US and European sales soar at Yongmao

The firm saw a rise in revenue of 8.9% on the previous year's figures and an average gross profit margin increase of 32.9%. The improvements in revenue were largely due to improved performance in export markets. The company registered an increase in US and Europe sales of 38%, which offset a decrease in domestic sales of 12%. Sales in China still formed the bulk of the group's turnover, accounting to 54.5% of turnover for the most recent quarter compared to 67.4% last year.

Gross profit increased to RMB65.3m from RMB45.2m. Yongmao said that the increase was mainly due to higher revenue and average gross profit margin.

Average gross profit margin increased to 32.9% from 24.8%. This was mainly attributed to higher sales of the higher margin luffing series tower cranes in China and Asia as a whole. Higher rental and service income from tower cranes also contributed positively to the increase in gross profit margin. The company said that the improved margines were partly offset by provision for stock obsolescence during the financial period.

Describing the firm's future outlook, Yongmao Group said that it believed continued investment in infrastructure and residential projects would contribute to further improvements. Increasing market recognition of the Yongmao brand, quality and service will likely have a positive effect on domestic sales.

The company added that demand for tower cranes in South East Asian markets such as Malaysia and new markets like Myanmar was likely to improve due to increase in construction activities. Yongmao said that other export demand was likely to grow due to improvements in the United States and European nations economies. It anticipated that an appreciation of the Chinese Yuan against the US Dollar and Singapore Dollar coupled with potentially higher operating and raw material cost might have a negative impact on margins. However, the Group may adjust selling prices where necessary to mitigate the cost increase.