Production cuts at glass firm batter bottom line
By DUSTY CLAYTON
TECHNICAL problems have forced Luoyang Glass to suspend a production line, which could reduce this year's earnings by 4.5 million yuan (about HK$4.1 million), the company said.
The announcement did not dampen enthusiasm for the H-share company.
Its shares yesterday led companies listed in the Hang Seng China Enterprise Index (HSCEI), jumping by as much as 3.16 per cent to HK$2.45 on healthy trading of 1.62 million shares before settling at $2.375.
The driving force behind the general rally in Chinese companies listed in Hong Kong was renewed hope the government would loosen control on credit.
Last week Dai Xianglong, governor of the People's Bank of China, said the lending quota would be 650 billion yuan this year, compared with 638 billion last year, and could be increased.
The HSCEI closed at 914.24 points yesterday, up 1.78 points.
Luoyang Glass said the production line was suspended on January 17 due to problems such as impurities and spots in the glass produced, and leakage of glass fluid.
The shutdown of the second line overlaps with regular maintenance of the first line, and further reduces production of sheet glass by 15,000 tonnes in 1996. The company expects the maintenance to last 45 days and cost about 18 million yuan, which will come from reserve funds.