Power equipment firm's net up 89pc
China High Speed Transmission Equipment, which makes power and railway equipment, said its first-half net profit rose 89 per cent, boosted by strong demand for wind power equipment amid soaring oil prices.
Net profit surged to 252.8 million yuan (HK$287.6 million) for the first six months from 133.8 million yuan a year ago as sales grew 54.7 per cent to 1.35 billion yuan. Gross margin expanded to 30.9 per cent from 26.7 per cent.
'Although the price of raw materials such us steel rose in the first half, we successfully transferred the increased costs to our customers,' said chairman Hu Yueming (left). 'In the second half, we will probably benefit from the declining raw materials prices.
'As a renewable source of energy, wind power generation has been increasingly focused upon throughout the world and there is great development potential for it. We have already confirmed all the orders for next year and most of the orders for 2010.'
The company's sales of wind turbine transmission equipment, which accounted for 42 per cent of total revenue, rose 86.2 per cent to 573.7 million yuan.
Overseas sales, with customers such as GE Energy of the United States and Germany's Nordex, rose to account for 22.6 per cent of total sales in the first half, compared with 5.9 per cent a year ago. It expected exports to account for about half of the total sales within three years.
The company plans to boost capacity of wind power equipment to 6,000 megawatts next year, from 3,500 MW this year. Capacity will further grow to 9,000 MW in 2010 and about 11,000 MW in 2011.
In April, China High Speed raised 2 billion yuan through a convertible bond sale. Morgan Stanley arranged the deal.