China Hongqiao posts lower than expected revenue for first six months
Shares prices hit 12-month high in Hong Kong ahead of interim results
Share prices of China Hongqiao, the world’s largest aluminium producer by capacity, surged to a 12-month high ahead of its interim report on Friday, although the company reported worse-than-expected revenues for the first six months of the year.
Shandong-based China Hongqiao reported revenue of 25.375 billion yuan (HK$29.6 billion) in its interim report for the six months ended June 30, an approximate 13 per cent growth in revenue, missing analyst estimates. Analysts polled by Reuters estimated that the company would post a 13.5 per cent growth in revenue to 25.487 billion yuan.
Net profit grew 20.7 per cent to 3.28 billion yuan, approximately 13 percentage points less than the same period last year when the company reported a 33.4 per cent increase.
China Hongqiao’s share price has risen 36 per cent since the beginning of the year, closing at a high of HK$6.28 in Hong Kong on Friday before the results were announced.
The company expects demand for aluminium products to grow in the second half of this year. In March, China Hongqiao said that it planned to raise its annual capacity for lightweight industrial metals by 15 per cent if market recovery continued, and would spend 15 billion yuan for the same.
The company acquired alumina refiner Beihai Xinhe for 2.12 billion yuan in June, and said the move would help cut costs required for building a new facility.
The company, however, decided not to announce any interim dividend for the first half.