Trade disputes may lead to reduced demand for high-end CNC machine tools
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On June 27, Jinshang Machine Tool China (01651-HK), a subsidiary of Japan's Jinshang Group, held an annual performance conference. The company had a good performance in revenue and net profit attributable to its mother, but the domestic macroeconomic fluctuations plus China and the United States The impact of friction also affects the future earnings performance of Jinshang Machine Tool China.
During the reporting period, Jinshang Machine Tool's China revenue increased by 23.2% year-on-year to 2.851 billion yuan (the same applies hereinafter), and net profit attributable to mothers increased by 89.4% year-on-year to 368 million yuan. Gross profit margin also increased by 4.6 percentage points year-on-year to 25.0%. This was mainly because the company expanded its service area, developed new customers and increased the scope of product use. This made the company's sales volume grow rapidly and its scale efficiency increased significantly.
Faster inventory growth
According to the company's financial report, the company's inventory for the 2018 fiscal year was 504 million yuan, and the inventory for the fiscal year of 2019 rose to 647 million yuan, a year-on-year increase of 28.37%. During the same period, the company's revenue increased from 2.314 billion yuan in FY 2018 to 2.851 billion yuan in FY 2019, a year-on-year increase of 23.21%. The growth rate of inventories is higher than the growth rate of revenues, and there is no explanation for the increase in inventory in the financial report.