Ninestar: Sales of Pantum’s A3 printer models surged by 34.07%
November 4, 2024
Despite robust revenue growth and profit, Ninestar grapples with exchange rate losses.
In its third-quarter report for 2024, Ninestar reported a strong performance across several of its business segments, primarily its printer and consumables divisions, contributing to an 8.07% increase in total revenue year-on-year, reaching 19.39 billion CNY ($2.71 billion/ €2.54 billion). The period’s standout achievement was a significant surge in net profit, climbing by 408.87% to reach 1.08 billion CNY ($150.8 million/ €141.6 million), driven largely by growth in its Pantum and Lexmark printer brands.
The printer segment showed marked progress, with Pantum and Lexmark leading the charge. Pantum, Ninestar’s home grown brand, recorded a 9.79% increase in revenue, contributing 3.176 billion CNY ($442.3 million/ €415.9 million) to the quarterly totals. While overall unit sales showed moderate growth at 1.7%, sales of Pantum’s A3 printer models surged by 34.07% year-on-year, suggesting a shift towards more advanced devices within its product mix. This aligns with the Chinese government’s push for innovative technologies, which Ninestar notes has positively impacted sales volumes in the innovation-centric segments. Additionally, original consumable shipments increased by 13.18%, a positive indicator of Pantum’s expanding market footprint.
Lexmark, the company’s international brand, posted similarly strong results. The brand’s revenue rose to $1.655 billion (€1.55 billion), representing a 7.83% increase, and printer sales volumes soared by 29.49%. According to the report, Lexmark’s EBITDA also rose by an impressive 47.97% over the same period last year.
Ninestar’s universal consumables business recorded a 13.8% increase in revenue, adding 4.851 billion CNY ($677.7 million/ €635.5 million) to its bottom line. Despite higher sales volumes, profitability in this segment fell by 37.82%, pointing to potential pricing pressures or higher production costs.
Ninestar faced challenges with cash flow and foreign exchange volatility. The company reported a 13.01% decrease in cash flow from operating activities, falling to 1.26 billion CNY ($175.7 million/ €164.7 million). This decline is attributed to rising input costs and higher levels of working capital required to support expanding operations.
Exchange rate volatility also presented difficulties. The CNY/USD fluctuation has had a marked impact on financial costs, which saw a 44.91% year-on-year increase, amounting to 725.65 million CNY ($101.3 million/ €95 million). The company attributed this to losses incurred due to an unfavourable exchange rate environment, underscoring the risks associated with its significant international exposure.
Our take on this: In a market that is maturing, the demand for Lexmark and Pantum printers and consumables continues to grow globally. More of a surprise is that Lexmark’s continued growth and strong positioning, seems to be weathering the China / USA geopolitics.
Tags: Ninestar, Printers, Profits, Growth, Revenue
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