Zhongwang profit up 29pc as first-half sales to US double
Liaoning-based aluminium extruder China Zhongwang Holdings, which has been mired in controversy since its listing in May 2009, said first-half sales to the United States doubled from a year earlier as it continued to fight accusations of dumping.
Zhongwang, which says it is the second-largest manufacturer of extruded aluminium products in the world by sales volume, said net interim profit rose 28.8 per cent to 2.09 billion yuan (HK$2.39 billion) year on year and revenue edged up 2.3 per cent to 6.47 billion yuan. It will not pay an interim dividend.
The share of overseas sales continued to rapidly increase, representing 59.1 per cent of total group sales, up from 44 per cent at the end of 2009. In particular, exports to the US doubled to 2.67 billion yuan from 1.38 billion yuan the year before.
Chinese aluminium firms are coming under increasing scrutiny after a report from the US International Trade Commission (ITC) in June accused Chinese firms, including Zhongwang, of dumping.
In that report, the commission said US companies bought US$514 million worth of extruded aluminium from China in 2009. Separately, however, Zhongwang said it had sold 5.6 billion yuan, or about US$820 million, worth of extruded aluminium to the US over the same period.
The company told the South China Morning Post previously that the ITC report only included certain classes of aluminium products but did not specify which of its exports were included in the probe.
In a filing to the Hong Kong stock exchange, Zhongwang said it would increase sales of products that were not covered in the anti-dumping report in its exports to the US to offset any impact of the probe, while growing market share outside the US and within China.
Zhongwang's stated sales to the US for the first half of the year, amounting to US$394 million, are equivalent to more than three-quarters of total US imports of extruded aluminium from China in 2009.
Meanwhile, exports to Australia in the same period jumped more than 30,000 per cent from 3.7 million yuan last year to 1.14 billion yuan.
The company said its strategy of focusing on industrial extruded products helped lift its overall gross profit margin to 47.5 per cent from 39.7 per cent a year earlier.
Zhongwang shares finished 1 per cent higher yesterday at HK$5.08.