Precision Tsugami (China) Corporation (1651) H2 2024 earnings summary

Executive summary

• Revenue and net profit declined by 22.9% and 17.1% year-over-year, respectively, due to weak demand in the domestic manufacturing sector and intensified price competition.

• Gross profit margin improved to 28.7% from 25.6% last year, reflecting successful cost reduction and efficiency initiatives.

• The company continued to invest in production expansion, with a new plant in Pinghu expected to be operational in July 2024.

Financial highlights

• Revenue: RMB3,119.7 million (down 22.9% YoY); net profit: RMB480.0 million (down 17.1% YoY).

• Gross profit: RMB895.5 million (down 13.6% YoY); gross margin: 28.7% (up 3.1 percentage points YoY).

• Basic EPS: RMB1.26 (down from RMB1.52 YoY).

• Cash and cash equivalents: RMB678.0 million as of 31 March 2024.

• No outstanding bank loans; gearing ratio at 0.15%.

Outlook and guidance

• Management expects a recovery in demand for CNC machine tools, with signs of improvement in March and April 2024.

• The new Pinghu plant and expanded Anhui capacity are expected to boost production by 3,000–4,000 units.

• The company remains confident in long-term growth, driven by industrial upgrades and government support.