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Haitian sees modest recovery in China's injection press market

By: Steve Toloken

August 20, 2013

Chinese injection machine maker Haitian said a "modest recovery" in the country's plastics molding equipment market helped fuel a 14 percent rise in company sales in the first half of the year, to 3.62 billion yuan ($590.8 million), but the firm was very cautious in describing how strong the recovery actually was.

China's overall plastic machinery market, the world's largest, fell modestly last year, dropping 3.5 percent. But the publicly-traded Haitian suggested in an Aug. 19 filing to Hong Kong Stock Exchange that the market may have turned a corner.

"The Chinese [injection molding machine] market became more stable and recorded [a] mild recovery in early 2013," said Haitian CEO Zhang Jianming. But he noted that "the market is still far from [a] full recovery and the macroeconomic indicators are still struggling."

The company also attributed its growth to the late 2012 launch of its second generation of machines in its Mars, Venus and Jupiter series.

It said profit in the first half rose 17 percent to 568.2 million yuan ($95.7 million), and said that was its second-highest ever mid-year financial results.

The Ningbo-based company, which is China's largest injection press maker and one of the world's largest, said China was its major growth engine, with sales in its home market rising 18.9 percent in the first half of the year to 2.47 billion yuan ($403.2 million), compared to the same period in 2012.

The company downplayed concerns that slower growth in China's macro-economy will cause problems.

"Despite the widespread concerns that the slowdown of GDP growth in China will hamper the demand of [plastic injection presses], we believe that the Chinese government's plans to rebalance the economy towards consumption-based growth will be positive for the development of the [injection molding machine] industry," it said.

The plastic injection molding machinery industry "ultimately is driven by an on-going urbanization and rising personal income levels which consequently lead to a rising consumption of plastic materials," it said.

Exports, which had made up for weak domestic demand in 2012, have taken a back seat this year, rising only 4.5 percent to 1.057 billion yuan ($172.5 million), although the company also said that figure was still a half-year record for it.

Haitian said Southeast Asia, Africa, the Middle East and the United States "delivered impressive growth," while Europe and emerging markets like Brazil and Turkey faltered.

The Middle East and Africa both reported particularly sharp increases, albeit from smaller bases, with the Middle East accounting for 9.8 percent of export sales in the first half of 2013, compared with 4.5 percent in the first half of 2012.

Similarly, Africa was 7.8 percent of export sales in the first half of this year, compared with 5.3 percent in the same period a year ago.

Still, globally it was hard to predict markets, it said.

"Notwithstanding the positive signs of initial recovery, the current global economies are still clouded with uncertainties," Zhang said, although the company also told the stock exchange that if current market conditions held, this year could exceed its previous sales record in 2010.

The company also said it was proceeding with construction of two previously announced new factories in Ningbo.