30 Mar 2020

Crosby Research: China Lesso (2128 HK/BUY): A solid set of FY19 results

Benefitted by the steady growth in demand from infrastructure construction last year, China Lesso’s turnover rose by 11.0% YoY to Rmb26.3bn. Net profit grew by 21.4% YoY to Rmb3.0bn. In FY19, China Lesso’s gross margin expanded by 2.4ppt to 28.6% on the back of economies of scale, continued expansion of production capacity of its plants and effective strategy in procurement of raw materials. The company also increased its automation and intelligent production application adoption which helps to promote large-scale production, which in turn improved efficiency.