August 28, 2012 at 06:28 AM EDT
MY Reports Second Quarter 2012 Unaudited Results

ZHONGSHAN, China, Aug. 28, 2012 /PRNewswire-Asia/ -- China Ming Yang Wind Power Group Limited ("Ming Yang" or the "Company") (NYSE: MY), a leading wind turbine manufacturer in China, today announced its unaudited financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Financial Highlights:

  • Total wind turbine generators ("WTGs") for which revenue was recognized amounted to an equivalent wind power project output of 198MW, or 99 units of 1.5MW WTGs and 17 units of 2.5-3.0MW SCD WTGs, a decrease of 46.1% compared to Q2 2011.
  • Total revenue was RMB798.0 million (US$125.6 million), a decrease of 43.2% compared to Q2 2011.
  • Gross profit was RMB115.9 million (US$18.2 million), a decrease of 56.6% compared to Q2 2011. Gross margin was 14.5%, compared to 19.0% in Q2 2011.
  • Total comprehensive loss was RMB27.5 million (US$4.3 million), compared to a comprehensive income of RMB74.6 million in Q2 2011.
  • Basic and diluted loss per share was RMB0.25 (US$0.04), compared to a basic and diluted earnings per share of RMB0.67 in Q2 2011.

Recent Developments

  • Strategic Partnership with Reliance Group - On July 2, 2012, the Company formed a strategic partnership with Reliance Group, the largest private sector power company in India, to co-develop a large portfolio of clean energy projects. The strategic partnership is expected to help the Company expand into the Indian and Southeast Asian markets.
  • Joint Venture with Huaneng Renewables Corporation Limited - On July 12, 2012, the Company announced that it plans to form a joint venture with Huaneng Renewables Corporation Limited (HKEx Stock Code: 0958) specializing in the development of wind and solar power projects in China and overseas markets. 
  • Share Repurchase Program – During the second quarter of 2012, the Company did not make any repurchases under its share repurchase program. Since the inception of the program, approved by the board of directors of the Company on August 15, 2011, the Company has repurchased 3,153,897 ADSs, representing 3,153,897 ordinary shares, from the open market for an aggregate consideration of approximately US$8.6 million (excluding commissions).
  • Chairman's Purchase - Mr. Chuanwei Zhang, the Chairman and Chief Executive Officer of Ming Yang, has purchased 2,456,206 ADSs, representing 2,456,206 ordinary shares from the open market for an aggregate consideration of approximately US$3.7 million (excluding commissions), as disclosed in Mr. Zhang's Schedule 13D filed with the Securities and Exchange Commission on August 16, 2012.

Mr. Zhang commented, "Our financial performance in the second quarter improved over the previous quarter, with gross margin improving by approximately 4.5% and operating margin turning from loss of RMB77.6 million into a profit of RMB6.4 million (US$1.0 million). As China's wind power industry continues to consolidate, Ming Yang is continuing to enhance its products and services in order to provide its customers with the best solutions in wind energy and strengthen its position in the market. We aim to deliver our products and services with higher power generation, higher efficiency and better reliability at lower cost of energy."

"Furthermore, we plan to continue executing our key strategic initiatives including broadening off-shore wind applications, pursuing overseas markets, utilizing innovative business models such as finance leasing, developing high technologies such as new material applications, and other research and development initiatives. We believe such initiatives will help us offer superior products and services to our customers."

Mr. Zhang concluded, "As the wind power industry in China continues to face challenges, we are investing for now and for the future. We believe that our advanced product and service offerings will continue help Ming Yang capitalize on market opportunities both in China and overseas markets and enhance its competitiveness during this market downturn."

