Oct. 31 (Bloomberg) -- Zoomlion Heavy Industry Science & Technology Co., China’s biggest construction equipment maker, posted a 34 percent drop in third-quarter profit amid weak demand and excess market capacity.
Net income fell to 889 million yuan ($146 million) from 1.34 billion yuan a year earlier, Zoomlion said in a filing to the Shenzhen stock exchange yesterday. Daiwa Capital Markets HK Ltd. estimated profit of 900 million yuan. Sales fell 13 percent to 8.73 billion yuan.
Zoomlion rose 2 percent to HK$7 at the close in Hong Kong trading, boosting its gain to 4.5 percent since Xinkuaibao, a Chinese daily, apologized on Oct. 27 for publishing unverified stories questioning the company’s finances. The apology came after the reporter who wrote the stories told police that he fabricated the news, following his detention on Oct. 18.
“It will take time for investors to rebuild confidence in the company and the industry,” Daiwa analysts led by Li Xiong wrote in a note on Oct. 23. “We do not see any near-term upside catalysts, but sentiment may start to bottom out after 3Q results.”
Sany Heavy Industry Co., China’s second-largest construction equipment maker, reported third-quarter net income slumped 54 percent to 326.4 million yuan, according to a statement to the Shanghai Stock Exchange yesterday.
Zoomlion’s account receivables rose to 25.6 billion yuan at the end of September, the statement showed.
Zoomlion, based in Changsha in central China’s Hunan province, rose 2.1 percent to 5.72 yuan in Shenzhen yesterday.
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