Ocean Grand eyes acquisition of rival
Aluminium extrusion producer Ocean Grand Holdings is in talks to acquire a state-owned firm which could more than double its production capacity.
Chairman Michael Yip Kim-po yesterday said the company was in negotiations to buy out a rival in the Yangtze River delta.
If it goes ahead, Ocean Grand's production capacity would rise to 170,000 tonnes a year from 70,000 tonnes now.
However, Mr Yip said state-owned firms tended to have lower gross profit margins and non-core assets, such as hotels and cinemas, would be siphoned off in a restructuring before or after acquisition.
The firm, with a $509 million cash pile, hopes to buy rivals with higher value-added products.
China's annual aluminium extrusion product consumption was expected to grow from eight million tonnes now to 10 million tonnes in 2005, Mr Yip said.
He made the comments yesterday as Ocean Grand announced an 8.09 per cent fall in interim net profit to $79.52 million from $86.52 million in the same period last year.
A $27 million disposal loss and provision on shares in network software developer Linefan Technology Holdings also hit earnings.
A $9.8 million gain from the spin-off of electroplating chemical-making subsidiary Ocean Grand Chemicals Holdings on the main board partly mitigated the loss. The lower profit was also due to the absence of a $14 million gain from a share sale in Ocean Grand Chemicals in the previous first half.
Ocean Grand shares closed 1.28 per cent firmer at $1.58 yesterday.
