Cosmos Machinery Ltd., one of China's largest injection press makers, said its first-half machinery sales fell 44 percent, though it now is seeing signs of a pickup in China and some overseas markets.
Hong Kong-based Cosmos said in a Sept. 23 filing with the Hong Kong Stock Exchange that those sales dropped to HK$215.6 million (US$27.8 million), and the company reported losses of HK$24.8 million (US$3.19 million), compared with profit of about HK$14 million (US$1.8 million) in the first half of 2008.
It did report indications of improvement, but was very cautious: Although there are signs of recovery in the market in the second half of the year, a number of uncertainties still exist, the company said.
Director Raymond Li said he is hopeful Cosmos will return to profitability in the second half of the year, and thinks monthly sales by year-end could be 15-25 percent below pre-crisis levels, which is an increase from current figures.
He said the company has trimmed staff and some production at its South China location in Dongguan, particularly as its export-oriented customers in that market continue to be very cautious in their capital equipment spending.
Demand for export machines fell by more than half in the period, although there have been signs of a pickup from South America and Southeast Asia, Li said.
The company's facility in East China, in Wuxi, held employment steady, he said.
The company overall reported it had 5,500 employees in all of its business units, including plastic product manufacturing and printed circuit boards. That figure is down from 6,000 a year ago.
One bright spot for Cosmos has been in energy-saving machines, while competition in the market for general-purpose machines has intensified and profit margins have fallen 7 percent, the company said.
Li said the company has aggressively shifted its machinery product mix toward energy-sippers, including its Se-series servo-driven pump machines, which it introduced at the Chinaplas exhibition in May.
Those machines now account for about one-third of sales, and Li said that figure could rise to 50 percent by year-end.
Cosmos developed the machines' servo pump on its own, instead of importing Japanese technology as it had in previous versions.
The company has been extending its home-grown servo equipment to some of its other machines, including rubber injection equipment and some of its sheet-metal equipment. Li said the company is also doing a feasibility study on a modified version of an all-electric press, but he declined to reveal details.
Cosmos is generally considered to be China's third-largest press maker, although it can be hard to get reliable figures outside of Cosmos and its two larger Hong Kong-listed rivals, Haitian International Holdings Ltd. and Chen Hsong Holdings Ltd.
Cosmos also has a division that makes plastic products such as packaging, cutlery and optical items at several factories throughout China. That unit reported sales fell 23 percent to HK$149.2 million (US$19.2 million), and profit dropped 85 percent to HK$781,000 (US$100,000).
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