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Sep 8th, 2008                                Print this article

Injection molding: Haitian results paint a mixed, but still positive, picture

By Modern Plastics Editorial Staff

Haitian International Holdings Limited, the holding company responsible for Haitian (Ningbo, China)—the largest (by units made per annum) manufacturer of injection molding machines and one of the last publicly traded plastics machinery manufacturers—has reported its interim 2008 financial results, revealing a sales increase of 9% compared to the same period in 2007. Gross profits rose 3.4% to RMB 568 million (about $83 million). Earnings per share dropped 8.4%, and the firm cut its dividend by 27.8%. Total sales for the period were RMB 2.06 billion (approx. $300 million). The company has about a 32% share of the injection molding machine market in China, the world’s largest.

In a statement, Zhang Jianming, executive director and CEO of Haitian International, said, “Despite a challenging operating environment for the period, with unfavorable factors such as the slowdown of the U.S. economy, fluctuation of oil prices, and a surge of raw material costs, like steel and iron, capitalizing on our brand equity, strong R&D capacity, and remarkable product quality, as well as adopting appropriate strategies, the Group managed to achieve a moderate growth in both sales and gross profit. Our growth rates were unrivaled among our peers, allowing us to strengthen our leading position in the industry.” The company has seen a 2.1% drop to RMB 1.28 billion ($186.9 million) in demand for small tonnage presses (500 tonnes and below), but interest in medium and large tonnage machines rose 33.8% to RMB 736 million ($107 million).

To help offset increases in the costs of raw materials such as steel and iron, the company says it has raised equipment selling prices by approximately 6% and introduced internal cost-saving measures.

The Mars range of machines, introduced in 2006 (see related story here) remains one of the firm’s major growth drivers, with sales for the first half of 2008 reaching RMB 491 million ($71.7 million), which exceeds the full-year sales of 2007.

Looking forward, Zhang said, “It is anticipated that the uncertainties of market conditions and high raw material prices will continue in the second half of 2008. The Group will continue to enhance our product mix, apply appropriate raw-material purchase strategies, and control production costs by streamlining workflow of our operation. We will also consider adjusting selling prices duly in order to cope with the fluctuations of raw material costs.”

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