Tool firm's profit rise fails to halt share slide
Strong earnings posted by power tools and home appliance maker Techtronic Industries failed to revive its flailing share price amid investor concerns over its heavy exposure to United States and Europe markets.
Techtronic, owner of the Ryobi tools brand and Hoover vacuum cleaners, said net profit jumped 72.8 per cent year on year to US$80.26 million in the first six months. Turnover rose 11 per cent to US$1.78 billion.
However, its share price dropped 41 HK cents, or 5.467 per cent to close at HK$7.09 yesterday despite the earnings report. The Hang Seng Index closed down 3.08 per cent yesterday.
Techtronic was the second most shorted Hong Kong stock in May this year, behind only Chaoda Modern Agriculture (Holdings), according to data provided by Dealogic. Its stock price has been falling since April, when it peaked at a six-month high of HK$11.06.
Seventy per cent of the company's revenue came from the US market, with Europe contributing about 24 per cent and Asia and the Pacific the rest.
Sales in the US grew 7 per cent in the first half, while Europe and Asia grew 16 per cent and 37 per cent respectively.
Techtronic chief executive Joseph Galli said the company had managed to grow amid 'very difficult' market conditions by introducing new product lines.
Galli said the slow property markets in the US and Europe had not affected industrial product sales which benefited from strong demand.
Horst Pudwill, the chairman of Techtronic, said he was pleased with the first-half result and was upbeat about the company's performance for the second half, despite the gloomy outlook for the US economy.