Sales were flat for Chinese plastics equipment maker Haitian International Holdings Ltd., but gross profit was up amid a pandemic that closed the company for a month in early 2020 and contributed to a global economic downturn.
China's largest maker of injection molding machines reported that sales increased 0.1 percent to a little more than 5 billion Chinese yuan ($728 million) in the six months ending June 30.
Still, the Ningbo-based company, which has 6,300 employees, realized a gross profit of almost 1.7 billion Chinese yuan ($244 million), up 6.4 percent compared with the first half of 2019.
The gross profit margin increased to 33.6 percent, according to an Aug. 18 earnings report, which points to improvements in operational efficiency, a decrease in raw material price and an increase of yuan-denominated export sales that resulted from exchange rate fluctuation.
The earnings report says the pandemic dealt a severe blow to an already fragile global economy, but prompt and effective controls in China coupled with economic policies allowed businesses to resume work and production in the spring.
Haitian launched product updates and maintained domestic sales of 3.3 billion yuan ($482 million), the report says.
"From the second quarter of 2020, the company has fully rolled out the third-generation machines under years of R&D work, which has been widely recognized in the market. In virtue of the smooth transition from the second-generation to the third-generation machines … the company's domestic sales still managed to make a remarkable achievement despite suffering a monthlong shutdown in the first quarter," the report says.
Sales in regional markets overseas mostly declined because of the pandemic, but the company saw "significant" increases in Turkey, Vietnam and the Philippines. Export sales were up 0.1 percent to 1.5 billion yuan ($224.8 million).
Haitian reported sales of its main product line, the Mars series machines, jumped 15.3 percent to 3.6 billion yuan ($530.7 million) in the first half of 2020 to meet increased demand for pandemic-related medical and consumer products, including packaging.
However, sales of Zhafir all-electric presses fell by 26.7 percent in the same period due to weakening demand in automotive and other industries.
Similarly, sales of Jupiter two-platen machines dropped 29.9 percent because of slowdowns in the automotive, household appliance and other industries.
Looking ahead, company officials are optimistic about the outlook for the domestic economy in the second half of 2020 — but not beyond.
"In the second half of the year, as the U.S. presidential election is approaching, campaigns of key issues surrounding China will bring more disadvantages to the domestic economy," the report says. "Meanwhile, trade disputes, deglobalization and geopolitical crises among countries will continue to bring many uncertain risks to the global economy in the second half of the year. The three major economic organizations and the world's major investment banks have substantially lowered their economic expectations of the world and major economies."