Zoomlion Heavy Industry Science and Technology Co. reported a 48 percent drop in first-half profit as China’s slowing economic growth damped demand at the nation’s second-largest construction equipment maker.
Net income was 2.92 billion yuan in the six months ended June, compared with 5.62 billion yuan a year earlier, Zoomlion said in a filing to Hong Kong stock exchange today. Sales fell 31 percent to 20.2 billion yuan.
Zoomlion and bigger rival Sany Heavy Industry Co. (600031) are contending with weaker sales as growth of fixed asset investment slowed in China. “There will be limited room for growth in infrastructure investment in the second half” and construction of real estate will remain at a low level, Zoomlion said in the earnings statement today.
Shares (1157) of Zoomlion fell 3.1 percent to HK$6.29 in Hong Kong trading today, before the earnings were released. The stock has declined 45 percent this year, compared with a 5 percent drop in the benchmark Hang Seng Index.
Zoomlion, based in Changsha city of central China’s Hunan province, halted stock trading at least twice this year after news reports questioned its sales data. The company has repeatedly denied the allegations.
China’s urban fixed-asset investment growth eased to 20.1 percent in the first half from a year earlier, the official Xinhua News Agency reported in July. The expansion was down 0.3 percentage points, according to the report.
Zoomlion is planning to boost sales of its environmental machinery in a bid to offset the lower demand for its other products and boost profit. The company is also seeking to raise sales from outside China through acquisitions or cooperating with overseas businesses.
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