29.04.2020

Sales and profits leap for Zoomlion

Chinese crane and construction equipment manufacturer Zoomlion, has published its full year results for 2019.

Total revenues for the year were RMB43.3 billion ($6.1 billion) an increase of just under 151 percent on 2018 and a new record. The vast majority of the group’s sales - RMB39.74 billion ($5.6 billion) were made in mainland China, an increase of just over 58 percent on the previous year. Export sales however were flat, falling almost one percent, to RMB 3.7 billion ($504 million). Pre-tax profits for the company as a whole were just over 90 percent higher at RMB5.04 billion ($712 million).

Crane sales made up roughly half of the group total, having leapt 77.5 percent last year to RMB 22.15 billion ($3.1 billion), thanks largely to a strong pick up in tower crane sales in the domestic market, with tower crane sales topping RMB 10 billion ($1.4 billion). The crane business also generated a gross profit of RMB 726 billion ($1.02 billion) twice the level reported in 2018 - see: Record tower crane sales for Zoomlion.

Chairman Zhan Chunxin, said: “2019 marks the 70th anniversary of the establishment of New China, a critical year for finish building a moderately prosperous society in all respects. Chinese economy has remained moving steadily forward. Under the keynote of seeking progress in stability of the Party and the State, Zoomlion has implemented in-depth new development concept step by step, and made steady strides in high quality development.”

"Looking back to the previous years, we drew our ‘smile curve’ after experiencing a journey from peak to trough and then reaching back to the peak, deeply understanding the importance of stability to an enterprise. In 2019, we maintained a high quality and stable development. We focused on our principal business of equipment manufacturing and developed our own tempo by attaining the best balance between scale and effectiveness as well as speed and quality.”

“In 2019, we maintained a high quality and stable development. Focusing on the technological innovation and intelligent upgrade of product, new technologies and new products, as well as management reform."

"In early 2020, a sudden epidemic aroused the feeling of hundreds of millions of people across the country. The Party Central Committee with Xi Jinping as the core has led its citizens to achieve periodical triumph in epidemic prevention and control as well as resumption of work and production. During the anti-epidemic battle, we immediately assisted in the construction of Leishenshan Hospital and Huoshenshan Hospital in Wuhan by mobilising global resources to purchase medical protective supplies urgently. We have also experienced the strength and mightiness of the Party and the State, the righteousness and care from people all over the country and the importance and responsibility of an equipment manufacturing enterprise.”

“In 2020, we will continue to work towards internationalisation and to develop a new model for internationalisation by speeding up the implementation of overseas business reform, facilitating the expansion and upgrade of overseas bases and coordinating domestic and international markets.”

Vertikal Comment

It is hard not to be impressed with these numbers, although the base is very narrow with a strong reliance on the domestic construction market and little to no progress being made internationally.

Clearly the Covid-19 pandemic will have a significant impact on the group’s 2020 numbers, with the big question will it sink back to the trough or remain at a higher level. Time will tell.