World Precision: Wholly-owned subsi World CNC Machine Tools has been accredited as a "High/New Technology" and will stand to enjoy a preferential tax rate of 15% instead of the standard 25% from 2011 to 2013.
FY11 net profit in line with consensus although 4Q results disappoint. 4Q rev at Rmb238.2m -23.5% yoy -17.4% qoq, net profit at Rmb36.3m +35.2% yoy -14.5% qoq.
Revenue fall during the quarter was attributed to govt’s credit tightening policy and the economic slowdown. For 4Q11 sales of conventional stamping machines decreased by 55.7% and other high performance, high tonnage machines decreased by 8.1%. However co saw gross profit margin increase from 28.4% in 3Q11 to 33.6% due to higher ASP and product mix which contributed to net profit, slightly offset by increase in admin expenses.
Dividend of Rmb0.135 (approx $0.027) per share declared, higher than prev yr Rmb0.119. At FY11 EPS of Rmb0.45, co trades at P/E of 6.4x close to hist avg of 6.1x.