China Wind Systems, Inc.
China Wind Systems supplies forged rolled rings to the wind power and other industries and industrial equipment to the textile and energy industries in China.
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China Wind Systems firms after second quarter net revenue climbs nearly 40%
Shares in China Wind Systems (NASDAQ:CWS) firmed in early deals after the company reported a near 40% increase in second quarter net revenue to US$19 million.
The supplier of forged components and other industrial equipment to China's textile and wind power industries benefited from strong growth for its wind power products; the company reported a 152% increase in sales exclusively to the wind power industry to US$9.2 million, or nearly 49% of net revenue.
Overall, revenues for forged products to all industries represented 72.5% of total group sales, and grew by 40.5% year over year. Revenue from the Company's dyeing and finishing equipment segment increased 37.6% to $5.2 million, or 27.5% of net revenues, compared to $3.8 million, or 28% of net revenue, for the second quarter of 2009
Group operating income jumped 59.4% to US$4 million, while EBITDA (earnings before interest, taxes, depreciation and amortization) rose 46.4% to US$4.7 million. Net income climbed an impressive 69.8% to US$3 million, or 12 cents per diluted share. Gross margin increased 3.3 percentage points to 26.2%, compared to 22.9% for the same period in 2009.
"During the quarter, our forged products continued to experience strong growth, led by a significant increase in demand from our wind power customers," commented Jianhua Wu, Chairman and CEO of China Wind Systems.
As of June 30, 2010, China Wind Systems held cash and cash equivalents of $1.4 million, accounts receivable of $6.6 million, and working capital of $4.9 million.
Looking ahead, the components provider said it was planning to add an additional production line to its current forging facility to meet order flow. China Wind Systems maintained its full year guidance of revenues between US$76.5 million and S$85 million and net income between $15.5 million and $16.3 million.
"The Company anticipates stronger demand for both its traditional forged products and ESR forged products in 2010, as management expects stronger sales of precision forged products used in large wind turbines," it added.
