Sales and Net Profit Record High
Up by 41.4% and 72.4% respectively
HONG KONG, Jun 27, 2018 - (ACN Newswire) - Precision Tsugami (China) Corporation Limited ("Precision Tsugami", together with its subsidiaries, the "Group", Stock code: 1651), the largest foreign-owned CNC high precision machine tool manufacturer in China, today announced its audited consolidated annual results for the year ended March 31, 2018. To meet the strong demand for machine tools of manufacturing industries, the Group on the back of a strong sales force gave full play to its capabilities in procurement and in-house manufacturing during the year, which enabled it to achieve satisfactory results with sales, gross profit and net profit all at record high since it was founded.
FY2018 Annual Result Highlights
- Growth momentum of sales continued to gather, with total sales reaching approximately RMB2,314,215,000, representing an increase of approximately 41.4% compared with last year. Precision lathes, the Group's main products, which are widely recognised as industry leading, achieved sales of approximately RMB1,911,640,000 for the year ended 31 March 2018, representing an increase of 42.9% as compared with last year.
- Gross profit was approximately RMB472,116,000 for the year ended 31 March 2018, representing an increase of approximately 62.1% against last year, and gross profit margin of the Group also increased, from approximately 17.8% to approximately 20.4%, during the year.
- Net profit of the Group amounted to approximately RMB194,090,000, representing an increase of approximately 72.4% as compared with last year.
- Basic earnings per share for the year amounted to approximately RMB0.57, representing an increase of approximately 50% relative to last year.
- The Board recommended payment of a final dividend of HK$0.16 per share.
Sales of the Group continued to enjoy strong growth momentum, with all major models reporting good sales results. In FY2018, sales amounted to approximately RMB2,314,215,000, representing an increase of approximately 41.4% as compared with last year (FY2017: RMB1,636,281,000). Precision lathes, the main products of the Group, are widely recognised in the market as industry-leading and achieved sales of approximately RMB1,911,640,000 (FY2017: RMB1,337,990,000), representing an increase of approximately 42.9%. Gross profit was up by approximately 62.1% to approximately RMB 472,116,000 against last year (FY2017: RMB291,201,000), thanks mainly to the increase in sales volume as a result of the continuous effort of the Group to boost market presence in new regions and its share of new customers and new usage markets. As such, the Group's overall gross profit margin climbed from approximately 17.8% to approximately 20.4%. The increase in sales volume saw the Group's net profit shot up to approximately RMB194,090,000 (FY2017: RMB112,566,000), representing an increase of approximately 72.4% against last year.
During the year under review, the Group was able to maintain a healthy and solid liquidity position by adopting a prudent financial management approach. As at 31 March 2018, the Group had net current assets of approximately RMB799, 001,000 (FY2017: approximately RMB270,145,000) and its current ratio was approximately 2.2 times. Basic earnings per share for the year were approximately RMB0.57, representing an increase of approximately 50% as compared with last year. The Board recommended payment of a final dividend of HK$0.16 per share.
Going forward, the Group will more actively seize market opportunities, explore new application fields, and maintain and keep improving its position in the CNC high precision machine tool market in China. The Group will continue to step up market exploration and promotion of key products, invest more in new products and upgrade of existing models, as well as expand its sales and distribution network and customer base in China so as to increase sales volume. To meet its future development needs, production plant four of the Group is being renovated with two new plants to be added, and construction of the new production plant in Anhui Province is about to begin. The Group will also maintain stable relationship with quality suppliers to support mass production of CNC high precision machine tools, which can then be sold at more competitive prices.
On the sales front, the Group will continue to adhere to the customer-oriented principle and provide higher quality and more effective customer services. It will increase the number of sales and service centres in current traditional areas, aiming to achieve a 2-hour after-sale service circle. In addition, building on its existing solid foundation, the Group will expand its sales network from traditional areas to across the country. It will explore other areas outside Guangdong, Zhejiang, Jiangsu and Shanghai for setting up new sales and service centres. During the year under review, the Group established flagship showrooms in Wuhan and Tianjin and new centres in Chengdu, Foshan, Changsha, Liuzhou, Suzhou and Shijiazhuang. It plans to open new centres in Jinan, Zhengzhou, Nanchang and other cities in FY2019.
Dr. Tang Donglei, Chief Executive Officer and Executive Director of Precision Tsugami, said, "As the macro economy and industrial output value of China continue to grow, we believe the CNC high precision machine tool industry in the country will further strengthen. Rapid development of industries in China including automobile, consumer electronics and industrial automation that use CNC high precision machine tools will directly fuel sales volume and expansion of the CNC high precision machine tool industry in the country. In addition, the Chinese government has in recent years kept rolling out policies that encourage development of machine tools manufacturing technology, with the aim of strengthening the competitiveness of machine tools made in China, thereby creating more business opportunities for the industry in China. The Group will seize the opportune time to improve its operational and financial performance that it may consolidate its industry leadership and generate satisfactory returns for shareholders."
About Precision Tsugami (China) Corporation Limited
The Group is an established foreign-owned CNC high precision machine tool manufacturer in the PRC which primarily engages in the manufacture and sales of a wide range of CNC high precision machine tools under the TSUGAMI brands. The Group has been listed on the Main Board of The Stock Exchange of Hong Kong Limited on 25 September 2017. The Group's CNC high precision machine tools can be broadly classified into five major product categories, namely, precision automatic lathes, precision turret machines, precision machining centres, precision grinding machines and precision thread and form rolling machines. The Group offers CNC high precision machine tools that are of standardised design and specifications to its customers and is able to provide machine tool solutions to them and make various specifications and/or customisations to CNC high precision machine tools. According to Frost & Sullivan, in terms of revenue in 2016, the Group has ranked fourth in the CNC high precision machine tool industry in the PRC and was the largest foreign-owned CNC high precision machine tool manufacturer in the PRC. The Group has also ranked first in the PRC precision automatic lathe market in terms of revenue in 2016, with a market share of approximately 34.8%.
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