Shanghai Prime in 550m yuan capex exercise to increase output capacity
Shanghai Prime Machinery, a major precision industrial components maker in the mainland, will more than double its capital spending this year to lift output capacity in order to meet rising demand and overseas sales.
The Shanghai-based company had set aside 550 million yuan for capital spending this year, up from last year's 230 million yuan, chief financial officer Wang Pin said yesterday after the firm reported a 71 per cent surge in net profit last year.
About 150 million yuan would be used for its numerically controlled machine-cutting tools project and the remainder would be used for its turbine blades and other businesses, Mr Wang said.
The company was also looking for acquisitions on projects that would yield an internal rate of return of at least 20 per cent, he said, adding that no formal agreement had been signed.
Shanghai Prime raised HK$1.45 billion from a Hong Kong initial public offering in April last year and its gearing ratio fell to 5 per cent at the end of last year from 44 per cent a year earlier.
The company posted a net profit of 231 million yuan last year on turnover of 2.87 billion yuan.