Second Quarter 2012 Unaudited Financial Results

Revenue

Revenue in the second quarter of 2012 was RMB798.0 million (US$125.6 million), representing a decrease of 43.2% from RMB1,405.5 million in the corresponding period in 2011. WTGs for which revenue was recognized amounted to an equivalent wind power project output of 198MW, or 99 units of 1.5MW WTGs and 17 units of 2.5-3.0MW SCD WTGs, compared to 367.5MW, or 245 units of 1.5MW WTGs, for the corresponding period in 2011. The decrease in revenue in the second quarter was primarily due to a decrease in average selling price ("ASP") and overall decreased market demand for WTGs in China.

During the second quarter, the Company installed 66 units of WTGs which are commissioned and generating electricity through its EPC program.  Funding has been committed by local banks to the project developers, but is subject to final approval. As a result, the Company did not recognize expected revenue of RMB319.0 million for these WTGs during the quarter.

Gross Profit and Gross Margin

Gross profit in the second quarter of 2012 was RMB115.9 million (US$18.2 million), representing a decrease of 56.6% from RMB267.2 million for the corresponding period in 2011. Gross margin in the second quarter of 2012 was 14.5%, compared to 19.0% for the corresponding period in 2011. The decline was a result of lower ASP and higher average production cost. Compared with the first quarter of 2012, the gross margin, however, improved 4.5%, primarily due to the increase in ASP for WTGs recognized in the second quarter of 2012.

Selling and Distribution Expenses

Selling and distribution expenses were RMB24.5 million (US$3.9 million) for the second quarter of 2012, compared to RMB56.0 million for the corresponding period in 2011, representing a decrease of 56.2%, primarily due to a decrease in transportation expenses as a result of delivery of fewer number of WTGs during the period.

Administrative Expenses

Administrative expenses were RMB77.1 million (US$12.1 million) for the second quarter of 2012, compared to RMB58.4 million for the corresponding period in 2011, representing an increase of 32.0%, primarily due to a provision of trade receivables of RMB22.4 million.


Research and Development Expenses

Research and development expenses were RMB22.7 million (US$3.6 million) for the second quarter of 2012, compared to RMB27.0 million for the corresponding period in 2011, representing a decrease of 15.8%. This decrease was primarily due to the cost of materials used in a benchmark test relating to our 2.5-3.0MW SCD WTG research and development incurred in the second quarter of 2011.


Net Finance Expense

Net finance expense was RMB17.6 million (US$2.8 million) for the second quarter of 2012, compared to a net finance expense of RMB25.0 million in the corresponding period of 2011.

Profit/Loss Before Income Tax Expense

Loss before income tax expense was RMB19.8 million (US$3.1 million) for the second quarter of 2012, compared to a profit before income tax expense of RMB107.8 million in the corresponding period of 2011.

Income Tax Expense

Income tax expense was RMB11.2 million (US$1.8 million) for the second quarter of 2012, compared to an income tax expense of RMB22.9 million in the corresponding period of 2011, representing a decrease of 51.1%.

Total Comprehensive Income/Loss and Earnings/Loss Per Share

Total comprehensive loss for the second quarter of 2012 was RMB27.5 million (US$4.3 million), compared to a total comprehensive income of RMB74.6 million in the corresponding period of 2011.

For the second quarter of 2012, basic and diluted loss per share was RMB0.25 (US$0.04), compared to basic and diluted earnings per share of RMB0.67 for the corresponding period in 2011.

Cash and Cash Equivalents

Cash and cash equivalents as of June 30, 2012 were RMB1,044.6 million (US$164.4 million), compared to RMB2,282.4 million as of  March 31, 2012. The decrease was primarily due to the payment for trade and other payables of RMB861.6 million, investments in EPC projects of RMB170.0 million, and the investment in Huadian Energy Corporation Limited of RMB189.8 million in its initial public offering and listing on the Hong Kong Stock Exchange.

Business Update

Order Book Update

New Sales Contracts – During the second quarter of 2012, Ming Yang entered into sales contracts for wind power projects with a total output of 99MW, representing 66 units of 1.5MW WTGs.

