Half year sales increase at Lexmark, and with printer consumables and the chip business. Acquisitions continue with three new companies acquired in H1 of 2017. Losses reported from the merger of subsidiaries acquired in 2016.
Ninestar Corp, formerly known as Apex Technology, released its results for first half year 2017 posting an operating income of RMB 1,112 billion ($167,820 million/ €141,891 million) for the reporting period.
The company said in its financial statement that in the first half of 2017, the company focused resources in the integrated circuit (chip) and printer consumables business to expand the market, research and development, and use the brand and channel advantages to further enhance the company’s competitiveness and business growth.
The company continues with the Lexmark ISS business integration and to realise the full potential of synergies between the companies. This included the selling of Lexmark’s software business and the sale of loss-making assets and the recovery of large amounts of cash, reducing Ninestar Corporation’s asset-liability ratio, and further optimize the company’s capital structure.
Ninestar Corp posted a total operating income of RMB 1,112 billion ($167,820 million/ €141,891 million), an increase of 678.14 percent over the same period of last year. The statement says that increase in income was due to the increase in sales income of its overseas subsidiaries and the business acquired in 2016.
The net profit for the first half year was RMB -1,015 billion (-$153,143 million/ -€129,523 million), a decrease of 536.57 percent over the same period of last year. The company says the main reason for the decrease was due to the merger of the overseas subsidiaries acquired in 2016.
The integrated circuit chip business managed to achieve substantial growth over the same period last year and showed an increase of operating income of about 30 percent and net profit increase of about 40 percent.
The printing supplies business showed an operating income increase of about 15 percent and net profit increase of about 14 percent over the same period of last year.
Ninestar Corp says in its statement that through the implementation of VIP customer management and improved service quality, new customers have significantly increased on the toner cartridge sales side and accounted for 7.7 percent of the amount of sales in the first half of 2017. The domestic market grew 37 percent on the drum side. Opening up high-end store channels, the US network marketing has also made significant progress.
After the completion of Lexmark’s acquisition, the company began a global strategic integration. In the first half of 2017 Lexmark unit sales increased by 19.7 percent (same period last year was 7.7 million units) however the consumables sales decreased slightly.
Looking forward, the statement said that at the end of 2017 Lexmark will be introducing new products that will enrich the product line. Also the company will be looking to use the Lexmark expertise of print management services, industry solutions for the medical, financial, insurance, manufacturing and other industries to introduce customised solutions and is looking to introduce these in the Chinese market. Ninestar Corp is looking to grow the printer business management and specifically increase the Chinese market share.
Ninestar Corp will gradually move the manufacturing of Lexmark products to Zhuhai. The first of Lexmark supplies have been produced in Zhuhai which was the first phase of the migration and has been successfully completed. On the basis of a stable production, the company will gradually increase production capacity, expand production, looking to reach 8 million to 10 million units within the next two years.
During the reporting period, the company made breakthroughs in the industrialization of phase change storage (PCRAM) with the Shanghai Microsystems, SMIC and SMIC Semiconductor Manufacturing Co., Ltd., and developed the printer based on PCRAM chips, which was obtained at 130 nm technology node.
According to the notes in the statement, Ninestar Corp acquired in cash three companies. In total 51 percent stake in each with the transaction amounting to RMB 55,641 million ($8,393 million/ €7,104 million).
In May 2017 the company finalised an acquisition plan and three companies were acquired and the transaction was completed on 14 June 2017. Local research indicates that the acquired companies in question are Zhuhai Xinwei Technology Co., Ltd, Zhuhai Zhongrun Jingjie Printing Technology Co., Ltd and Zhuhai City Extension Good Technology Co., Ltd.
During the reported period, the company actively promoted the sale of Lexmark ES projects. On 2 May 2017 (New York time), Lexmark International, Inc., a subsidiary of the company, signed a “purchase agreement” with the buyer to sell Lexmark’s ES business with approximately $1.35 billion (€1.14 billion) in cash. The sale completed in July this year.