Zoomlion's 2012 profit exceeded 7.3 billion

Since the second half of 2011, construction machinery has entered a downturn period, Zoomlion timely self-adjustment, led the industry to explore the "high-quality" development model, the annual report performance also showed "one increase and one less stable" three highlights.

As of the end of 2012, the company had monetary funds of 23.2 billion yuan, up 30.78% year-on-year; the net cash flow from operating activities was 2.96 billion yuan, an increase of 41.42% year-on-year; the main business revenue was 48.071 billion yuan, achieving stable micro growth; At the same time, the company’s receivables have increased compared to the beginning of the year but have fallen since the end of the third quarter of 2012.

This means that in the general decline in the performance of construction machinery companies, Zoomlion's overall performance is still significantly better than the industry average, and the risk control work has also achieved good results.

The steady increase in market share is also worthy of attention. The balanced product structure is another tool for Zoomlion to achieve steady development in the downturn of the industry.

In 2012, the market share of Zoomlion’s key products continued to increase: concrete machinery, the market share of the company's pump trucks increased significantly compared to 2011, and it is in a leading position in the market. The three major products of the mixer truck, on-board pump, and mixing plant occupy the market. The rate ranks first in the country; lifting machinery, the company's domestic market share of tower cranes ranked first in the industry, crawler crane products to achieve domestic sales first; earthmoving machinery, the company bulldozer domestic market share has leapt to the second industry.

In addition, the gross profit margin of Zoomlion's products is also very stable. Annual report data show that in 2012 Zoomlion’s overall gross profit margin was 32.30%, down only 0.1% year-on-year and basically stable. It is worth mentioning that the gross profit rate of concrete machinery, which accounts for a large proportion of the company's sales, still ranks first in all sectors, accumulating a total of 33.94% in the year.

Active speed regulation and sustainable development In 2012, the overall operating conditions of the construction machinery industry were relatively sluggish. The performance in the fourth quarter was particularly outstanding. “In the face of possible risks, we must dispatch them in advance. Even if the growth rate slows down in the short term, in the long run, companies will be healthier and go further.” Shen Ke, Zoomlion’s secretary general, said that since Starting in July of last year, the company gradually strengthened the collection of accounts receivable and tightened the sales credit conditions to ensure the healthy operation of the company.

"In the fourth quarter of last year, individual companies took irrational competition and promoted sales through low-price single-action sniping. From the perspective of controlling risks, the company voluntarily gave up orders with higher risk," Shen Ke said.

According to Shen Ke, from the perspective of the whole year, the decline of Zoomlion’s net profit was mainly due to the following reasons: First, the provision for impairment of assets increased: In 2012, Zoomlion responded more cautiously to receivables, Inventory impairment, goodwill and other subjects were tested for impairment. Total asset impairment increased from 257 million last year to 793 million. Second, R&D expenses increased: 2012 R&D expenses rose from 398 million last year to 584 million; Expenses increased: from RMB 36 million to RMB 294 million, mainly due to the increase in interest expense due to the issuance of two US dollar bonds in 2012.

“However, the management is full of confidence in the future sustainable development of Zoomlion.” Shen Ke said. This confidence can be confirmed on the previous February 26, Zoomlion announced an equity incentive plan, requiring the compound growth rate of not less than 12% is significantly higher than Sany Heavy Industry, the management's confidence highlights.