Group revenue for the three months to 30 September increased by 44% to RMB204.9m (USD30m), from RMB142.2m. Domestic revenue was up 224% to RMC70.4m, while sales in Europe and the USA declined. The company said it would mitigate the impact of lower demand from these overseas markets, by focusing on growing its share of the Chinese market. It expects demand in China from infrastructure development to continue.
The company has entered into a joint venture with Singaporean crane rental firm Tat Hong Holdings, to establish a tower crane rental joint venture based in Beijing. Yongmao will hold 45% of this business.
The company said, thesharp increase in steel prices in the quarter, coupled with a shift in revenue mix towards a higher proportion of lower-margin ST Series tower cranes, pushed the gross profit margin down from 38.0% in the second quarter of 2008 to 30.6%. The Group incurred a tax expense of RMB3.3m during the quarter under review, after enjoying tax exemption until 31 December 2007. Taking into consideration the lower gross profit margin, the increase in overheads and tax expense, net profit for the Group fell 25.7% to RMB22.1m.
