05 Apr 2024

2023 was a recovery year for China Lesso from the pandemic outbreak against the backdrop of interest rate hikes, decreased investment and the ongoing geopolitical conflicts in 2023. The company still managed to register a marginal increase of 0.3% YoY in turnover to Rmb30.9bn. Gross margin remained flat at the level of 26.4% compared to 26.8% in FY22. The marginal change in GPM were mainly due to i) increase in total sales volume of plastic piping systems business which benefited from the timely adjustments to its ASP on the back of the decline in material cost and ii) change in product mix as increase in revenue contribution from other business with lower GPM profile. NP consequently decreased by 6.1% YoY to Rmb2.4bn. China remains as the core market of the company by accounting for 91.7% of the total sales.

CROSBY Research – China Lesso (2128 HK/BUY): New business venture to foster future growth