Order Backlog – As of June 30, 2012, the Company's order backlog amounted to 2.1GW representing 1,251 units of 1.5MW WTGs, 67 units of 2.5-3.0MW SCD WTGs and 1 unit of 6.0 MW SCD WTG. Cumulative signed orders since its inception amounted to 5.3GW, representing 3,380 units of 1.5MW WTGs, 84 units of 2.5-3.0MW SCD WTGs and 1 unit of 6.0MW SCD WTG.

Note to the Financial Information

The preliminary unaudited consolidated statements of comprehensive income and consolidated statements of financial position accompanying this press release have been prepared by management using International Financial Reporting Standards, or IFRSs. This preliminary unaudited financial information is not intended to fully comply with IFRSs because it does not present all of the financial information and disclosures required by IFRSs.

Currency Conversion

Solely for the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB6.3530 to US$1.00, the noon buying rate in New York for cable transfers of Renminbi for U.S. dollars on June 29, 2012 as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollar amounts at such a rate or at any other rate.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "goal," "strategy" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Ming Yang's control, which may cause Ming Yang's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Ming Yang's filings with the U.S. Securities and Exchange Commission. Ming Yang does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Conference Call

Ming Yang will host an earnings conference call on Tuesday, August 28, at 8:00 am Eastern Time (5:00 am Pacific Time / 8:00 pm Beijing Time). The management team will be on the call to discuss the Company's results, operating performance and business outlook and to answer questions.

To access the conference call, please dial:

United States:                     

+1-86-6519-4004

International (toll):               

+1-71-8354-1231

China, Domestic Mobile:     

400-620-8038

China, Domestic:                

800-819-0121

Hong Kong:                        

800-930-346

Please ask to be connected to Q2 2012 China Ming Yang Wind Power Group Earnings Conference Call and provide the following passcode: Ming Yang

Ming Yang will also broadcast a live audio webcast of the conference call. The broadcast will be available by visiting the "Investor Relations" section of the Company's web site at http://ir.mywind.com.cn.

Following the earnings conference call, an archive of the call will be available by dialing:

United States:                            

+1-71-8354-1232

International:                              

+61-2-8235-5000

China:                                       

400-692-0026

Hong Kong:                              

800-901-596

Passcode:                                

1106-8636

The replay will be archived for seven days following the earnings announcement until September 4, 2012.

About China Ming Yang Wind Power Group Limited

China Ming Yang Wind Power Group Limited (NYSE: MY) is a leading and fast-growing wind turbine manufacturer in China, focusing on designing, manufacturing, selling and servicing megawatt-class wind turbines. Ming Yang produces advanced, highly adaptable wind turbines with high energy output and provides customers with comprehensive post-sales services. Ming Yang cooperates with aerodyne Energiesysteme, one of the world's leading wind turbine design firms based in Germany, to co-develop wind turbines. In terms of newly installed capacity, Ming Yang was a top 10 wind turbine manufacturer worldwide and the largest non-state owned wind turbine manufacturer in China in 2011.

For further information, please visit the Company's website: ir.mywind.com.cn

For investor and media inquiries, please contact:

China Ming Yang Wind Power Group Limited

Beatrice Li
T: +86-760-28138898
Email: ir@mywind.com.cn
http://ir.mywind.com.cn

Fleishman-Hillard

Pamela Leung
T: +852-2530-0228
Email: mingyang@fleishman.com

 


 

CHINA MING YANG WIND POWER GROUP LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts expressed in thousands, except share and ADS data)




For the three months ended



June 30,


June 30,


June 30,




2011


2012


2012




RMB'000


RMB'000


USD'000










Revenue


1,405,452


797,957


125,603


Cost of sales


(1,138,297)


(682,088)


(107,365)


Gross profit


267,155


115,869


18,238


Other income


7,214


14,821


2,333


Selling and distribution expenses


(56,032)


(24,541)


(3,863)


Administrative expenses


(58,371)


(77,055)


(12,129)


Research and development expenses


(26,950)


(22,691)


