FAST NEWS: CIMC Profit Triples on Strong Overseas Sales

The latest: Container truck manufacturer CIMC Vehicles (Group) Co. Ltd. (1839.HK; 301039.SZ) announced on Tuesday its third-quarter net profit jumped 201% to 295 million yuan.Excluding non-recurring items, the profit was up by an even stronger 226.1% to 312 million yuan.

Looking up: The company’s revenue rose 28% to 6.21 billion yuan in the third quarter, fueled by growing overseas gains, including rapid growth in North America.

Take Note: Despite the strong third-quarter performance, CIMC’s net profit for the first three quarters of the year still decreased by 16% year-on-year to 660 million yuan, mainly due to effects of the Covid-19 pandemic in China on the logistics and transportation industry in the first half of the year.

Digging Deeper: CIMC Vehicles designs, manufactures and sells a wide range of semi-trailers to customers in China, North America and Europe. Despite widespread disruptions caused by the global pandemic starting in 2020, China’s quick control of its local outbreaks minimized disruptions to its logistics industry in the pandemic’s first two years. That allowed CIMC Vehicle to post record revenues for two consecutive years. But that changed this year, as China’s strict measures to control the highly contagious Omicron variant, combined with deteriorating trade conditions due to the conflict in Ukraine, created challenges for the semi-trailer industry. As a result, CIMC Vehicle’s revenue fell 36.8% to 11.2 billion yuan in the first half of the year.

Market Reaction: CIMC Vehicles’ shares rose on Wednesday after the quarterly results were announced, closing up 5.3% at HK$5.13 at the midday break. The stock currently trades near the lower end of its 52-week range.

Translation by Jony Ho

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