(Yicai Global) Oct. 24 -- Han's Laser Technology Industry Group posted a 64 percent drop in profit for the first three quarters from a year earlier, in line with its own expectations as the China-United States trade tiff weighs on sales. Its shares rose.

Net profit was CNY600 million (USD85 million) from January through September as revenue fell 20 percent to CNY6.9 billion (USD977 million), the laser maker said in an earnings report yesterday. It had pegged nine-month profit at between CNY580 million and CNY746 million in its first-half report mid-year. For the third quarter, profit and revenue fell 65 percent and 38 percent.

Still, investors appeared relieved with the results as the Shenzhen-based firm's stock price [SHE:002008] rose 2 percent to close at CNY38.60 (USD5.46). The shares have advanced 27 percent so far this year, trailing a 32 percent gain in the benchmark Shenzhen Component Index.

Han's Laser said in its first-half report that the lower estimation was due to a cyclical decline in the consumer electronics industry, adding that several clients were cautious about spending due to the China-US trade friction and that it was receiving fewer orders than last year. Some contracted clients also postponed collection dates, it added.

Annual Forecast

The firm expects full-year profit to fall between 45 percent and 55 percent from last year to between CNY773 million and CNY945 million, it said in the latest report.

Under-construction projects increased by CNY225 million in the third quarter, taking its total to CNY1.9 billion and making up 21 percent of its net assets. The figure rose CNY640 million over the first three quarters, more than its net profit over the same period, which it attributed to building new research facilities in Europe.

One of those European facilities began eight years ago and market participants have been questioning its authenticity. The firm initially said it would invest CNY50 million in the project but jacked that up to CNY1.1 billion and continually put back the completion date.

When the Shenzhen Stock Exchange queried the matter, the company published an audit from PricewaterhouseCoopers that said cash flowing into the project was being used as it should be.

Editor: James Boynton