Kunming Machine Tool Expectations Lower

On the evening of July 10, the board of directors of Kunming Machine Tool Division reviewed and approved the proposal for adjustment of the 2013 annual financial budget report. The adjusted budget targets are: operating income of 1 billion yuan and net profit of 5 million yuan. The indicator for this adjustment is based on the company’s initial budget report at the end of March this year. The budget targets for this time are: income of RMB 1.25 billion and net profit of RMB 10 million.

The company's performance is closely related to the industry's economic conditions. The Kunming Machine Tool's lowering of performance expectations and the adjustment of its net profit target from 10 million to 5 million reflect the downturn in the machine tool industry in recent years.

According to public information, the domestic machine tool industry started from the second half of 2011, and the monthly production of CNC gold cutting machines has been reduced sequentially. By January 2012, it was even lower to the bottom. The monthly output of only 10,000 units fell 57.54% month-on-month and 37.73% year-on-year.

In 2012, the machine tool industry continued its slump in the second half of 2011. As of July 2012, public data showed that from January to July, the output of domestic metal cutting machine tools was 450,000 units, a decrease of 16% year-on-year. The output of CNC metal cutting machine tools was 120,000 units, a decrease of 18.37% year-on-year. The single-month output of the CNC gold-cutting machine experienced a slight rebound in the first quarter. It began to decline month-on-month in June. In July, the monthly output was only 17,000 units, a decrease of 17.24% from the previous month.

The sluggish market performance of the machine tool industry has directly affected the operating conditions of Kunming Machine Tools, coupled with the overcapacity of the company's own major precision products downstream industries, and the problem of high-end imports occupying space. The above reasons have caused Kunming Machine Tool to lose money. It is learned from Kunming Machine Tool Financial Report that in 2012, the company's operating income was 1.084 billion yuan, and the net profit loss was 73.22 million yuan. In the first quarter of 2013, the company's performance was also at a loss of 8.16 million yuan.

Regarding the status of the machine tool industry in 2013, Lange analyst Wang Guoqing said in an interview with reporters: “This year, China’s overall manufacturing industry is not booming. While the PMI index remains at 50%, it is falling month by month, reflecting the manufacturing The industry is in a mild state, and the machine tool industry in it is also the same."

Wang Guoqing analyzes that the industry and the economic trend are closely related. Under the condition that the overall economy is not very booming, companies in the industry can't do anything against the situation and get good profits. However, Wang Guoqing also believes that Kunming Machine Tool will usher in certain development opportunities after the second quarter. She said: "In order to achieve the goal of economic growth, we will issue relevant policies to ensure growth and steady growth after the second quarter. All industries will have a certain amount of demand based on these policies."

It is worth noting that, recently, Global Industry Analysts Inc. recently released a report entitled Machine Tools: Global Strategic Business Report. The report shows that the world's machine tool industry is in the first stage of rebound. It is estimated that by 2015, the global market value of the machine tool market will reach 80.7 billion US dollars.