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Jinpan International Ltd. (JST) Reports 47% Increase in Q2 Net Income

Jinpan International Ltd. (JST), a Chinese manufacturer of cast-resin transformers for wind and electrical power distribution, reported second quarter 2008 financial results today during regular trading hours. Revenues rose to$40.6 million, an increase of 26.7% year-over-year from $32.1 million. Net income rose to $6.0 million, or 74 cents per share, an increase of 47.4% from $4.1 million, or 51 cents per share, in the same period of 2007. No analysts currently cover the stock.

“We made excellent progress in our business in the second quarter,” said Zhiyuan Li, Chief Executive Officer of Jinpan. “We achieved sales increases for our core cast resin transformer products; we grew sales in both our domestic and international businesses; and demand for our wind power applications continued to gain healthy momentum. In spite of higher raw material costs, we were able to increase our gross margin 80 basis points largely due to increased sales of higher margin, customized cast resin transformer and wind power products.”

The company reiterated its financial guidance for fiscal 2008. Revenues are expected to be approximately $155 million, which represents a 30% increase over 2007 revenues of $119.6 million. Jinpan anticipates full-year net income of approximately $21.4 million, or $2.64 per share, a 30% increase compared to $16.4 million, or $2.06 per share for 2007.

Shares of JST closed at $32.50 on Friday and have traded in a range of $20.00 – $44.98 during the past year. The stock gained $2.19, or 6.7%, on the day to close at $34.69 on three times normal volume, after trading flat before earnings were released at 11:30 am. Shares were up as much as 10% intraday, hitting a high of $35.86. With 8.1 million shares outstanding, JST has a market cap of $280 million and a trailing twelve-month P/E of 14.5.

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