Hong Kong, Apr 23, 2009 - (ACN Newswire) China South Locomotive & Rolling Stock Corporation Limited ("CSR" or the "Company"; stock code: 1766) is pleased to announce the annual results of the Company and its subsidiaries (collectively the "Group") for the year ended 31 December 2008 (the "Reporting Period"). During year 2008, revenue of the Company increased by 30.93% to RMB35,093 million as compared to last year. Profit before tax increased by 103.65% to RMB1,931 million as compared to last year. Net profits attributable to shareholders of the Company increased by 125.77% to RMB1,384 million as compared to last year. Basic earnings per share increased by 76.40% to RMB15.7 cents. The board of directors recommended the payment of a final dividend of RMB0.032 yuan per share for the year ended 31 December 2008.
Reviewing the anuual results of 2008, Mr. Zhao Xiaogang, Chairman of the Board and Executive Director of the Company, said, "In recent years, the State has increased investment in infrastructure construction of rail transportation, which provided a favourable platform to the Company for its development. In 2008, taking advantages of the increased investment of the State in equipment of rail transportation and greater efforts on development of new business and overseas market expansion by the Company, the Company's business volume and profitability increased defying market gravity."
During the Reporting Period, the Company gained tremendous growth in business scale and the increase in revenue was mainly attributable to the Company's proactive effort in seizing development opportunities arising from the rapid development in the PRC rolling stock manufacturing market whilst making full use of its technological renovation to further new product development and investment in technological renovation, thereby leading to a surge in revenue for the Reporting Period on basis of extended business foothold and significant growth in market sales. Meanwhile, the increase in the gross profit and gross profit margin of the Company in 2008 was primarily attributable to an outpaced growth in revenue as compared with that of the cost of operation as a result of the Company's reasonable and effective control on costs whilst expanding its business and boosting its revenue, leading to an overall increase in the Company's gross profit and gross profit margin.
The Company gained rapid growth in all business segments during the Reporting Period. Among which, the revenue generated from the locomotive product line is the important drive of the Company's revenue. In 2008, the revenue generated from locomotive product line was RMB8,137 million, representing an increase of 14.82% as compared to last year. The main reasons for the increase was primarily attributable to a more earnest market demand arising from the railway development in the PRC and a significant increase in unit price subsequent to product upgrades.
In 2008, revenue generated from Company's passenger carriage product line decreased by 4.19% to RMB3,265 million as compared to last year. It is primarily due to the decrease in the total revenue from passenger carriage in light of the substitution of locomotive for part of the conventional passenger carriages.
Revenue generated from the Company's freight wagon product line saw a modest growth in 2008 as compared to last year. The revenue was increased by 2.8% to RMB9,451 million as compared to last year. It is because of the significant increase in revenue from manufacturing operations given mounting demand for freight wagon products in domestic and overseas markets as well as higher unit price upon technological renovation of freight wagons, which was nonetheless partly offset by a substantial decrease in revenue from refurbishment after shifting to K2 renovation business.
In 2008, revenue generated from MU product line of the Company increased significantly as compared to last year. The revenue was amounted to RMB5,680 million, representing an significant increase of 111.95% as compared to last year. Such significant increase was primarily attributable to soaring market demand as a result of the development of high-speed railways in the PRC, coupled with the increase in unit price because of product upgrades.
For the Company's rapid transit vehicle product line, the revenue generated in 2008 was RMB 2,574 million, representing an increase of 51.50% as compared to last year. The revenue increased substantially as compared with that of last year was primarily attributable to the increase in the rapid transit vehicle sales and production of the Company as the rapid development in the rapid transit vehicle industry ushered in a steady upswing of demand.
Apart from the above, revenue from other business increased significantly as compared with that of last year. The revenue was increased by 118.69% to RMB 5,986 as compared with last year. Such increase was primarily attributable to the increase in revenue from proprietary rolling stock related technologies under the Company's proactive development in this field by means of its technological competence and edges.
Looking ahead, Mr. Zhao concluded, "According to 'The Mid and Long-term Plans for Railway Network' as adjusted in 2008, the national railway operational length in the PRC by 2010 will be extended to over 90,000 km. By 2020, the national railway operational length will be extended to over 120,000 km. The railway industry is poised to enjoy rapid momentum. In order to cater the fast paced development of the industry, CSR will pool more resources in scientific research and establish a system of research, development, production and manufacturing that aligns with advanced international standards. Through the introduction, assimilation, absorption, reinvention and autonomous innovation of technology, the level of rolling stock designs, manufacturing and products have been up to advanced international standards of the same period and evolved with such advanced standard simultaneously. The Company aims to become the top three rolling stock manufacturers around the world, creating CSR as a highly renowned brand in the industry worldwide. The Company's goal in mid to long term is to be one of the Global 500 with CSR as a famous international brand in the industry."
About China South Locomotive & Rolling
The Company is one of the largest rolling stock manufacturers and solutions providers in the world. CSR was also the largest rolling stock manufacturer and solutions provider in China in terms of revenue in 2008. CSR's main businesses lie in the research and development, manufacturing, sales, refurbishment and leasing of rolling stock, including locomotives, passenger carriages, freight wagons, multiple units ("MUs"), rapid transit vehicles and key related components as well as other businesses that utilise proprietary rolling stock technologies.
Source: China South Locomotive & Rolling
Contact:
Wonderful Sky Financial Group Limited Joanne Chan / Katy Chan / Terence Wong / Ivan Kau / Gigi Chan Tel:(852) 2851 1038 Fax:(852) 2815 1352 Email:joannechan@wsfg.hk / katychan@wsfg.hk / terencewong@wsfg.hk / ivankau@wsfg.hk / gigichan@wsfg.hk
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