MICRO-MOTOR maker Johnson Electric's earnings are on the rebound, with margins stabilising following heavy capital investment. The company designs, manufactures and markets AC and DC micro-motors under its own name. It ranks as the world's second-largest independent manufacturer after Mabuchi of Japan. Operating margins in the past few years have been at more than 20 per cent, with net profits growing, on average, at 18 per cent per annum. However, in 1994 and 1995 it suffered investment losses, while margins were squeezed by higher depreciation and raw materials costs. Operating margins have moderated to about 16 per cent. The core business continues to grow strongly, with sales expected to accelerate by almost 20 per cent for the present fiscal year, according to brokerage Vickers Ballas (HK). Hong Kong's robust trade figures for micro-motor exports attest to the underlying growth. New plant start-ups are expected to pressure margins again this year, but earnings should recover, with increased sales compensating for higher depreciation costs. The company has clinched more orders from General Motors, while luring some orders from two top Japanese car manufacturers that face cost pressures from the stronger yen. The stellar performance of US bonds in 1995 has alleviated concerns about its investment portfolio.