Ming Yang profits slump again

CHINA: Ming Yang saw its profits fall by 29% as its margins shrunk and revenues declined for the third year running.

Ming Yang produces a two-blade 3MW turbine
Ming Yang produces a two-blade 3MW turbine

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However, the Chinese manufacturer's revenue only fell by 1.7% to CNY 2.8 billion ($453 million). It was the fall in gross margin from 12.8% in 2012 to 9.2% last year that depressed profits to CNY 262.3 million.

This was as a result of significant increases in administrative, selling and distribution, and R&D expenses. Only finance expenses declined slightly.

The poor results are measured against an already low base, with the company posting a 63% fall in profit in 2012.

Worryingly, the end of the year saw a downturn in performance, with a revenue decrease of 39% in the last quarter pushing the company into the red with a gross loss of CNY 20 million. This compares with a profit of CNY 76.2 million over the comparative period in 2012.

Ming Yang has been trying to break out of China in order to hedge against the vagaries of its domestic market. In November the company won an order for turbines with a capacity of 200MW for a wind farm in Romania.

However, the company remains reliant on installations in China and, despite a renaissance for the wind industry in the country, Ming Yang appears to have failed to capitalise on this so far.

But Ming Yang CEO Chuanwei Zhang said: "As the market continues to recover in China, we have increased our order intake substantially with total new orders signed in 2013 amounting to more than 1.8GW, with a total order backlog of 3GW"

This does represent a healthy trend, with the backlog standing at 2.1GW a year previously.

During the fourth quarter of 2013, Ming Yang entered into sales contracts for projects with a capacity of 809MW, representing 234 units of its 1.5MW turbine, 214 units of 2MW machine and ten 3MW turbine.

Shares in the firm fell 8% yesterday on the New York Stock Exchange in expectation of poor results.

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