Zhonglu Company: Sharp Recovery In The 2Q21 Period

The concise profit of the company:

Zhonglu Co. Ltd. [900915:CH] is a Chinese based industrial company that focuses mainly in the manufacturing, marketing and distribution of different kinds of exercise equipment. Some of the exercise equipment that are been produced and marketed by the company are bicycles, exercise equipment, motorcycles, mopeds, bowling equipment, and other related parts and accessories. The company also engages in other businesses such as the development and management of real estate. The company conducts its business activities within the Chinese domestic regions and overseas with huge exportation rate. The company was established and issued a business license in October 2001 with its headquarter located at Shanghai, China. The executive head of the company is Shan Chen with up to 907 other employees currently working for the company.

Previous annual financial performance reports:

According the financial report posted on reuters platform, the financial performance reports of the company for the past three years signify significant growth in most of the major financial indicators after the strong fall experienced in the Fy17 period which was greatly attributed to the reduction in the production rate of the company. The businesses of the company experienced strong improvement in the production rate as a result of the increase in manufacturing factories and sales outlets. The financial performance report of the company which targeted the Fy20 period signifies a strong growth in most of the major financial indicators. According to the financial data of the company targeting the Fy20 period, some of the major financial indicators performed as follows;

Sales revenue: The financial result of the Fy20 period highlighted that the total revenue generated from business significantly improved as it increased to CNY734.40 million which represents an increment by 20.38% year-on-year when compared and analyzed from the CNY584.72 million that was reported in the Fy19’s financial result. During that period, the company’s production rate and sales rate rose significantly due to the increase in the manufacturing factories and sales outlets of the company.

Gross profit: The financial report of the company targeting the period in quote signifies that the gross profit during that period amounted to about CNY105.26 million which represents an increment by 36.26%% year-on-year when compared and analyzed from the CNY67.09 million that was reported in the Fy19’s financial result. The expenses rate of the company accounts for more than 80% quota of total revenue generated during that period. One of the strong factors that limit the amount of profit reported by the company is the steady growth or stable expenses incurred during business activities.

Total debt: The financial result been posted by reuters revealed significant negative growth as the total debt accumulated by the company amounted to about CNY80.11 million which represents a decrease by 27.86% year-on-year when compared and analyzed from the CNY111.06 million that was reported in the Fy19’s financial result.

Recent quarterly financial reports on Fy20 periods:

The financial performance of the company for the first two quarters of Fy20 period reveals that the company is improving above average as it recovered from a sharp fall during the 1Q21 period. The financial report shows that in 1Q21 period, the revenue generated from business amounted to about CNY137.41 million which represents a decrease by 13.21% year-on-year when compared and analyzed from the CNY158.34 million that was reported in the 4Q20’s financial result. The 2Q21’s financial result also showed that the total revenue generated from business amounted to about CNY210.84 million which represents an increment by 34.82% year-on-year when compared and analyzed from the CNY137.41 million that was reported in the 1Q21’s financial result.

Sources:

https://www.reuters.com/companies/600818.SS/financials/income-statement-annual

https://www.reuters.com/companies/600818.SS/financials/income-statement-quarterly

https://m.marketscreener.com/quote/stock/ZHONGLU-CO-LTD-9950106/company/

https://www.bloomberg.com/profile/company/900915:CH