Chu Kong on quest for acquisitions
Chu Kong Petroleum and Natural Gas Steel Pipe is seeking to acquire steel pipe makers serving the infrastructure and water industry.
The Panyu, Guangdong-based firm, which makes pipes mainly for the oil and gas sector, has been trying to extend its product range in recent years and has begun to offer products used in power grid towers and copper ore transport pipes.
'We are looking at targets that provide steel pipes to infrastructure construction and water transportation companies,' chairman Chen Chang said.
The company on Thursday posted a 228.5 per cent year-on-year jump in net profit to 230.73 million yuan (HK$283 million) for last year. Sales doubled to 3.38 billion yuan on the back of a 125 per cent rise in sales volume to 415,680 tonnes.
But average gross profit margin slipped 9.2 per cent to 1,205 yuan per tonne as it made more lower-margin products for the domestic market.
Overseas sales accounted for 51.8 per cent of the total, up from 39.5 per cent in 2010, thanks to gas-pipe orders from Colombia and Peru.
Chen said this year new orders were likely to come from PetroChina's third west-to-east gas pipeline from Xinjiang to Fujian.
China Petroleum and Chemical (Sinopec) is also expected to begin tendering for its Xinjiang-Guangdong gas pipeline towards the end of the year.
The Colombian government may also ask for bids for 300,000 tonnes of steel pipes for gas pipelines in the next few years. Chu Kong delivered 150,000 tonnes to the South American nation last year.
Monopoly power distributor State Grid Corporation of China was also due to start procuring pipes in the third quarter for another round of ultra-high-voltage power grid construction, which was expected to involve 400,000 tonnes of steel pipes, Chen said. Chu Kong will deliver 67,000 tonnes to State Grid in orders obtained last year.