China Shoto plc
The Company is one of China's leading private companies engaged in the design development manufacture and sale of industrial batteries and power supply systems.
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China Shoto issues profit warning due to lower domestic demand for back-up batteries
In today's AGM statement, China Shoto (LON:CHNS) warned investors of a 15% year-on-year drop in revenue and profitability during the first 5 months of the year. The company said that China's major telecoms operators have reduced investment in infrastructure projects, which has led to reduced domestic demand for back-up battery products.
Furthermore, in terms of its revised strategy, China Shoto also cautioned that it has experienced significant competition in overseas markets and global markets remain fragile. The company also noted that exports and margins have become less competitive as the Renminbi has strengthened.
China Shoto said it had hoped that recovery in global markets could mitigate the fall in domestic demand, as the company developed export opportunities.
On the London Stock Exchange, investors have taken the news badly, as
China Shoto share plunged to an intraday low of 195p. After stabilising
slightly the back-up battery manufacturer was last changing hands at
217.5p - down 35.6%.
In April, in FY09’s results statement, China
Shoto told investors that it expected that China's major telecoms
operators would shift their investment priorities from infrastructure
construction to product marketing and development.
“The board
is confident of remaining the largest back up battery manufacturer in
China. It is well placed with its large R&D facilities providing
improved products”, China Shoto executive chairman Yang Shanji stated.
“The
company continues to expand its environmental activities and is
progressing with its major lead recycling programme which will position
the company favourably. The board remains committed to developing its
strategy of developing international sales.”
