CSR and CNR see rapid overseas growth

CSR Corp Ltd and China CNR Corp Ltd, the country's two leading locomotive and rolling stock manufacturers, enjoyed fast growing overseas business in the first half of this year.

The overseas market has increasingly become an important part of CSR and CNR's total operating income, accounting for 11.33 percent and 10.46 percent respectively, according to the two companies' midyear reports. This is the first time the two companies have seen overseas operating income be more than 10 percent of their respective totals.

In the first half of 2012, the net profit for CSR totaled 1.92 billion yuan, representing a 6 percent decrease year-over-year. The net profit for CNR was 1.66 billion yuan, increasing by 3.32 percent. Operating income from the overseas market rose sharply at a rate of 95.58 percent for CSR and 107.92 percent for CNR.

The slowdown of China's economic growth and the uncertainties facing the railway market have had a negative effect on the two companies' operation, according to Caijing.com.cn. And they are facing the pressure of increasing costs. The selling expenses, administrative expenses and financial expenses altogether increased by 18.5 percent for CSR and 16.8 percent for CNR.

Accounts receivable rose greatly for the two companies in the first half of this year, increasing the cash-flow deficit, according to Caijing.com.cn. CNR's account receivable reached 26.6 billion yuan, a 67 percent increase compared to the beginning of this year. Account receivables of CSR rose by 157 percent.

In the first half of this year, the gross profit rate for CSR is 18.87 percent, higher than the rate for CNR, which was only 13.65 percent. CSR's return on equity is 6.58 percent, about 1.2 percentage points higher than that of CNR.