Sino-Global ‘unlikely’ to see effects of China’s downturn, says CEO
As the economic slowdown in China worries the rest of the world, the CEO of NASDAQ-listed Sino-Global Shipping America has stated that the situation is “unlikely to have a material impact” on the US-based company.
The China-backed company owns one small oil/chemical tanker, which has been employed on timecharter since May 22. The company says the contract has so far generated net profit of around $300,000 and revenues of approximately $570,000.
“Because our time charter arrangement is entirely US dollar-denominated, and because the vessel operates in a highly specialized trade, a slowdown in the Chinese economy and changes in the value of the yuan have, to date, not adversely affected this business,” said Lei Cao, Sino-Global’s CEO, in a statement.
“As for our shipping agency business, we are paid in US, Australian and Canadian dollars, so our foreign exchange risk is not tied solely to the yuan.
“While we do receive yuan for our inland transportation management services, we believe the devaluation is unlikely to have a material impact on our business because we use the yuan in connection with our Chinese operations.
“A significant slowdown in the Chinese economy might lower our business volume, but that is more a competition effect than a currency effect; and we believe we are among the best competitors in China in this business segment.”
Cao said the company hoped to be able to provide shipping services to other shipowners, such as Weixiong Yang, who purchase 500,000 shares in Sino-Global in July.
