period under Review, sales revenue of wind gear transmission equipment business surged by 151% to RMB1.80 billion (2007: RMB717million) as compared with last year, and capacity was 3,500 MW (2007: 1,300MW).
In 2008, the 1.5MW gearbox, jointly developed by China Transmission and GE, has entered the stage of mass production; the 2.5MW gearbox entered into an experiment stage, and is planned to commence commercial production in 2010 upon success in experiment. The testing of the 3.0MW gear box jointly developed by the Group and Goldwind is expected to be completed by end of 2009.
In addition to the existing wind power customers such as GE Energy, RE Power and Nordex, the Company also entered into contracts with Vestas this year, and supply is estimated to commence from 2009. In addition, the Group entered into a sales order with Sinovel, a large domestic wind turbine manufacturer, to commence supply from 2009.
Marine Transmission EquipmentThe marine transmission equipment is one of the new products that have been developed by the Group in recent years. All sales were generated from overseas orders. In view of the international financial crisis, the Company is proactively exploring domestic market. During 2008, sales revenue of the business increased by approximately 2 times to approximately RMB 398 million (2007: RMB136 million).
Through enhancing its cooperation with ZF China Investment Co., LTd., the Group further strengthened its efforts in the sales of marine transmission equipment in international markets, which contributed to a significant increase in sales orders. The Group increased its investment in fixed assets and expanded its production capacity to meet the rising market demands.
Transmission Equipment for High-speed Locomotives and Urban Light RailsThe Group's transmission equipment passed the product quality certification conducted by Alston in April. Such equipment has been installed in the high-speed trains in places such as Beijing, Shanghai and Nanjing for field testing.
With the increasing population in Chinese cities increasing, the national railway construction has entered into a rapidly developing period. China will invest approximately USD 750 million to build 1,600 km of urban light rails by 2015, allowing the passenger capacity to reach a record high. The high speed railway transportation network in Europe is expected to double by 2020, which brings further advantages to the Group's business. The Group will further expand both their domestic and overseas markets, turning them into a new source of economic growth for the Group.
Traditional Gear Transmission EquipmentIn 2008, sales revenue of high-speed heavy duty series gear transmission equipment, gear transmission equipment for construction materials, general purpose gear transmission equipment, gear transmission equipment for bar-rolling, wire-rolling and plate-rolling mills and other mechanical transmission equipment increased by 0.2%, 27.3%, 15.7%, 15.3% and 10.0% to approximately RMB28.9million (2007: RMB28.8 million), RMB461.0 million (2007: RMB362.2 million), RMB 166.6 million (2007: RMB144.0 million), RMB338.5 million (2007: RMB293.5 million) and RMB245.5 million (2007: RMB223.2 million) respectively.
With a focus on energy-saving and environmental protection, the Group achieved to an approach whereby our development is driven by the development of new products. Vertical roller press grinding mills, which have been developed by the Group in recent years, can save approximately 30% more energy than traditional transmission products. Thus such products sell well in the market. In response to products upgrade in the metallurgy industry, the Group has proactively developed complete sets of transmission equipment such as cold-rolled, hot-rolled, strip and bar, wire-rolling and plate-rolling mills. Sales of such products have been excellent.
Local and Export SalesIn Period under Review, the customer base for exports of the Company extends to the US, India, Japan and Europe etc, principally due to the increase in exports of wind gear transmission equipment and marine gear transmission equipment. At present, overseas sales amounted to approximately RMB754.3 million (2007: RMB314.2 million), accounting for 21.9% of total sales and representing an increase of 140% over last year.
With strong faith in the Group's prospects, Mr. Hu Yueming said, "As the new U.S. president Barack Obama plans to invest USD150 million in ten years to boost the development of new energy, the Chinese government will also make continuous efforts to develop wind power facilities. Furthermore, the National Development and Reform Commission announced at the national development and reform work conference that it will make vigorous efforts to support the equipment manufacturing industry, and the Group was granted earlier by the government an interest subsidy of RMB 25 million. Besides taking a firm stand in the development of wind gear transmission equipment market, the Group will endeavour to 1)increase products mix, increase the growth points of business revenue; 2) maintain industrial competitiveness by enhancing technological research and development and strengthening product qualities; 3) increase production capacity to improve economies of scale; 4) target overseas cooperation agreements for business market expansion; 5) extending its products to downstream market and maximize economies of scale by enhancing added values of products. Looking forward, the Group will leverage on its leading position and capture every opportunity, so as to become a leading international transmission equipment supplier and to bring maximum returns for its shareholders."
About China High Speed Transmission Equipment Group
China High Speed Transmission Equipment Group Co., Ltd. was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 4 July 2007. It is one of the largest manufacturers of gear transmission equipment and is engaged in the design, development and manufacturing of traditional and wind gear equipment, marine transmission equipment and gear transmission equipment for high-speed locomotives and urban light rails. Its products are widely used in different sectors, ranging from metallurgy, construction materials, power generation, chemical engineering, mines, hoisting, power and national safety. Meanwhile, it actively expands into the international market with products sold overseas and exported to the U.S., India, Japan and Europe etc.
Source: China High Speed Transmission Equipment Group
Contact:
Wonderful Sky Financial Group Limited Joanne Chan / Miranda Fok / Ally Cheung /Casey Tang TelF(852) 2851 1038 FaxF(852) 2815 1352 E-mailFjoannechan@wsfg.hk / mirandafok@wsfg.hk / allycheung@wsfg.hk / caseytang@wsfg.hk
Copyright 2009 ACN Newswire. All rights reserved.
