Weichai Power Disclosure and Overseas M&A Matters The company issued a 12-year interim report on August 31. The company realized operating income of approximately 27.06 billion yuan, a year-on-year decrease of 26.1%, and net profit attributable to shareholders of listed companies was approximately 1.90 billion yuan, a year-on-year decrease of 45.8. %, earnings per share of 1.14 yuan.
On September 3, 2012, the Overseas Cloth M&A deal was intended to subscribe for a 25% stake in German KION and a 70% interest in Linde Hydraulic Limited Partnership, amounting to a total of 738 million Euros.
The downturn of the industry and the pressure on the company's profitability The company's earnings decline in the first half of the year was mainly due to the continued slump in the prosperity of the heavy truck industry in the first half of the year. The simple calculation of the consolidated statement minus the parent company shows that the consolidated subsidiary has faced losses in the second quarter.
Intensified competition in the engine business and active attack in the company's adversity We estimate that the company's 9-10L engine business can still maintain its relative industry leadership within 2-3 years, but the Zhongbao has already shown that its share is declining and competition will continue to increase in the future. The large-scale M&A of the company at the moment illustrates two things: First, the company has fully realized the necessity and importance of business transformation; Second, the company has chosen to have a certain relationship with the main business between shrinkage and expansion strategy. The counter-cyclical expansion strategy does not rule out heavyweight mergers and acquisitions in the future.
M&A has a very limited impact on short-term earnings. In the long run, the acquisition is expected to increase the company's technological content. If domestic production is to be realized in the future, it will become another important source of corporate earnings. However, it may be difficult to understand the near-thirsty water, the short-term profit of the company's mergers and acquisitions is limited; from the domestic process of domestic hydraulic parts, the impact remains to be further confirmed.
The "hold" rating is expected to take into account the decline in the construction machinery industry and heavy truck industry, and is expected to fully diluted EPS 1.45 yuan in 2012, corresponding to the stock price of 18.0 yuan on September 3, the corresponding PE is 12.4, we give "hold" rating Risks hint at the macro economy and the industry's unexpected decline.
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