CIMC Vehicles (01839.HK) Records Revenue of RMB18.80 billion for the First Three Quarters, Up by 7.3% Year-on-Year
(Hong Kong, 17 December 2020) CIMC Vehicles (01839.HK), an industry leader of global specialty vehicles for sophisticate manufacturing, announced its key business results for the first three quarters of 2020. According to the announcement, revenue of CIMC Vehicles for the first three quarters of 2020 amounted to RMB18.80 billion , representing year-on-year increase of 7.3%.
Accelerating growth in the third quarter amid China market’s stellar performance
Bolstered by new development landscape due to China’s dual circulation strategy that stresses on “internal circulation” as its core and also “internal circulation” and “international circulation” for driving each other, sectors related to specialty vehicles, such as “new infrastructure” initiative, e-commerce logistics and cold chain transportation, have experienced strengthening momentum. This coupled with the state policies has resulted in impressive performance of China’s semi-trailer and truck bodies for specialty vehicles market in 2020.
Given Chinese government’s hastened pace to address the issue of “over-limit and overload vehicles” and implementation of new national standards of the second-generation semi-trailers, revenue and gross profit margin of its semi-trailer business in China market recorded notable growth for the first three quarters of 2020.
With the support of “new infrastructure” initiative, truck bodies for specialty vehicle business delivered solid performance. Sales of its intelligent environmentally-friendly urban dump trucks as well as light and durable cement mixer trucks continued to rise, leading to substantial revenue growth of truck bodies for specialty vehicle business and increased proportion of the business in total revenue.
Besides, the refrigerated van truck bodies business segment was also growing fast. The COVID-19 pandemic stimulated the development of cold chain logistics market, while CIMC Vehicles’ subsidiary Shandong CIMC, the main manufacturer of refrigerated vans truck bodies in China, is the key supplier for domestic logistics enterprises in China, such as SF. Given the sustaining high growth of demand for refrigerated vehicles in China, CIMC Vehicles achieved significant growth in revenue and gross profit of the refrigerated van truck bodies business.
As a result of various driving factors, CIMC Vehicles achieved revenue of over RMB18.80 billion for the first three quarters of 2020, representing year-on-year growth of 7.3%. In addition, its operating cash flow increased by 26.2% year-on-year to over RMB1.61 billion. Under the COVID-19 epidemic, the Company go against the current, recorded with sound financial position.
Compared with revenue of RMB11.15 billion for the first half of the year, CIMC Vehicles’ revenue of RMB7.65 billion for the first three quarters unveiled substantial growth.
Potentially higher growth in the fourth quarter on overseas markets’ recovery
The global economy has been hardest hit this year by the once-in-a-century “black swan” event – COVID-19 pandemic. Though the mainland market already resumed operation and production in March, overseas markets had just started recovering, so their economic performances for the first three quarters inevitably impacted our results to some extent.
The announcement has showed that order volume from overseas markets had started rebounding from September.
According to data from US transportation intelligence FTR, September trailer order volume in the US “surged” to the third highest reading in history. It increased from 23,500 units in August 2020 to 52,000 units in September 2020, compared with only 18,600 units last September, up by 121.3% month-on-month and 179.6% year-on-year. Net trailer orders for October set an all-time record at 56,500 units, increased remarkedly by 68% year-on-year and up by 8.7% month-on-month.
The report also showed that most orders in September were dry van trailers and those for refrigerated vans were relatively strong, while orders for flatbed trailers continued to recover slowly. In October, ordered for dry vans trailer and refrigerated vans trailer continued to stay strong. Order for flatbed trailers improved and should reach their highest total this year.
CIMC Vehicles expects its revenue may increase at most to RMB24.0-26.5 billion in 2020 and may reach a new high.