1839.HK 301039.SHE
Container truck manufacturer CIMC Vehicles reported Wednesday its net profit for the first half of 2023 surged 419% year-on-year to 1.9 billion yuan, a record high for the period.

The latest: Container truck manufacturer CIMC Vehicles (Group) Co. Ltd. (1839.HK; 301039.SZ) reported Wednesday its net profit for the first half of 2023 surged 419% year-on-year to 1.9 billion yuan ($261 million), a record high for the period.

Looking up: The strong profit growth was fueled by a pickup for the company’s North America business starting from the second half of last year, together with good growth in other overseas markets and a rebound in demand for logistics services in China.

Take Note: More than half of the profit, approximately 1.11 billion yuan, owed to a one-off gain on the disposal of a long-term equity investment. If that gain was excluded, the company would have reported a net profit of 968 million yuan.

Digging Deeper: CIMC Vehicles makes and sells semi-trailers to customers in China, North America and Europe. The company achieved two consecutive years of record revenues in 2020 and 2021, but deteriorating global trade due to the Russia-Ukraine conflict, and China’s strict Covid controls, caused its revenue to drop 14.6% last year. It expects to return to strong growth this year with the end of the pandemic, and seven analysts polled by Yahoo Finance forecast an average of 35% revenue growth for 2023. But the company will need a strong second-half to 2023 to reach that growth rate, since its revenues rose just 20.3% in the first half of the year.

Market Reaction: CIMC Vehicles’ Hong Kong-listed shares fell on Thursday, closing down 4.7% at HK$6.11 by the midday break. It now trades in the middle of its 52-week range.

Translation by A. Au

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