Zhongda bullish on sales of its bus venture
Car maintenance equipment maker Zhongda International Holdings expects sales by its recently established bus venture to reach about 150 million yuan next year, or about 50 per cent of the firm's projected turnover.
The company expects to benefit as local governments replace old buses to enforce stricter environmental standards on vehicle exhaust emissions.
Vice-chairman Zhang Yuqing said he expected the joint venture to sell 700 buses next year, initially tapping the markets of Beijing and Shanghai.
'Tourist cities such as Beijing, Shanghai, Nanjing and Xian will probably adopt higher, European emission standards to clean the air next year,' he said.
There are about 3,000 double-decker and about 200,000 single-decker buses running on mainland roads, according to Mr Zhang, who estimates annual demand at about 10 per cent of the existing national fleet.
In March, Zhongda formed the venture with Jiangsu provincial government-owned Jiangsu Jinling Transportation Group in Nanjing.
The company injected 32 million yuan into the business for a 60 per cent stake while the rest is owned by Jiangsu Jinling.
The venture will have an annual production capacity of 1,200 double-decker buses and 800 single-decker buses.
Construction of the joint venture's bus plant is slated for completion by March next year.
Zhongda's net profit slid 8.98 per cent year on year to 6.85 million yuan in the first half. Turnover rose 3.14 per cent to 110.51 million yuan.
Basic earnings per share were 1.7 fen, down from 1.9 fen a year earlier.
