China Env profit after tax expanding 72% over the previous corresponding period
SINGAPORE, 11 November 2010
(ä¸ å½ç¯ä¿æéå ¬å¸)– MAINBOARD-LISTED China Environment Ltd.
(China Environment or the Group) today announced that it has turned in profit after tax attributable to shareholders of RMB68.5 million (approximately S$13.9 million) for the nine months ended 30 September 2010, expanding 72% over the previous corresponding period.
The Group also saw an increase in revenue of RMB435.0 million (approximately S$88.6 million), 13% more than the RMB385.2 million a year before.
Corresponding to the revenue expansion, gross profit was RMB124.9 million, increasing 8% over the RMB115.8 million previously. Its gross profit margin marginally decline to 29% for the period compared to 30% in the same period a year before.
Earnings per share for the nine months ended 30 September 2010 was 10.7 RMB cents which increase from 6.9 RMB cents previously.
For the period under review 31 projects were completed, with 2 others ongoing. In comparison, for the corresponding period last year, the Group completed 30 projects and 7 were ongoing.
The lion’s share of revenues were from customers in the power generation segment which contributed 94.0%. Customers in the chemical industry made up 3.7% followed by the paper mill segment with 2.2%.
Quarter-on-quarter, the Group’s revenue came in at RMB104.4 million compared to RMB154.8 million previously. Profit after tax attributable to shareholders returned to positive territory at RMB12.7 million in comparison to a net loss of RMB5.0 million a year ago.
The increase in net profit for the third quarter of 2010 was mainly due to reduction of RMB29.3 million in goodwill written-off in the third quarter of 2009. Revenue decrease was due to a lower number of completed projects compared to the preceding
corresponding period; 18 dust collectors projects were completed compared to 14 in the third quarter of 2010.
For the nine months ended 30 September 2010, operating expenses were 46% higher at RMB31.3 million against RMB21.4 million incurred in the nine months ended 30 September 2009. This was because of an increase in the level of business activities for the period that led to higher sales and marketing expenses and salaries, on top of other sales-related expenses.
China Environment is a provider of waste gas treatment systems in the People’s Republic of China. It designs and constructs waste gas treatment systems and its key products comprise Electrostatic Precipitators (ESPs) including Electrostatic Lentoid Precipitators (ESLPs), baghouses and hybrid dust collectors. Its products and solutions are very effective in treating waste gas with dust particles particularly in highly-polluting industries such as power generation, cement, mining and chemical industries.
The Group has an order book valued at RMB62.3 million based on firm contracts as at 30 September 2010. The Group has secured additional 3 new contracts with the total contract sum amounting to RMB35.9 million in October 2010.
Mr Huang Min (é»æ), China Environment’s Executive Chairman and Chief Executive Officer, said the results showed a healthy expansion on both the top and bottom lines for the nine months ended 30 September 2010. “Our strategic direction remains unchanged; we will continue to grow the business through prudent investment in R&D and intensify our business development into new markets within and outside of China.
“We are confident that these moves will strengthen our market position and put us in a better position to capture new opportunities in a sector that continues to offer enormous growth potential. We remain committed to achieving sustained profitability and increasing long term shareholder value," added Mr Huang.
China Environment continues to benefit from a strong balance sheet. Net working capital stayed healthy at RMB442.8 million. Total assets were RMB562.8 million, cash and cash equivalents were RMB61.8 million and net assets were RMB447.3 million.
This gave a net asset value of RMB69.9 cents per share compared with RMB59.0 cents per share as at 31 December 2009, growing by 18%.
Business outlook
The environmental protection industry in China is still at an early growth stage, and the Company expects to benefit from a sector that continues to hold long-term prospects as it expands to meet the growing demands for industrial waste gas treatment products and solutions from large industrial customers.
Shedding light on the Group’s outlook for the next few months, Mr Huang said: “Several factors give us confidence in China Environment’s future. We are in a sector that continues to see government support and investments. We have a firm foothold in a large local market and strong local connections, generating a significant part of our business from repeat clients.”
“Our long term vision for the Company is to grow and transform it into a complete environmental protection solutions company, extending our products and services to include the provision of water and noise pollution equipment and solutions to industrial
customers. Indeed, exciting times are ahead for the Group,” stressed Mr Huang.
Hong Kong dual listing
The Company has also announced plans to seek a dual primary listing on the main board of the Stock Exchange of Hong Kong (SEHK) through a public offering of new shares.
The Group said the move will allow it to tap one of Asia's most dynamic equity markets should the opportunity arises, as well as widen its private and institutional investor base to increase the liquidity of its share trading. With the new capital raised from the SEHK’s listing, it will further strengthen the Group’s financial position and it will put the Group in a more favourable position to exploit more business opportunities as and when it arises.
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Last edit: 13 years 5 months ago by DBT. Reason: amend
Looks small to me, considering that it is just about 1 quarter's worth.
Quote press release: "The Group has an order book valued at RMB62.3 million based on firm contracts as at 30 September 2010. The Group has secured additional 3 new contracts with the total contract sum amounting to RMB35.9 million in October 2010."
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That is about RMB100 million, which was the revene for 3Q2010.
Views differ depending on whether one view it optimistically or pessismistically juz as whether one view a cup as half full or half empty.
My view is this is a growth stock which I will hold for long term, especially as China is now very strict on industrail air pollution.