(3,572)


Profit from operations


133,016


6,403


1,007


Finance income


14,369


24,235


3,815


Finance expense


(39,333)


(41,823)


(6,583)


Share of loss of associates


(289)


(8,649)


(1,361)


Profit/(loss) before income tax expense


107,763


(19,834)


(3,122)


Income tax expense


(22,946)


(11,226)


(1,767)


Profit/(loss) for the period


84,817


(31,060)


(4,889)










Other comprehensive (loss)/income for the period :








Foreign currency translation differences -  foreign operations


(10,185)


3,596


566


Total comprehensive income/(loss) for the period


74,632


(27,464)


(4,323)










Profit/(loss) attributable to:








Shareholders of the Company


84,196


(30,155)


(4,747)


Non-controlling interests


621


(905)


(142)




84,817


(31,060)


(4,889)


Total comprehensive income/(loss) attributable to:








Shareholders of the Company


74,011


(26,559)


(4,181)


Non-controlling interests


621


(905)


(142)




74,632


(27,464)


(4,323)


Basic and diluted earnings/(loss) per share (1)


0.67


(0.25)


(0.04)


_____________________________________

(1) The calculation of the basic earnings/(loss) per share is based on the profit/(loss) attributable to the shareholders of the Company and the weighted average of ordinary shares outstanding during the relevant period.

 

 

CHINA MING YANG WIND POWER GROUP LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Amounts expressed in thousands)



As of
December 31, 2011


As of
June 30, 2012



RMB '000


RMB '000


USD '000








Assets







Non-current assets







Property, plant and equipment


497,777


545,231


85,823

Intangible assets


74,837


69,956


11,011

Lease prepayments


207,321


237,936


37,453

Investments in associates


43,637


34,812


5,480

Investments in jointly controlled entities


255,870


398,201


62,679

Trade and other receivables


462,961


487,690


76,765

Prepayments


40,290


118,230


18,610

Deferred tax assets


134,386


160,553


25,272

Total non-current assets


1,717,079


2,052,609


323,093








Current assets







Fair value through profit or loss


-


192,119


30,241

Inventories


1,837,821


1,777,912


279, 854

Trade and other receivables


5,203,995


4,632,507


729,184

Prepayments


91,022


115,413


18,167

Other current assets


5,239


21,863


3,441

Pledged bank deposits


252,795


100,137


15,762

Cash and cash equivalents


1,339,496


1,044,627


164,430

Total current assets


8,730,368


7,884,578


1,241,079

Total assets


10,447,447


9,937,187


1,564,172








Equity







Issued share capital


850


850


134

Reserve for own shares


(42,108)


(55,113)


(8,675)

Capital reserves


3,627,441


3,650,024


574,535

Translation reserves


(58,358)


(55,526)


(8,740)

Retained earnings


253,711


110,216


17,349

Total equity attributable to shareholders of the Company


3,781,536


3,650,451


574,603

Non-controlling interests


117,153


114,153


17,968

Total equity


3,898,689


3,764,604


592,571








Liabilities







Non-current liabilities







Bond payable


-


983,191


154,760

Deferred tax liabilities


2,209


2,128


335

Provisions


206,293


231,557


36,448

Trade payables


120,243


59,012


9,289

Deferred income


175,215


248,717


39,150

Total non-current liabilities


503,960


1,524,605


239,982








Current liabilities







Trade and other payables


4,595,516


3,388,321


533,342

Short-term bank loans


632,000


591,680


93,134

Income tax payable


35,908


(4,423)


(696)

Provisions


146,774


138,343


21,776

Deferred income


27,783


29,880


4,703

Deferred revenue


606,817


504,177


79,360

Total current liabilities


6,044,798


4,647,978


731,619








Total liabilities


6,548,758


6,172, 583


971,601

Total equity and liabilities


10,447,447


9,937,187


1,564,172

 

SOURCE China Ming Yang Wind Power Group Limited

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