The Ningbo giant company of injection moulding machine manufacturing, that is one of the most famous names in Chinese machinery is now suffering from world’s recession and slow economy. We are trying to show that why the company’s earnings were down for about 15% during the first half of 2019. Before that we will have a short history of the Haitian Group.
Founded in 1966, with over 50 years of growth through entrepreneurial brilliance, Haitian Group has developed into a holding company with multi-national operation and total assets exceeding RMB15 billion. The Group now has mainly covered four industries, namely plastics machinery (“Haitian International Holdings Limited” listed in Hong Kong Stock Exchange), CNC machines (“Ningbo Haitian Precision Holdings Limited” listed in Shanghai Stock Exchange), drive and control systems (“Haitian Drive”) and die casting machines (“Haitian Die Casting”).
The four companies are affiliated with over 70 subsidiaries throughout the world. In 2017, the Group has generated total sales revenue exceeding RMB15 billion, with products sold to customer over 130 countries and regions.
In recent years, the companies under Haitian Group has won a variety of honors of the national, provincial and municipal levels, including “National Innovative Enterprise”, “National Key High-Tech Enterprise”, “Famous Chinese Brand” and “State Science and Technology Awards” etc.
The Ningbo-based company, China’s largest maker of injection molding machines, said in an Aug. 26 earnings report that sales dropped 14.8 percent to just a little more than 5 billion Chinese yuan ($700 million) in the six months ending June 30, down from almost 5.9 billion yuan ($825 million) in the first half of 2018.
“We remain cautious and less optimistic about the prospects of China and the global economy in the second half of 2019,” Haitian said.
Sales within China fell 20 percent, to just over 3.3 billion yuan ($460 million), while exports only fell by 2 percent, to 1.5 billion yuan ($210 million).
It pointed to slowing demand in the Chinese auto market and lower exports of things like household appliances as hurting investor confidence in manufacturing.
“With the increasing uncertainty of external demand due to the trade war, the purchasing managers’ index for China’s manufacturing sector in the first half of the year hovered around 50, indicating the decline in demand in China’s market resulting from the lack of domestic consumption,” Haitian said.
The one bright spot was in its Zhafir all-electric machines, where sales rose 13.6 percent to 773 million yuan ($108.1 million). It said that reflected strength in end markets that need to upgrade technology.
Outside of difficulties in China, the company pointed to softness in the U.S. economy, uncertainty caused by the United Kingdom leaving the European Union, and closer to home, trade tensions between Japan and South Korea that have hurt other economies in Asia.
“Many factors have shown that the global economy is highly uncertain and is exposed to possible downside risks,” Haitian said.
Other Chinese companies listed in Hong Kong were reporting soft results.
Hong Kong-based plastics machinery maker Chen Hsong Holdings Ltd. said sales were down 2 percent, to HK$1.63 billion (US$207.7 million) in the six months ending March 31 and did not expect any improvement.
“The group believes that the market conditions in China will continue to be lackluster in the near future over uncertainties over the trade war with USA,” it said. “International markets will also feel the dark pressure of USA unilateralism, making any predictions unreliable.”
As well, Hong Kong-based injection molder and mold maker TK Group, which is heavily export dependent, said sales were down 2 percent in the first half to HK$1 billion (US$127.4 million), as trade tensions slowed orders.
It said it was looking to build or buy an injection molding factory in Southeast Asia, as the global companies it makes parts for seek to diversify their supply chains outside China.
But firms in other sectors in China’s plastics industry reported better results. The country’s largest plastic pipe maker, China Lesso Group Holdings Ltd., said sales rose 6.6 percent to 11.1 billion yuan (US$1.5 billion).
The last article about HAITIAN at this website was: Ningbo Plastics Giant Earns 15% Less in 2019
Contributed by: James Dough of Il./US
