Swings And Roundabouts At China Enterprises Ltd.
Consolidated results from 2001 for China Enterprises Ltd. show a varied year for the group with as many ups as downs. The company states that Chinese tyre prices fell by 3-5 per cent during the year due to 2001 high inventories and high levels of competition.
Although raw material costs remained low, warranty claims were higher than expected – a result, according to the company of end-users overloading their vehicles.The Company’s gross margin fell from 9.90 per cent for 2000 to 8.
87 per cent for 2001. The decline was substantially due to Yinchuan CSI, whose margin was adversely affected by weak selling prices and provisions for warranty claims. On the other hand, Hangzhou Zhongce increased its margin to 11.
8 per cent in 2001 compared to 10.1 per cent for the previous year.Revenues for 2001 were up by 20 per cent on 2000, mainly due to increases in sales of radial car tyres in the domestic market.
Export sales though dropped by 3.7 per cent in value.China Enterprises sold 6.
2 million vehicle tires, 34 million bicycle tires and 2.5 million wheelbarrow tires in 2001..