HONG KONG, April 12 China's second-largest
construction equipment maker Zoomlion Heavy Industry Science and
Technology Co Ltd warned on Friday its first-quarter
net profit may drop by up to 80 percent as slowing economic
growth cut sales.
Zoomlion's problems are endemic to a sector currently
overwhelmed by a mountain of unsold equipment but which had
boomed due to a surge in infrastructure spending during China's
massive financial stimulus programme in 2008.
Caterpillar Inc, the world's largest maker of
construction equipment, said in August it had started to export
Chinese-made machinery to the Middle East and Africa to offset
the dip in China's growth.
China's economy grew last year at its slackest pace since
1999, and demand for construction raw materials has been
sluggish so far this year. Most analysts expect the economy to
stage a steady recovery in 2013, driven internally by
infrastructure investment and household consumption.
Zoomlion, which competes with Sany Heavy Industry Co Ltd
, reported a net profit of 2.01 billion yuan in the
first quarter of 2012.
Its Hong Kong shares have dropped 27 percent so far this
year, lagging a 6.8 percent slide on the China Enterprises Index
of the leading Chinese listings in Hong Kong.
Zoomlion's Shenzhen-listed stock has fallen
almost 13 percent this year, against a 2.4 percent loss for the
CSI300 of the top Shanghai and Shenzhen listings.
Shares of the company slid in January after a report in
local newspaper Ming Pao Daily News said the company's sales
figures may have been exaggerated.
Zoomlion said at the time all allegations relating to its
financial information as reported in the newspaper were false,
groundless and misleading.