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Zoomlion Realizes High-quality Growth with 345.51% Net Profit Growth in Q1’18

2018-06-13

Recently, Zoomlion's QAY300 all-terrain crane travelled far across the sea, and arrived in Argentine, In April 27, Zoomlion released its Q1’18 Report. Within the reported period, the company realized revenue of RMB 6.36 billion and year-on-year growth rate of 20.58%. Public shareholders’ net profit reached RMB 377 million, increasing by 345.51%, compared to the same period last year. Net cash flow produced by operating activities of the company was RMB 454 million, growing by 353.13% compared to the same period last year.

Zoomlion held that Zoomlion still focused on primary business in 2018, adhering to business expansion and improvement, and realizing high quality development of main business. Benefited from the continuing recovery of construction machinery industry and market share improvement of the company’s dominant products, the company’s business performance in Q1 continued rising.

80% Growth Rate with Construction Machinery Business and High-quality Development of Main Business

Supported by policies of building a powerful country in the area of communications and reviving rural areas, domestic infrastructure construction industry is in leap-forward development. In addition, with the promotion of the “Belt and Road” initiative, overseas sales of construction machineries continue growing. Driven by both domestic and overseas demands, construction machinery industry entered a development period of continuous booming.

Benefited from these factors, Zoomlion's revenue in Q1”2018 kept a continuous growing momentum, increasing by 20.58% compared to the same period last year. What’s more, business revenue of the company’s construction machineries realized a dramatic growth rate of up to 80%. Furthermore, domestic market shares of primary products, such as crane machinery and concrete machinery, continue leading the industry; sales volume of newly developed pavement machineries and dry-mixed mortar machineries continued growing.

Sales Structure Improvement of 4.0 Products Greatly Boosts Profitability

Faced with the new economy and new business type dominated by the Internet and the Internet of Things, Zoomlion intensified its transformation and innovation to closely connect traditional equipment manufacturing with new concepts and new technologies.

The new generation green and intelligent 4.0 product of Zoomlion centered on “modular platform + intelligent product” focuses on innovation, which has become a new profit growth point of the company. With products of the new series being widely promoted in market, the company's product sales structure will continue improving, proportion of high gross profit rate products will continue expanding, and products’ profitability will continue improving. “Intelligentization and informatization” have become key words of Zoomlion’s products.

In Q1, high sales of Zoomlion's new generation construction machinery 4.0 products continued as before. In the company’s promotion convention for concrete machinery 4.0 product and new road pavement machinery, Zoomlion's intelligent rotary drilling rig, 4.0 concrete machinery, and 4.0 road roller were warmly welcomed by customers, making a record high in order volume.

Zoomlion’s 4.0 new products were successively released in the market in the first quarter. Single steel-wheel dual-driver road roller ZRS322E was officially released from the assembly line. The first fully localized concrete wet-spraying machine CSS3-Z1 of Hunan CIFA was delivered to customer. At present, the company is making efforts on aerial work platform and earthwork machinery. Research and development of “intelligent and efficient” new generation excavator and aerial work machinery is making rapid progress. Streamlined, automated, and intelligent aerial work platform manufacturing line and tower crane manufacturing line are also under active preparation.

In 2018, overseas orders of 4.0 product are also increasing sharply. Recently, ZCC2600 was successfully exported to Kenya, becoming the first crawler crane 4.0 product of Zoomlion exported overseas. In Saudi Arabia and Malaysia, sales of 4.0 crane and tower crane are also growing steadily. Tunisian agent placed a 100-forklift order to Zoomlion’s industrial vehicle branch, making a new record in the value of single overseas order.

With 4.0 intelligent product as the carrier, Zoomlion connects with equipment, enterprise and customer by the Internet of Things, big data, and mobile internet. So far, Zoomlion’s cloud platform of the Internet of Things has approximately 140,000 online devices, providing customers with massive equipment data.

353.13% Net Growth Rate of Operational Cash Flow Further Improves Operational Stability

Shown by Zoomlion's first-quarter report of 2018, benefited by strict risk control and inventory control, total inventory of Zoomlion continued decreasing from RMB 8.886 billion at the beginning of the year to RMB 8.549 billion. Meanwhile, the company further enhanced risk consciousness, timely analyzed customer and frontline business via CRM system and big data platform, and firmly control key risk points.

In addition, the company's operating activity contributes to a net revenue of RMB 454 million and a growth of 353.13% compared to the same period last year. Abundant cash flow has also laid a solid foundation for future development of the enterprise.

Industrial experts said that domestic infrastructural construction might exceed expectations in 2018. Driven by the initiation of infrastructure projects like Yangtze River economic belt, Xiong’an New Area, Pan-Pearl-River-Delta belt, and Guangdong-Hong Kong-Macau Greater Bay Area, domestic construction machinery industry is expected to have a wide development space.

In future, Zoomlion will continue embracing new technology, new market, and new economy, further improving the company's profitability, and building a new equipment manufacturing enterprise.


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