Yongmao's 3Q earnings fall 41.2% to RMB 0.3 mil

Group revenue increased 19.3% to RMB 138.8 million in 3Q18, as compared to RMB 116.4 million a year ago.

This was mainly due higher sales in towercranes, higher services income, and higher sales of components and accessories.

Except for the US and Europe markets, all sales regions reported higher revenues in 3Q18.

Revenue in China, which accounts for 43.1% of group revenue, increased 16.8% to RMB 59.8 million in 3Q18 on the back of higher demands in small- and medium-sized towercranes as well as higher rental income.

Revenue from Asia excluding China, which accounts for 39.9% of group revenue, rose 28.5% to RMB 55.4 million amid higher demand of medium- and large-sized towercranes.

Despite the higher revenue, gross profit declined by 2.4% to RMB 37.5 million as average gross profit margin fell 6 percentage points to 27.0% in 3Q18.

The decrease was mainly attributable to more sales of small- and medium- sized towercranes, which generates lower gross margin, as well as lower rental income, which generates higher gross margin.

Total operating expenses decreased 8.0% to RMB 36.0 million, on the back of lower distribution costs as a result of lower exhibition expenses incurred.

As at end December, cash and cash equivalents stood at RMB 52.7 million.

Looking ahead, Yongmao says demand in China continues to be fuelled by injection of funds into infrastructure projects.

It adds that demand for towercranes outside of China is mixed, with markets such as Singapore, Taiwan and the Middle East likely to see a better demand in the replacement market, while markets such as Macau are expected to remain challenging.

Shares of Yongmao last closed at 60 cents on Jan 31.