(Bloomberg) -- Siemens AG rose after reporting record earnings and predicting a recovery for China’s economy for the second half of next year.  

The German industrial company sees comparable revenue up as much as 8% in the year through September 2024, it said Thursday. The forecast follows a break-out year for Siemens in which revenue jumped 11% and net income nearly doubled.

The shares gained as much as 6.3% in Frankfurt trading, the most since Feb. 9. The stock has risen about 13% since the start of the year. The company also announced an upgrade of its share buyback to as much as an additional €6 billion ($6.5 billion).

“We think the sales growth expectations are better than feared by investors and should be taken positively,” Citi analysts led by Martin Wilkie said in a note. 

Siemens and the rest of the industrial sector is grappling with weaker demand in China, where consumer and business spending has fallen back amid inflation and higher interest rates. Chief Executive Officer Roland Busch, however, sees good prospects for the company’s software and automation products as the Chinese government pushes for more high-tech manufacturing. 

“China’s private consumption isn’t picking up and as a major exporter they also have a drawback with the weak global economy,” Busch said in an interview with Bloomberg Television. “We are looking closely into the start of the next calendar year, where we see more momentum in the second half.”

Read more: Siemens Sees Subdued Growth in China Lasting Into Next Year

Adding to economic headwinds, Siemens has come under pressure to pump more resources into its troubled former subsidiary Siemens Energy AG, where ongoing problems with its wind-turbines prompted a government-led intervention this week. Siemens, still the largest shareholder in the gas turbines maker, plans to “accelerate” loosening ties in the company, Busch said Thursday. 

As part of a deal to shore up Siemens Energy, Siemens has agreed to buy an 18% stake in an Indian joint venture for €2.1 billion from its former unit. 

The transaction is part of a broader €15 billion deal to help cover loan guarantees allowing Siemens Energy to compete for new business, involving Germany’s government and banks.  

“The whole package allows Siemens Energy to carry on for the next two years,” Busch said to Bloomberg. “Now, it’s obviously about fixing the problems in wind.”

IPO Plan

In the past years, Siemens has shed much of its heavy-duty equipment businesses and sold smaller divisions in favor of software-driven product lines with higher profitability levels. On Thursday, it outlined plans for an initial public offering of its large-drives Innomotics business, while still pursuing a possible divestment. The unit has been valued at roughly €3 billion.

While divesting units, Busch on Thursday flagged Siemens could target larger acquisitions with a focus on software while the company faced few financial restrictions. 

For the fiscal fourth quarter through the end of September, the company reported net income attributable to shareholders of €1.72 billion, in line with analyst estimates. Orders climbed 6% compared to last year, and Siemens raised its dividend by just over 10% to €4.70 a share.  

“The combination of a large buyback and stronger dividends should provide sentiment tailwind,” Jefferies analyst Simon Toennessen said in a note. 

--With assistance from Oliver Crook.

(Updates with expanded buyback plan in second, CEO comment in seventh paragraph)

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