FAST NEWS: CIMC Vehicles’ profit leaps on global business rebound

The latest: Container truck manufacturer CIMC Vehicles (Group) Co. Ltd. (1839.HK; 301039.SZ) said on Wednesday its first-quarter net profit jumped between 239% and 314% year-on-year to 422 million yuan ($61.3 million) to 516 million yuan.

Looking up: The company said its North American business grew robustly during the quarter on economic stimulus policies and rapid growth in the multimodal transport business. Meanwhile, its profitability in China and other overseas markets remained stable.

Take Note: With the company’s net profit of 457 million yuan in the fourth quarter of last year, there is still a chance of a sequential profit decline in the first quarter based on the latest forecast profit range.

Digging Deeper: CIMC Vehicles designs, manufactures and sells a wide range of semi-trailers to customers in China, North America and Europe. The company achieved two consecutive years of record revenues in 2020 and 2021 despite a difficult environment at the start of the pandemic. But deteriorating global trade due to the Russia-Ukraine conflict, and China’s strict Covid controls last year, hurt demand and efficiency for logistics, dragging down the company’s revenue by 14.6% to 23.6 billion yuan for 2022. However, management noted that the Chinese commercial vehicle industry will recover this year following the country’s abandonment of its “zero Covid” policy last December, allowing a return to a more normal macro environment.

Market Reaction: CIMC Vehicles’ Hong Kong-listed shares jumped on Thursday, closing up 10.4% at HK$6.90 by the midday break. It now trades near the upper end of its 52-week range.

Translation by Jony Ho

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