Sales up for Ninestar’s Lexmark; Ninestar to Shift Lexmark Manufacturing to Zhuhai, China

China’s Ninestar Corporation, previously known as Apex Technology, and which last year, along with other investors, purchased Lexmark International for $3.9 billion, recently reported financial results for the first half of 2017 that included sales increases for Lexmark, as well as for printer consumables, and memory chips.

Ninestar posted operating income of RMB 1,112 billion ($167,820 million U.S.) for the half-year, an increase of 678.14 percent versus the first half of 2016. Ninestar said the increase was due to an increase in sales income for its overseas subsidiaries and businesses acquired in 2016.

Net profit however for the first half of 2017 was RMB -1,015 billion (-$153,143 million U.S.), a decrease of 536.57 percent versus the first half of 2016, with Ninestar stating that the main reason for the decline was the merger of overseas subsidiaries acquired in 2016.

Ninestar stated that, in the first half, it focused on its integrated circuit (chip) and printer-consumables business to expand the market, as well as on research and development.

The company is also continuing to integrate Lexmark’s Imaging Solutions and Services (ISS) business, which included selling Lexmark’s software business, which in turn realized a recovery large amounts of cash, reducing Ninestar Corporation’s asset-liability ratio.

Ninestar’s integrated circuit chip business managed to achieve “substantial growth” in the first half of 2017, and showed an increase of operating income of about 30 percent, with net profit increasing by about 40 percent.

The printer-supplies business showed an operating income increase of about 15 percent, and net profit increase of about 14 percent, both versus the first half of 2016.

The firm said that through improved customer management and service quality, sales significantly increased for its toner cartridges, with toner cartridges accounting for 7.7 percent of total sales in the first half of 2017. The domestic market grew 37 percent for imaging drums used in laser printers and copier/MFPs.

Lexmark Integration

After completing its acquisition of Lexmark, Ninestar says it began a strategic integration. In the first half of 2017, Lexmark unit sales increased by 19.7 percent (versus 7.7 million unit sales for the first half of 2016. However, Lexmark printer and MFP consumables’ sales declined slightly.

Ninestar stated that, at the end of 2017, Lexmark will be introducing new products, and that Ninestar will be also be seeking to use Lexmark’s expertise in print-management services, as well as its vertical solutions for the medical, financial, insurance, manufacturing, and other sectors to introduce custom solutions. Ninestar will also be seeking to introduce these solutions in China, with  Ninestar looking to grow printer-business management sales and specifically increase the Chinese market share.

Ninestar says it will also gradually move the manufacturing of Lexmark products to Zhuhai in China. The first Lexmark supplies have been produced in Zhuhai, which was the first phase of the migration and has been successfully completed. Ninestar will gradually increase production capacity, and expand production, looking to produce 8 to 10 million units within the next two years at the site.

In May 2017, Ninestar also acquired three companies: Zhuhai Xinwei Technology Company, Zhuhai Zhongrun Jingjie Printing Technology Company, and Zhuhai City Extension Good Technology Company.

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